CHICAGO _ ComEd is paying a $200 million criminal fine as part of a federal investigation into a "years-long bribery scheme" involving jobs, contracts and payments to allies of Illinois House Speaker Michael Madigan, the U.S. Attorney's office in Chicago announced Friday.
Madigan, a Southwest Side Democrat and the nation's long-serving speaker, has not been charged with any wrongdoing. Madigan confirmed in a statement that on Friday morning, his offices were served subpoenas asking for documents related to his job recommendations, among other things.
"(The speaker) has never made a legislative decision with improper motives and has engaged in no wrongdoing here. Any claim to the contrary is unfounded," read a statement from Madigan's political operation.
Madigan plans to cooperate with the request for documents. "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" the statement read.
Prosecutors alleged that ComEd "admitted that its efforts to influence and reward the high-level elected official" included legislation that affected the regulatory process used to determine the electricity rates ComEd charged its customers.
At a news conference, U.S. Attorney John Lausch said the filing "speaks volumes about the nature of the very stubborn public corruption problem we have here in Illinois."
"The admitted facts detail a nearly decadelong corruption scheme involving top management at a large public utility, leaders of state government, consultants and several others inside and outside of government. In two words, it's not good," he added.
Prosecutors described the alleged scheme.
"The company admitted that it arranged for jobs and vendor subcontracts for Public Official A's political allies and workers even in instances where those people performed little or no work that they were purportedly hired by ComEd to perform," the U.S. Attorney's office said in a statement.
In a criminal filing, prosecutors say Public Official A was the House speaker, which is Madigan. The veteran 13th Ward politician's associates received $1.32 million from 2011-2019, prosecutors said.
Politicians reacted Friday after the major federal announcement. At an unrelated news conference in Waukegan, Democratic Gov. J.B. Pritzker said he was "deeply troubled and frankly I'm furious" about the reports of the federal case involving ComEd and Madigan.
"The speaker has a lot that he needs to answer for _ to authorities, to investigators and most importantly to the people of Illinois," Pritzker said. "If these allegations of wrongdoing by the speaker are true, there is no question that he will have betrayed the public trust and he must resign."
Pritzker urged Madigan "to fully cooperate with the investigation and answer all questions as quickly as possible."
"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 were asked to do," he said.
A criminal complaint filed Friday charges ComEd with one count of bribery. Under a deferred prosecution agreement, prosecutors will drop the charge if the utility cooperates with authorities and abides by certain practices.
Prosecutors put a value of $150 million on the legislative benefits ComEd received. That included a 2011 bill in which "ComEd was able to more reliably determine rates it could charge customers" and a 2016 renewal of a regulatory law that governs how ComEd does business.
U.S. Attorney John Lausch called the $200 million penalty the largest criminal fine in the history of the Northern District of Illinois.
In a statement, ComEd's parent company, Exelon, said it said it had cleaned up its lobbying practices and noted it had pledged to fully cooperate with the investigation.
In an interview with the Tribune, Exelon CEO Christopher M. Crane added, "We take this seriously and we corrected it. It should never have happened and it won't happen again." He said that he believed that everyone who "orchestrated any of that behavior" had left ComEd.
The agreement with federal prosecutors says ComEd can't seek a tax deduction in relation to the fine and can't recoup it through "surcharges, fees or any other charges to customers." Crane said the Exelon would give ComEd the money to pay the fine, and then ComEd would pay Exelon back from its profits.
The federal filing says authorities could have fined ComEd between $240 million and $480 million, but the utility got a "discount" off the bottom of that range for "substantial remediation and cooperation." Half the money is due in a month and the other half in three months.
The ComEd charge and fine come more than a year after federal authorities raided the homes of several Madigan allies.
The Tribune first reported last December that federal authorities have asked questions about Madigan and his political operation as part of an ongoing investigation, according to four people who have been interviewed.
The sources, all of whom requested anonymity, said FBI agents and prosecutors asked about connections between Commonwealth Edison lobbyists and Madigan, lobbyists giving contracts to people tied to the speaker, and city, state and suburban government jobs held by his associates.
They also said authorities had numerous questions about the speaker's relationship and dealings with longtime confidant Michael McClain, a former ComEd lobbyist.
In October, the Tribune reported that the federal investigation into ComEd's lobbying activities centers on whether the utility giant hired politically connected lobbyists to curry favor with lawmakers in exchange for favorable action at the Illinois Capitol.
As part of the investigation, authorities were scrutinizing certain ComEd executives and have zeroed in on payments through the company's vast network of consultants to some individuals to seemingly circumvent lobbying disclosure rules, a source said. Some of the people who wound up being paid seemed to have done little actual work, the source added.
The federal investigation into ComEd's lobbying efforts put a spotlight on one of the most exclusive rites of passage in Springfield: Democratic lawmakers and top staffers to Speaker Madigan leaving state government to push the utility giant's agenda in the halls of the Capitol.
In 2019 alone, the lobbying team for ComEd and parent company Exelon included nine former Democratic lawmakers, including two recent members of Madigan's leadership team and the daughter of a former Cook County Democratic chairman. Also on the list was a former Madigan political director and two of the speaker's former legal counsels.
ComEd and Exelon enjoyed considerable success at the Capitol during the last decade, persuading the General Assembly to approve a smart-grid overhaul and a bailout of the nuclear power plants in downstate Clinton and the Quad Cities with consumers helping foot the bill.
Those wins took place under Pramaggiore, who led ComEd and was elevated to CEO of Exelon Utilities. The utility employed an army of lobbyists and sprinkled millions of dollars in campaign contributions to legislators, with the companies consistently among the top corporate donors in Illinois.
Pramaggiore spokesman Bryan Locke declined to comment on whether she is cooperating with federal authorities. "Ms. Pramaggiore has done nothing wrong and any inference to the contrary is misguided and false," Locke said in a statement.
"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," Locke wrote.
Madigan, 78, is the nation's longest-serving state House speaker, a post he has held since 1983 with the exception of two years when Republicans took control of the House in the mid-1990s. Known as the "Velvet Hammer," the Southwest Side lawmaker has been in the legislature since 1971 and is regarded as one of, if not the, most powerful politicians in the state with the single-handed ability to control the fate of legislation in the General Assembly.
Moreover, Madigan serves as the chairman of the Illinois Democratic Party and was recently named as a four-year member of the Democratic National Committee.
In early November last year, Madigan was asked about the federal investigation and its ties to current and former allies and operatives and declared: "I am not the target of anything."
The nexus of the federal investigation into ComEd and Madigan's operation is McClain, a close friend and adviser to the House speaker and a former lawmaker and Quincy attorney who retired as a high-profile lobbyist from the utility in 2016 but continued collecting six-figure payments from the company.
Federal agents raided McClain's home in Quincy in mid-May of last year, which turned out to be the same month ComEd said his payments stopped. The Tribune also first reported in November that authorities secretly recorded McClain's phone calls.
The federal filing also refers to "CEO-1," which is Pramaggiore. The former Exelon Utilities CEO abruptly retired in October as the probe went on. Her exit came less than a week after the company acknowledged receiving a second subpoena linked to the investigation.
Pramaggiore was key to ComEd's success over the years in Springfield. Exelon and ComEd have one of the largest lobbying contingents at the Capitol and historically have been among the biggest campaign contributors to state lawmakers. An attempt to reach Pramaggiore's attorney was unsuccessful Friday.
She herself has been a prolific donor to Illinois politicians, giving more than $240,000 dating back to 2005. State campaign finance records show Pramaggiore's giving included $16,500 to funds controlled by embattled Alderman Edward Burke and $20,250 to Cook County Board President Toni Preckwinkle.
Pramaggiore also gave $10,000 to the campaign of former Mayor Rahm Emanuel, who invited Pramaggiore and her husband, Michael Harrington, on a junket to Rome for the elevation of then-Chicago Archbishop Blase Cupich to cardinal. At the time, employees of ComEd and Exelon had made more than $183,000 in contributions supporting Emanuel, the Tribune reported.
The federal paperwork involving Madigan threatens to roil the fall election season in Illinois, which has become a reliably blue state where the veteran House speaker has used his fundraising power and map-making ability to generate veto-proof Democratic majorities in the state House and Senate.
For years, Illinois Republicans have sought to put their focus on Madigan to try to blame him for decades of state ills but have largely been unsuccessful in using it to motivate voters.
Only days ago, House Republican leader Jim Durkin of Western Springs led GOP colleagues in attacking Madigan for failing to include ethics legislation as part of the pandemic-shortened legislative session in May.
Madigan told reporters in Springfield that ethics reforms were under discussion but sought to turn the tables on Republicans.
"I would suggest that the Republicans that want to pursue ethics reform go out to Washington, follow up on President Trump's promise to drain the swamp," Madigan said Wednesday, according to the State Journal-Register of Springfield.
Illinois Republican Chair Tim Schneider issued a statement saying, "Our hearts go out to the people of Illinois who are once again left yearning for elected leaders who work for them, not for themselves. The Democratic culture of corruption in Illinois must come to an end."
