Saturday, October 31, 2020

Utility firm ComEd agrees $200M fine in bribery case, implicates Illinois lawmaker Michael Madigan


Electric utility ComEd has agreed to pay $200 million to resolve a federal criminal investigation into a long-running bribery scheme that implicates Illinois House Speaker Michael Madigan, long considered the state’s most powerful lawmaker.

Federal prosecutors said Friday the company has admitted that from 2011 to 2019 it arranged jobs, subcontracted work and monetary payments related to those jobs “for various associates of a high-level elected official for the state of Illinois.”

The U.S. attorney’s office identified the high-level elected official as “Public Official A” in a news release. A deferred prosecution agreement for ComEd filed in federal court states that “Public Official A” is the Illinois House speaker, but Madigan — a Chicago Democrat who is the longest-serving state House speaker in modern American history — is not mentioned by name.

Madigan’s spokesman, Steve Brown, couldn’t be reached for comment Friday and didn’t immediately respond to a voice message.

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The U.S. attorney’s office scheduled a Friday afternoon news conference “to announce developments in a public corruption investigation.”

“Public Official A controlled what measures were called for a vote in the Illinois House of Representatives and exerted substantial influence over fellow lawmakers concerning legislation affecting ComEd,” the news release states.

Prosecutors say that during the time of the scheme, the Illinois General Assembly considered legislation that affected the company’s profitability, including regulatory processes used to determine rates the state’s largest electric utility charged customers.

The alleged bribery scheme was orchestrated “to influence and reward the official’s efforts to assist ComEd with respect to legislation concerning ComEd and its business,” prosecutors said. That included arranging jobs and vendor contracts for Madigan allies and workers, including for people who performed little or no work, appointing people to the company’s board at Madigan’s request and giving internships to students from his Chicago ward.

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The Chicago Tribune had reported in December that Madigan has been the subject of inquiries in the federal corruption investigation involving ComEd, which is the largest electric utility in Illinois and a unit of Exelon Corp. EXC, +3.50%, that has already entangled several top Illinois Democrats. In October, WBEZ reported that Anne Pramaggiore, CEO of Exelon, had abruptly left her job as the company’s ties to an ongoing corruption investigation seemed to be deepening.

More than half a dozen Illinois Democrats — including some of them former Madigan confidants and allies — have been charged with crimes or had agents raid their offices and homes.

The U.S. attorney’s office said it filed a one-count criminal information on Friday in U.S. District Court in Chicago charging ComEd with bribery. Madigan, who is also chairman of the Democratic Party of Illinois, is not criminally charged.

Madigan, 78, who came up under the political machine of the late Mayor Richard J. Daley and considered him a mentor, was elected to the House of Representatives in 1970. He took over as speaker in 1983 and has held the gavel for all but two years since.

The only two-year session when Madigan was relegated to minority leader was 1995-97, during a decade in which Republicans had won the right to draw the legislative district map to their liking.

His influence, canny strategizing and patience was on full display during the 2015-17 state budget standoff with former Republican Bruce Rauner. Madigan outwaited and outwitted Rauner for two years without an annual budget. In the end, Madigan convinced even some Republicans to cross over and vote for a tax increase and annual budget in July 2017, leaving Rauner with nothing.

The next month, the unflappable Madigan bested the 32½-year record held by a midcentury South Carolina Democrat to become the nation’s longest-serving state House speaker in U.S. history.

The investigation announced Friday is the latest public corruption probe in a state where four of the last 11 governors have been sent to prison and several state lawmakers and Chicago City Council members have faced charges, been convicted, or cooperated with law enforcement investigations.

“Even for a state with a history of corruption, this is unprecedented,” Illinois Republican Party Chairman Tim Schneider said.

A deferred prosecution agreement that’s subject to approval by the U.S. District Court requires ComEd to pay a $200 million fine. A court date for the approval hearing has not yet been scheduled.

Under that agreement, the government will defer prosecution on the charge for three years and then seek to dismiss it if the utility “abides by certain conditions, including continuing to cooperate with ongoing investigations of individuals or other entities related to the conduct described in the bribery charge,” according to the release.

The U.S. attorney’s office said that ComEd “has provided substantial cooperation with the federal investigations” and under the terms of its agreement, “the company will continue to provide such cooperation until all investigations and prosecutions arising out of the charged conduct are concluded.”

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In a statement, Exelon CEO Christopher Crane said the company “acted swiftly to investigate” when it learned of inappropriate conduct.

“We concluded from the investigation that a small number of senior ComEd employees and outside contractors orchestrated this misconduct, and they no longer work for the company,” he said. “Since then, we have taken robust action to aggressively identify and address deficiencies, including enhancing our compliance governance and our lobbying policies to prevent this type of conduct. We apologize for the past conduct that didn’t live up to our own values, and we will ensure this cannot happen again.”


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