Feds file criminal case against ComEd, implicate Mike Madigan

Source: By Jon Seidel, Chicago Sun-Times • Posted: Monday, July 20, 2020

A federal subpoena to Madigan’s office shows the feds are interested in the speaker’s relationship with other companies as well. The feds also want wide-ranging records involving Madigan’s top political operatives.

House Speaker Michael Madigan
House Speaker Michael Madigan has been implicated in a criminal investigation involving ComEd. AP

A federal subpoena to Madigan’s office shows the feds are interested in the speaker’s relationship with other companies as well. The feds also want wide-ranging records involving Madigan’s top political operatives.

Early last year, when federal investigations into public corruption dominated the headlines, a longtime ally of House Speaker Michael Madigan gave a little advice to a ComEd vice president, according to an explosive court document filed Friday.

Lobbyist Mike McClain allegedly told the utility executive that, “I would say to you don’t put anything in writing.”

“All it can do is hurt ya,” he added.

The two then discussed a “favor” for Madigan that federal prosecutors now say was part of a brazen, years-long Chicago-style bribery scheme that sent $1.3 million to Madigan’s associates for doing little or no work for the utility, all while ComEd hoped to land Madigan’s support for legislation in Springfield worth more than $150 million.

ComEd has now been charged in federal court with bribery and is expected to pay a $200 million fine — believed to be the largest criminal fine ever in Chicago’s federal court. Several politicians, including Democratic Gov. J.B. Pritzker, said Madigan should resign if the allegations against one of the most powerful Democrats in the state are true.

While the bombshell case implicates several individuals in the alleged scheme, no one else has been criminally charged. And that includes Madigan.

“Our investigation is ongoing,” U.S. Attorney John Lausch said repeatedly at a Friday news conference outside the Dirksen Federal Courthouse when asked about additional criminal charges.

In fact, the feds earlier on Friday hit Madigan with a fresh subpoena that appears to seriously expand the investigation, with inquiries about AT&T Services Inc., Walgreens and Rush University Medical Center. The document, obtained by the Sun-Times, also seeks records concerning a laundry list of Madigan’s top supporters, including former Aldermen Mike Zalewski and Frank OIivo, current 13th Ward Ald. Marty Quinn, ComEd and Exelon, McClain, properties in Chinatown, previously written about by the Sun-Times, and former Ald. Danny Solis.

Walgreens had no comment. AT&T did not respond to a request for comment. Rush said in a statement only that it “has received and is cooperating with a subpoena for records reflecting work by, and communications with, certain government relations consultants for the period 2014 to the present.”

The Sun-Times first revealed in January 2019 that Solis has for years cooperated with federal prosecutors. It also reported that the FBI recorded Madigan during a meeting with Solis and a developer hoping to build a hotel also in the Chinatown neighborhood. The Sun-Times report about the feds’ Madigan recording, also in January 2019, landed nine days before McClain told the ComEd vice president on Feb. 7, 2019, not to put things in writing.

Solis also helped the feds build their case against indicted 14th Ward Ald. Ed Burke. A grand jury number on the subpoena delivered to Madigan on Friday matches the grand jury number in the Burke case, court records show.

A Madigan spokeswoman said Friday in a statement that he plans to cooperate and “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,” the statement said. “He has never made a legislative decision with improper motives and has engaged in no wrongdoing here. Any claim to the contrary is unfounded.”

The court document outlining the bribery details against ComEd largely paints a picture of McClain pressuring ComEd officials to give jobs, contracts and money to Madigan associates.

It alleges that Madigan and McClain sought from ComEd jobs, contracts and money for various Madigan associates between 2011 and 2019, and that McClain acted on Madigan’s behalf.

The court documents in the case do not identify Madigan, or even McClain, by name. Rather, they refer to a “Public Official A” who serves as the speaker of the Illinois House of Representatives. The Sun-Times has separately identified McClain as the person identified in the documents as “Individual A.”

Madigan’s quiet but iron-fisted control over his chamber has earned him the nickname “The Velvet Hammer,” and lobbyists and fellow legislators frequently toss around the maxim, “Never bet against the speaker.” The 78-year-old harkens back to the days of the late Mayor Richard J. Daley, whom Madigan considers his mentor.

The criminal charge against ComEd follows more than a year of intrigue regarding the feds’ public corruption investigations and whether their work would ever touch Madigan. The new allegations against him became public as part of a deal ComEd struck with the U.S. Attorney’s office commonly known as a deferred-prosecution agreement. If ComEd abides by the terms of the three-year arrangement, the bribery charge filed Friday is expected to be dismissed.

The agreement said ComEd will cooperate in the prosecutors’ investigations. Unlike in other such agreements, though, ComEd is not expected to plead guilty and formally admit to the criminal conduct. A judge still has to approve the deal.

A statement of facts attached to the agreement lays out the details of the allegations. They include claims that Madigan sought a job for Zalewski upon his retirement from the City Council, that Madigan had for decades ran an “old-fashioned patronage system” including getting people jobs as ComEd meter readers, that Madigan had an associate appointed to ComEd’s board of directors in 2019 — former McPier CEO Juan Ochoa — and even that ComEd hired students from Madigan’s ward for an internship program.

The allegations in the document date back to 2011, when it said McClain and a lobbyist identified by the Sun-Times as John Hooker developed a plan to help two Madigan associates by funneling money through a consulting company and treating them as subcontractors. ComEd would not pay the unidentified men directly but rather increase its payments to the consulting company to cover the two Madigan associates. Meanwhile, contracts and invoices made it falsely appear that those payments were in return for the consultant’s advice on “legislative issues” and “legislative risk management activities.”

In May 2018 Madigan — through McClain — allegedly asked then-ComEd CEO Anne Pramaggiore to hire Zalewski, the feds allege. Another deal was then struck to pay Zalewski $5,000 monthly as a subcontractor for the consultant. Pramaggiore allegedly agreed that Madigan would get to tell Zalewski about the arrangement.

A spokesman for Pramaggiore, who later became a senior executive for Exelon but retired last year, said in a statement that “Ms. Pramaggiore has done nothing wrong and any inference to the contrary is misguided and false.”

Also in May 2018, McClain allegedly told the ComEd vice president — identified by the Sun-Times as Fidel Marquez — why the Madigan associates were being paid. He explained that one of them was “one of the top three precinct captains” who also “trains people how to go door to door . . . so just to give you an idea how important the guy is.”

Marquez could not be reached for comment Friday, nor could McClain.

In February 2019, McClain allegedly told Hooker how to explain the payments within the company. McClain allegedly said, “We had to hire these guys because (Madigan) came to us. It’s just that simple.”

Two days later, the consultant allegedly cautioned Marquez that ComEd should not tamper with the arrangement because “your money comes from Springfield” and the consultant had “every reason to believe” McClain had spoken to Madigan about the deal.

The consultant allegedly added that the Madigan associates “keep their mouth shut, and, you know, so. But, do they do anything for me on a day-to-day basis? No.” He said the payments were made “to keep (Madigan) happy, I think it’s worth it, because you’d hear otherwise.”

The document also alleges Madigan sought the appointment of Ochoa to the ComEd board of directors through McClain in 2017. However, opposition within the company to that appointment in May 2018 allegedly prompted Pramaggiore to ask McClain if Madigan would be satisfied with a part-time job for Ochoa that paid the same amount as the board position — $78,000 a year.

McClain allegedly told Pramaggiore that Madigan would appreciate it if she would “keep pressing” for the appointment. Pramaggiore allegedly agreed to do so, telling McClain later in the year that, “you take good care of me and so does our friend (Madigan) and I will do the best that I can to, to take care of you.”

Finally, the document alleges that ComEd agreed in 2011 to retain a law firm in an attempt to influence Madigan. When that law firm’s contract came up for renewal in 2016, it said ComEd sought to reduce the hours of legal work down from 850 hours specified in an earlier agreement. An attorney from the law firm then complained to McClain.

That’s when McClain allegedly wrote to Pramaggiore, reminding her “how valuable” that lawyer was to “our Friend.”

He added, “I know the drill, and so do you. If you do not get involve (sic) and resolve this issue of 850 hours for his law firm per year then he will go to our Friend.” He allegedly wrote that Madigan “will call me, and then I will call you.”

He concluded, “Is this a drill we must go through?”

Contributing: David Roeder and Mitchell Armentrout