ComEd got a deferred prosecution deal with federal authorities, avoiding criminal prosecution in the sprawling corruption probe.
Commonwealth Edison on Friday stated that it has steered jobs, contracts and payments to people connected to Public Official A, who's later referred to as the Illinois House speaker in a highly explosive court filing released Friday morning.
Michael J. Madigan has been the speaker of the House for all but two years since 1983. He has not been charged with wrongdoing.
The U.S. attorney's office in Chicago had been investigating whether ComEd hired politically connected contractors — some with ties to Madigan — in order to win favorable government actions, including electricity rate increases. Friday's agreement came less than a year after WBEZ first disclosed the nature of the probe and Madigan's connection to it.
Madigan's repeated mentions in Friday's federal filing brought a call from his legislative ally, Democratic Gov. JB Pritzker, to leave office if the charges are proven.
"This is very upsetting, Pritzker said at a noon press conference in Waukegan. "When I think about the possibility of people committing these kinds of wrongdoings, I think people who are in public service need to live up to the integrity of the job they're asked to do. If it turns out these things are true, he's going to have to resign."
In all, ComEd estimated that the benefits the company got over an 8-year-period it paid for associates to "influence and reward" Madigan, it also sought support from the speaker for legislation that gave favorable rate structures resulting in more than $150 million for the company, according to the agreement.
"The Speaker has never helped someone find a job with the expectation that the person would not be asked to perform work by their employer, nor did he ever expect to provide anything to a prospective employer if it should choose to hire a person he recommended," a Madigan spokeswoman wrote. "He has never made a legislative decision with improper motives and has engaged in no wrongdoing here. Any claim to the contrary is unfounded.
"This morning the Speaker accepted subpoenas related to his various offices for documents, asking for, among other things, documents related to possible job recommendations. He will cooperate and respond to those requests for documents, which he believes will clearly demonstrate that he has done nothing criminal or improper."
According to the agreement — known as a deferred prosecution — ComEd is charged with one count of bribery.
"ComEd arranged for various associates of Public Official A, including Public Official A's political allies and individuals who performed work for Public Official A, to obtain jobs, vendor subcontracts, and monetary payments associated with those jobs and subcontracts at ComEd, even in instances where certain political allies and workers performed little or no work that they were purportedly hired to perform at ComEd," the statement reads.
However, despite the multiple connections to Madigan detailed throughout the court filing and various quotes attributed to Madigan associates, the speaker is not quoted anywhere in the document and the allegations detailed in the document all involve associates of Madigan — not Madigan himself.
As long as ComEd pays a $200 million fine and complies with regulations for three years, that bribery charge will be dropped.
By agreeing to the deferred prosecution, ComEd avoids the specter of a politically explosive criminal trial into its lobbying activities by settling with federal prosecutors probing the clout-laden power company's Springfield muscle.
In exchange for agreeing to the deal, the company will not face criminal prosecution, as long as it meets the terms of the agreement. But it does not prevent prosecutors from pursuing charges against several ex-ComEd executives and contractors who parted ways with the company after getting caught up in the probe.
"There were very few individuals involved in orchestrating that behavior," Exelon CEO Chris Crane told WBEZ on Friday. "And the controls we put in place now will ensure it never happens again at ComEd."
As part of the agreement, ComEd must enhance its compliance program and submit annual reports to the government regarding its compliance with the deferred prosecution.
Speaking at midday Friday after the agreement came down, U.S. Attorney John Lausch told reporters that corruption in Illinois "continues to be a stubborn problem." Lausch wouldn't comment on Madigan's identity, even though his offices' filing makes it clear, saying that the public official in question hasn't been charged. Lausch said the investigation is ongoing.
On Friday after the agreement came down, U.S. Attorney John Lausch told reporters that corruption in Illinois "continues to be a stubborn problem."
An "old-fashioned patronage system"
A written statement in the court filing details multiple instances between 2011 and 2019 in which ComEd acted to benefit Madigan. That included payments from ComEd funneled through an unnamed "Consultant 1," who then made payments to associates of Madigan who were subcontractors.
But because those vendors were not paid directly by ComEd, the utility didn't have to disclose any information about the payments, according to the court filing.
Senior ComEd executives were aware these payments were to "influence and reward Public Official A" and to advance ComEd's business interests, the statement reads.
Consultant 1, according to the document, told a ComEd senior executive of the arrangement and "that ComEd should not tamper with the arrangement because 'your money comes from Springfield.'"
"Do they do anything for me on a day to day basis? No," the consultant is reported to have said. But the payments were "to keep [Public Official A] happy, I think it's worth it, because you'd hear otherwise."
The document does not name Consultant 1. WBEZ has previously reported that Jay Doherty, president of the City Club of Chicago public affairs group, was being investigated for being a "pass through" for the utility's deals with politically connected individuals.
Doherty earned more than $3 million over the last decade as a ComEd lobbyist. He eventually resigned as City Club president and ComEd cut ties with him. He's hung up on WBEZ multiple times when contacted about the investigation.
The document says that conversation took place with an unnamed "Senior Executive 1" at ComEd, who served as the utility's senior vice president for legislative and external affairs before leaving the company in September 2019. That would appear to be a reference to Fidel Marquez, Jr., who held that title as ComEd's top in-house lobbyist and left the company at that same time.
Another key figure in the scandal is identified in the court document as "Individual A," a former state lawmaker who served in the state House for a decade starting in 1972 and later went on to lobby for ComEd and had had a "close personal relationship" with Madigan. Retired lobbyist Michael McClain, who has been a central figure in the federal criminal probe, fits all of those details.
Individual A allegedly told a senior ComEd executive, "I would say to you don't put anything in writing" because "all it can do is hurt ya," when discussing the pass-through payments, according to the agreement. The document does not make clear how authorities heard these quotes, though the Chicago Tribune has reported that the feds tapped McClain's phone.
Individual A also is alleged to have told another ComEd lobbyist, "We hire these guys because [Madigan] came to us. It's just that simple."
In another instance, Individual A explained to ComEd personnel in a meeting on March 5, 2019, that Madigan had named individuals to be ComEd employees, including meter readers, as part of an "old-fashioned patronage system." A ComEd employee responded that such hires would be a "chip" used by ComEd to benefit itself, according to the court filing.
McClain, whose downstate Quincy home was raided by the feds in May 2019, told WBEZ in January that federal prosecutors had asked him to cooperate with their investigation, but intimated that he would not. When WBEZ asked if it would be hard to betray someone like his longtime friend Madigan, McClain paused and then said, "It would be hard to betray myself."
In all, according to the document, Madigan's associates benefited to the tune of $1,324,500 between 2011 and 2019 – despite doing little to no work.
Feds: Madigan sought to name a ComEd board member
In another instance, the document alleges that Madigan sought to name a board member to ComEd's Board of Directors. The document says that wish was communicated to an unnamed CEO-1 by Individual A.
Anne Pramaggiore was the CEO of ComEd during this time period. She asked Individual A— who appears to be McClain — whether instead of a board appointment, she could hire Madigan's pick for a part-time job at the same pay. But Individual A asked her to "keep pressing" for the board seat, the document alleges.
In response, the court document indicates Pramaggiore agreed, saying "You take good care of me and so does our friend [Public Official A] and I will do the best that I can to, to take care of you."
That candidate was eventually appointed to the board, "with the intent to influence and reward" Madigan.
Juan Ochoa fits the description of that board member, according to regulatory documents. Ochoa is the former CEO of the organization that manages the McCormick Place convention center. In an interview with WBEZ Friday, an Exelon official said Ochoa is no longer a board member.
In a statement, a spokesman for Pramaggiore disputes what is described in the court document and writes that she has had a "distinguished" career.
"Ms. Pramaggiore has done nothing wrong and any inference to the contrary is misguided and false," her spokesman said. "During her tenure, she and other current and former ComEd and Exelon executives received, evaluated and granted many requests to provide appropriate and valuable services to the companies, none of which constitute unlawful activity."
ComEd also hired students from Madigan's ward as part of an internship program "with the intent to influence and reward Public Official A in connection with Public Official A's official duties," according to the document.
ComEd bribery charge follows sprawling federal probe
The highest-profile departure came last October when the then-Exelon Utilities CEO, Pramaggiore, abruptly left the company as the corruption investigation appeared to be deepening. ComEd cut ties with Marquez, one of its top in-house lobbyists, the previous month. Neither have been charged with a crime.
The sprawling criminal investigation into the utility giant's lobbying activities has reached into multiple corners of Illinois' civic and political circles.
Federal agents have repeatedly sought information on Madigan, the state's most powerful politician and the head of Illinois' Democratic Party. WBEZ has previously reported on how several ex-Madigan aides and political allies have ended up lobbying for ComEd. Madigan has not been charged with wrongdoing, and told reporters last year, "I'm not a target of anything" in relation to the investigation.
Exelon also disclosed receiving a second subpoena from federal agents seeking communications with then-State Sen. Martin Sandoval. The Southwest Side Democrat later pleaded guilty to federal bribery and tax evasion charges.
In the raid last year at Sandoval's office in Springfield, court records show that agents sought documents on four unidentified Exelon officials and on issues supported by ComEd and Exelon at the state Capitol, "including but not limited to rate increases."
ComEd is regulated by state government officials, and has traditionally employed an army of lobbyists to advance its interests in the Capitol.
Last month, WBEZ reported that ComEd paid the powerhouse law firm of Jenner & Block nearly $2.4 million in 2019 — more than what the power company had reported paying the firm in the previous four years combined. Two sources with knowledge of the federal probe told WBEZ that Jenner & Block is helping the company deal with federal authorities who are conducting the investigation.
In addition, two former consultants for ComEd said they had been contacted by the company to see whether they would sit for interviews with Jenner & Block attorneys as part of the utility's own internal investigation. According to one of the former ComEd consultants, who was interviewed, the lawyers for the company made clear they were sharing their findings with the feds.
With a deferred prosecution, prosecutors generally agree not to pursue charges filed against an individual or company in exchange for some kind of remediation, whether that be fines, repayment of funds, drug or alcohol rehabilitation or community service. It's used most often with first-time low-level offenders, but has been used by authorities across the country.
Federal prosecutors in Chicago last March worked out a deferred prosecution deal with former U.S. Rep. Aaron Schock, who was charged with using his campaign and government funds as a personal piggy bank. Schock had to pay back taxes and stay out of trouble for six months, after which prosecutors dropped all charges.
Around the country, federal prosecutors have used deferred prosecutions for Chipotle, which paid a $25 million fine and got a three-year-deferred prosecution deal after its tainted food sickened more than 1,000 people. Wells Fargo entered into a $3 billion deferred prosecution agreement after it was accused of opening fake accounts with customers' information, among other charges.
Tony Arnold and Dave McKinney cover Illinois politics. Follow them @tonyjarnold and @davemckinney.