Feds' ComEd Bribery Case Implicates Mike Madigan; Speaker's Office Subpoenaed; Governor Says Madigan 'Must Resign' If Allegations Are True
CHICAGO (CBS) -- Following months of speculation about a wide-ranging investigation, federal prosecutors have charged ComEd with a years-long bribery scheme involving the company's arrangement for jobs, contracts, and payments to allies and associates of Illinois House Speaker Michael Madigan.
ComEd will pay a $200 million fine as part of a deferred prosecution agreement to end the federal probe, admitting it sought to influence "Public Official A" -- identified as the Speaker of the Illinois House of Representatives without using Madigan's name -- by arranging for his allies and people who performed political work for him to obtain jobs, contracts and payments from ComEd between 2011 and 2019.
"ComEd understood that, as Speaker of the House of Representatives, Public Official A was able to exercise control over what measures were called for a vote in the House of Representatives and had substantial influence and control over fellow lawmakers concerning legislation, including legislation that affected ComEd," federal prosecutors wrote in court filings.
ComEd faces a single charge of bribery. Madigan, 78, has not been charged with a crime.
Madigan, who also chairs the Illinois Democratic Party, was nowhere to be found on Friday, either at his district office or his Southwest Side home, but a spokesperson confirmed the speaker accepted federal subpoenas for various documents. In a statement Friday afternoon, Madigan spokeswoman Maura Possley said the subpoenas sought "among other things, documents related to possible job recommendations."
Possley said Madigan will cooperate with the subpoenas, and believes the documents sought will prove "he has done nothing criminal or improper."
"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. He has never made a legislative decision with improper motives and has engaged in no wrongdoing here. Any claim to the contrary is unfounded," Possley wrote in an email.
Gov. JB Pritzker said, if the allegations involving Madigan are true, "there is no question that he will have betrayed the public trust and he must resign, therefore."
"I am deeply troubled, and frankly I'm furious with what is being reported," he said. "The speaker has a lot he needs to answer for; to authorities, to investigators, and most importantly to the people of Illinois. These allegations strike at the core of what public service means. It's a high calling, public service. It's a high calling, one in which we serve with a sacred trust to put the people first."
The governor urged Madigan to fully cooperate with the investigation. Madigan's office has not responded to requests for comment. Madigan is the longest serving house speaker in the nation, having served as Illinois House Speaker for all but two years since 1983.
FBI Chicago Special Agent In Charge Emmerson Buie said the charges demonstrate the extent of the potential reach of public corruption.
"If left unchecked, it doesn't just affect areas most people associate with corruption, but can infiltrate businesses and corporations, and trickle down to the customers those corporations serve," he said Friday afternoon.
The feds say ComEd admitted attempting to influence legislation regarding the regulatory process that determines the rates it is allowed to charge customers for electricity. ComEd acknowledged it stood to benefit by more than $150 million from that legislation.
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According to court documents, the speaker and a person named only as "Individual A" -- identified as a former lawmaker who is a close friend of the speaker and served as a lobbyist and consultant for ComEd until last year -- sought jobs, contracts, and payments from ComEd for various associates, such as precinct captains who operated in the speaker's district.
The feds say Individual A and another ComEd lobbyist developed a plan to arrange for money for two of the speaker's associates by having ComEd pay them as subcontractors to the owner of a ComEd consultant between 2011 and 2019, even though those associates did little or no work.
"Certain senior executives and agents of ComEd were aware of these payments from their inception until they were discontinued in or around 2019," federal prosecutors wrote. "Certain senior executives and agents of ComEd were also aware of the purpose of these payments to Public Official A's associates, namely, that they were intended to influence and reward Public Official A in connection with Public Official A's official duties and to advance ComEd's business interests."
The feds said the payments to Madigan's associates between 2011 and 2019 totaled approximately $1,324,500, and "were intended to influence and reward Public Official A in connection with the advancement and passage of legislation favorable to ComEd in the Illinois General Assembly."
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ComEd also arranged for another associate of Madigan's to be appointed to the company's board of directors, and agreed to retain a specific law firm, both at the speaker's request. As part of the scheme, ComEd also agreed to arrange for internships for students who lived in Madigan's ward.
Mayor Lori Lightfoot also expressed concerns on Friday about the allegations tying Madigan to the bribery scheme, though she stopped short of calling for his resignation.
"It's not for me, as the mayor of the city, to talk about whether or not the speaker of the General Assembly should or shouldn't take certain action. As far as I know, there's not been any charges against him; but that, really, that need not be the standard," she said.
The mayor said she's focused on making sure ComEd gives a full accounting of its conduct, and said the City Council Committee on Environmental Protection and Energy will be holding a public hearing on July 30 regarding the utility's franchise agreement with the city. She expects aldermen will grill ComEd officials about the bribery case at that hearing.
"It's important for us to understand what safeguards and controls they have in place," she said.
Chicago's 20-year franchise agreement with ComEd expires at the end of this year, and many progressive aldermen have called on the mayor to take over ComEd's infrastructure and run its own electric utililty.
Lightfoot has dismissed that idea in the past, saying it could cost the city up to $10 billion to buy out ComEd's infrastructure, and on Friday she didn't sound any more likely to cut ties with ComEd.
"That's an enormous and costly undertaking," she said. "I don't take lightly the prospect of trying to run an electric utility. That's not within our wheelhouse."
Lightfoot said the city has launched a feasibility study to determine the costs of such a move to determine if it's realistic, and is waiting for those results.
U.S. Attorney John Lausch suggested the investigation involving ComEd and Madigan is far from over.
"Our federal investigations of corruption in Illinois are ongoing. We have a lot of work ahead of us, and we will get that work done," he said.
Under terms of the deferred prosecution agreement, federal prosecutors will drop the bribery charge against ComEd after three years if it cooperates with the investigation, and complies with other obligations.
ComEd may not seek any tax deduction in connection to its payment of the $200 million fine, and it may not seek to recover the cost of the fine through surcharges, fees, or any other charges to its customers.
The utility is planning to adjust its rates in January, and for the third year in a row, and fifth time in 10 years, rates are going down. The average bill that was $85 a month in 2008 to will dip to $82 in January.
Lausch described ComEd's cooperation with the federal investigation so far as "substantial."
Had the case gone to trial, ComEd could have faced fine of $240 million to $480 million, according to Lausch. However, the feds agreed to a lower fine because of ComEd's cooperation, and their agreement to take remedies at the corporate level.
According to the agreement, ComEd already has made changes to its compliance program "to address any deficiencies in its internal controls, compliance code, policies, and procedures regarding compliance with U.S. law."
"There were changes it needed to make, and they've made those changes, and now we'll see over the next few years whether they can effectively implement them and use them as part of their ongoing business," Lausch said.
ComEd must make annual progress reports on its new compliance procedures as part of its deal with the feds.
Lausch said, if ComEd breaches the terms of the agreement in any way, prosecutors may proceed with the bribery case, and bring other possible charges against the company.
In a statement, ComEd said it has fully cooperated with federal prosecutors since the beginning of the investigation, and has "taken extensive remedial measures" to reform its lobbying practices.
"We are committed to maintaining the highest standards of integrity and ethical behavior. In the past, some of ComEd's lobbying practices and interactions with public officials did not live up to that commitment. When we learned about the inappropriate conduct, we acted swiftly to investigate," Exelon CEO Christopher M. Crane said in a statement. "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. 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."
The bribery charge comes 10 months after ComEd and its parent company, Exelon, were hit with a federal subpoena for "records of communications" with former state Sen. Martin Sandoval. Earlier this year, Sandoval pleaded guilty to corruption charges accusing him of acting as a "protector" for red light camera company SafeSpeed in exchange for thousands of dollars in bribes.
Federal prosecutors said Sandoval took a total of $250,000 in bribes in connection with "corrupt activities with other public officials" in exchange for using his position as a state senator and chairman of the Senate Transportation Committee to benefit other people and their business interests. Those other public officials are not named in the plea deal.
Sandoval is cooperating with federal prosecutors as part of his plea deal.