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New charge filed against Mike Madigan as AT&T Illinois agrees to pay $23 million fine

Mike Madigan, as seen on the cover of "The House That Madigan Built: The Record Run of Illinois' Velvet Hammer." (Courtesy)
Mike Madigan, as seen on the cover of "The House That Madigan Built: The Record Run of Illinois' Velvet Hammer." (Courtesy)

Two major utilities serving Illinois residents have now been charged as a result of the yearslong investigation that swirled around Madigan.

(updated 10/14/22 4:58 p.m.) Hoping to overcome past failures in Springfield, an AT&T Illinois executive allegedly circulated a “Lesson Learned” document for 2017 with a key bit of feedback about the utility’s relationship with then-Illinois House Speaker Michael Madigan.

It said AT&T was “not as ‘helpful’ when requests are made as Commonwealth Edison,” which had yet to be charged with bribery for its conduct involving the powerful Southwest Side Democrat.

So when Madigan confidant Michael McClain asked in February 2017 for “a small contract” for former state Rep. Edward Acevedo, then-AT&T Illinois President Paul La Schiazza allegedly told his colleagues he had no objection to making it happen through an intermediary.

“As long as you are sure we will get credit and the box checked,” La Schiazza allegedly wrote in a March 2017 email.

Now, five years after it took its cues from ComEd, AT&T Illinois and its former president have again followed in its footsteps, becoming ensnared in a long-awaited expansion of the racketeering conspiracy case against Madigan, 80, and McClain, 75.

Madigan and McClain now face an additional conspiracy charge alleging they worked with La Schiazza to have $22,500 paid to Acevedo in an attempt to influence Madigan as crucial legislation was considered in Springfield.

La Schiazza also faces a separate five-count conspiracy indictment. But AT&T Illinois is set to resolve its own criminal charge with a so-called deferred-prosecution agreement, similar to the one struck by ComEd in 2020.

The result is that two major utilities serving Illinois residents have now faced federal prosecution as a result of the yearslong investigation that swirled around Madigan. The probe ended his reign as the longest-serving state house speaker in the nation, and it led to the original racketeering indictment filed against him earlier this year.

AT&T Illinois’ two-year deal says it has cooperated with the feds and will continue to do so. Attached to it was an eight-page “statement of facts,” in which the utility admitted to its conduct. It has also agreed to pay a $23 million fine. ComEd in 2020 agreed to pay $200 million.

AT&T Illinois is officially known as Illinois Bell Telephone Company LLC. WBEZ reported earlier this year on the possibility the utility could be charged as part of the Madigan investigation.

Defense attorneys for Madigan, McClain and Acevedo declined to comment. La Schiazza could not be reached. An AT&T Illinois spokesperson said in a statement, “we hold ourselves and our contractors to the highest ethical standards. We are committed to ensuring that this never happens again.”

AT&T Illinois’ arraignment was set for Monday morning. Arraignments for Madigan, McClain and La Schiazza had not yet been scheduled as of early Friday afternoon. When Madigan was originally arraigned in March, he managed to make it through the entire hearing, held by telephone, without being heard.

Acevedo has not been charged in the scheme. He pleaded guilty late last year to tax evasion, and he is now serving a six-month prison sentence. A subpoena that originally tied him to the corruption probe was first reported in June 2020 by the Chicago Sun-Times.

The new charges come as trials near for other defendants caught up in the Madigan investigation. Madigan’s former chief of staff, Timothy Mapes, faces perjury and attempted obstruction of justice charges and was due for trial in January. But U.S. District Judge John Kness, who is newly assigned to the case, told lawyers Thursday it wouldn’t fit his schedule and would have to be postponed.

Meanwhile, McClain and three others tied to ComEd are set to stand trial March 6 in what could serve as a preview of Madigan’s trial.

Gov. JB Pritzker said the new criminal charges “further condemns a system rife with promises of pay-to-play, and I have worked and will continue to work to end the era of corruption and self-dealing among Illinois politicians. I appreciate the work of law enforcement to help restore the public’s trust in government and urge all parties to move swiftly to bring these charges to a close.”

AT&T Illinois’ move to pay Acevedo through an intermediary followed its failure to have legislation passed that would help end the utility’s obligation to provide landline telephone service to all Illinois residents, records show.

After La Schiazza told fellow AT&T Illinois executives he had no objection to the Acevedo plan, the other executives discussed the idea by email on March 31, 2017. The executives, who are no longer with the utility, were not named in the records filed as part of the case Friday.

One, who served as director of legislative affairs, asked, “[A]re we 100% certain that we will get credit for being responsive? … I think remaining question is if we would get credit from the powers that be.”

Another, who served as assistant vice president of legislative affairs, replied, “I would hope that as long as we explain the approach to McClain and [Acevedo] gets the money then the ultimate objective is reached.”

The director replied, “I don’t think [La Schiazza] wants this based on ‘hope.’ We need to confirm prior to executing this strategy.”

The utility funneled the payments to Acevedo through a firm belonging to lobbyist Tom Cullen, records show. It did so under the pretext that Acevedo would prepare a report on the political dynamics of the Latino caucuses in Chicago and the General Assembly.

Cullen’s attorney, Thomas Anthony Durkin, declined to comment Friday. Cullen has not been charged.

McClain confirmed around April 28, 2017, that payments to Acevedo totaling $22,500 would suffice after Acevedo initially rejected the proposal, records show. Acevedo ultimately accepted it.

AT&T Illinois then had nine $10,000 payments made to Cullen’s firm — including $2,500 from each meant for Acevedo — between June 1, 2017, and Jan. 31, 2018, records show.

The feds say Acevedo did no work for the money — not even his purported assignment.

As AT&T Illinois sought passage of the legislation at issue, it argued it was losing thousands of landline customers monthly. The utility said it would be able to focus on newer, more in-demand technology. The bill also included an increase in monthly 911 fees.

The controversial measure faced opponents such as the Citizens Utility Board, a consumer watchdog group.

“CUB focuses on fighting the utility companies,” said Jim Chilsen, spokesman for CUB, who didn’t want to speak much on the legislation’s political consequences. “I think this is a sad story all around.”

Evanston Mayor Daniel Biss was a state senator at the time, and he was one of just a few lawmakers to vote against overriding a veto from then-Gov. Bruce Rauner.

He said he opposed the legislation because he thought landlines were essential and he was uncomfortable with the 911 fee increase.

But he doesn’t remember hearing anything politically untoward.

“My recollection is more about a sense of inevitability than a feeling of intense political pressure,” Biss said. “Senate Democratic caucus staff had been involved in the negotiations and the vibe was very much ‘This is fine, this needs to happen.’”

Contributing: Mitch Dudek, Tim Novak, Tina Sfondeles

Jon Seidel is a federal courts reporter for the Chicago Sun-Times.
Alex Degman is a Statehouse reporter with WBEZ.