Former Speaker Mike Madigan faces new charge, after AT&T agrees to $23 million fine for corruption scheme
CHICAGO (CBS) -- AT&T Illinois will pay a $23 million fine as part of a deal with federal prosecutors, after admitting it tried to illegally influence former House Speaker Michael Madigan, by arranging for a $22,500 payment to a Madigan ally.
A grand jury also has added an additional criminal charge to the indictment brought against Madigan and his longtime confidant, Michael McClain, earlier this year, adding a conspiracy count related to the AT&T scheme.
Former AT&T Illinois president Paul La Schiazza also has been indicted for his role in the conspiracy.
The company entered into a so-called deferred prosecution agreement with the feds, similar to the deal ComEd made with federal prosecutors in 2020 when the utility was charged with a years-long briery scheme that provided jobs, money, and contracts to Madigan associates.
Under AT&T's deal with the feds, the company will admit to arranging for payments to a Madigan ally to influence the former speaker's efforts to help with legislation sought by AT&T, pay a $23 million fine, and continue cooperating with the federal investigation. If AT&T holds up its end of the deal, the charge against it will be dropped after two years.
A formal arraignment for AT&T Illinois is scheduled for Monday at 11 a.m.
"We hold ourselves and our contractors to the highest ethical standards. We are committed to ensuring that this never happens again," an AT&T spokesperson said in a statement.
La Schiazza, 65, is accused in a five-count indictment of arranging for the $22,500 payment to a Madigan ally. His arraignment has yet to be scheduled.
According to the charges, AT&T arranged for the payments to be made through a lobbying firm, even though that Madigan ally did no work for the company, and had no role in advancing the legislation in question.
"AT&T Illinois knew that Madigan's support was essential to their legislative success," as his office had prevented the legislation they were seeking from advancing in previous years, according to their deal with the feds.
After that legislation stalled in 2015, someone at AT&T circulated a document called "Lesson[s] Learned, Setting the Stage for the 2017 Modernization Campaign," in which one "lesson learned" under the heading "Speaker Madigan" stated: "AT&T is not as 'helpful' when requests are made as Commonwealth Edison."
The ComEd scandal eventually led to Madigan stepping down in early 2021 as the longest-serving House Speaker in the country. Madigan himself was indicted earlier this year on federal racketeering, bribery, fraud, and extortion charges. Madigan is accused of using his official position to solicit personal financial gains for himself and his associates.
According to the new conspiracy charge against Madigan and McClain, from 2010 to around 2015, AT&T was seeking legislation that would have made it easier to terminate its obligation to provide landline telephone services to everyone in the state, projecting the legislation would save the company millions.
After that legislation stalled in 2015, AT&T renewed its efforts to pass the bill in 2017, and McClain sent an email to someone at AT&T asking for a "small contract" for a Madigan ally. La Schiazza later indicated AT&T had received a "GO order" to hire that ally, according to the indictment.
La Schiazza allegedly wrote an email advising others at AT&T that he had no objection to paying that ally through an intermediary as a consultant, instead of directly as a lobbyist, "as long as you are sure we will get credit and the box checked."
La Schiazza ultimately arranged for a series of payments to that Madigan ally, totaling $22,500, according to the indictment.
Meantime, Madigan voted in favor of the legislation AT&T was seeking, and after it was vetoed by the governor, voted to override the veto, and the legislation became law.
The indictment does not name the Madigan ally involved in the AT&T scheme, but the Chicago Tribune and Chicago Sun-Times have reported the ally was former Illinois state Rep. Eddie Acevedo, who resigned from the legislature in 2017, and has since pleaded guilty to federal tax evasion charges.
In late 2020, four former ComEd executives and consultants also were indicted on charges of conspiring to curry favor from Madigan to advance legislation benefitting the utility.
Charged with bribery conspiracy, bribery, and willfully falsifying ComEd books and records were:
• Michael McClain, who worked as a lobbyist for ComEd after a stint in the Illinois House of Representatives in the 1970s and early 1980s. McClain is a Madigan confidant;
• Anne Pramaggiore, chief executive officer of ComEd from 2012 to 2018 and then a senior executive at ComEd subsidiary Exelon Corp.;
• John Hooker, who served as vice president of external affairs for ComEd from 2009 to 2012 and then worked as an external lobbyist for ComEd;
• Jay Doherty, owner of Jay D. Doherty & Associates, which performed consulting services for ComEd from 2011 until 2019.
Madigan and his associates have pleaded not guilty to all of the charges. McClain, Pramaggiore, Hooker, and Doherty are scheduled to go on trial in March 2023. Madigan's trial date has not been set.
Madigan's attorneys declined to comment on the new conspiracy charge filed against him on Friday.