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* Let’s take a look at ComEd’s deferred prosecution agreement, starting with this section entitled “Hiring of Public Official A’s [Speaker Madigan’s] Associates as Vendor ‘Subcontractors’ Who Performed Little or No Work for ComEd”…
Beginning no later than in or around 2011, Public Official A and Individual A sought to obtain from ComEd jobs, vendor subcontracts, and monetary payments associated with those jobs and subcontracts for various associates of Public Official A, such as precinct captains who operated within Public Official A’s legislative district.
In or around 2011, Individual A and Lobbyist 1 developed a plan to direct money to two of Public Official A’s associates (“Associate 1” and “Associate 2”) by having ComEd pay them indirectly as subcontractors to Consultant 1. Payments to Associate 1 and Associate 2, as well as later payments to other subcontracted associates of Public Official A, continued until in or around 2019, even though those associates did little or no work during that period.
Consultant 1 agreed in 2011 that Public Official A’s associates would be identified as subcontractors under Consultant 1’s contract and that ComEd’s payments to Consultant 1 would be increased to cover payments to those subcontractors. Between in or around 2011 and 2019, Consultant 1 executed written contracts and submitted invoices to ComEd that made it falsely appear that the payments made to Company 1 were all in return for Consultant 1’s advice on “legislative issues” and “legislative risk management activities,” and other similar matters, when in fact a portion of the compensation paid to Company 1 was intended for ultimate payment to Public Official A’s associates, who in fact did little or no work for ComEd. Consultant 1 and Company 1 did little, if anything, to direct or supervise the activities of Public Official A’s associates, even though they were subcontracted under and received payments through Company 1. Moreover, because they were paid indirectly through Company 1, the payments to Public Official A’s associates over the course of approximately eight years were not reflected in the vendor payment system used by ComEd, and as a result, despite that Public Official A’s associates were subcontracted under and receiving payments through Company 1, no such payments were identifiable in ComEd’s vendor payment system.
Certain senior executives and agents of ComEd were aware of these payments from their inception until they were discontinued in or around 2019. For example, in or around May 2018, Public Official A, through Individual A, asked CEO-1 to hire a political ally of Public Official A who was retiring from the Chicago City Council at the end of the month (“Associate 3”).
Public Official A, we know, is Speaker Madigan. The alderman who retired in 2018 was likely Michael Zalewski. Could “Consultant 1″ be this guy?…
For example, the previously unreported records show ComEd paid Jay D. Doherty and Associates $3,104,250 between 2011 and 2018. That amount is almost six times greater than the roughly $530,000 he disclosed being paid by ComEd in lobbyist disclosures filed with the city of Chicago. In federal filings, ComEd vaguely listed Doherty’s work only as “business consulting.” […]
WBEZ has reported that investigators are looking into whether Doherty served as a “pass through” for ComEd’s under-the-radar deals with politically connected individuals and companies, some of whom are suspected of doing little or no work.
* Those alleged pass-through payments to Consultant 1 explained…
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 don’t come right out and say it, but they’re all but alleging bribery here.
* “Individual A” looks to my eyes to be Mike McClain…
On or about May 16, 2018, Individual A explained to Senior Executive 1 why certain individuals were being paid indirectly through Company 1, by making reference to their utility to Public Official A’s political operation. Individual A identified Associate 1, one of the several individuals on Company 1’s payroll, as “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.” […]
On or about February 11, 2019, Individual A had a conversation with Lobbyist 1, who by that time had retired from ComEd, but had continued to serve as a paid external lobbyist to ComEd. In discussing how the renewal of Company 1’s contract—which included significant payments to Company 1 to account for indirect payments to Public Official A’s associates—should be communicated internally, Individual A said, “We had to hire these guys because [Public Official A] came to us. It’s just that simple.” Lobbyist 1 agreed, and added, “It’s, it’s clean for all of us.”
Lobbyist 1, in my opinion, looks like John Hooker.
* Here’s where the alleged quid pro quo comes in…
Consultant 1 emphasized that he had told no one of the arrangement per instructions previously given to Consultant 1, and cautioned Senior Executive 1 that ComEd should not tamper with the arrangement because “your money comes from Springfield,” and that Consultant 1 had “every reason to believe” that Individual A had spoken to Public Official A about the retention of Public Official A’s associates, and knew Lobbyist 1 had done so Consultant 1 added that Public Official A’s associates “keep their mouth shut, and, you know, so. But, do they do anything for me on a day to day basis? No.” Consultant 1 explained that these payments were made “to keep [Public Official A] happy, I think it’s worth it, because you’d hear otherwise.”
* More…
On or about March 5, 2019, Individual A and ComEd personnel participated in a meeting during which they discussed Company 1’s contract and why the indirect payments to Public Official A’s associates made under the guise of that contract should be continued for another year. During that meeting, Individual A explained that for decades, Public Official A had named individuals to be ComEd employees, such as meter readers, as part of an “old-fashioned patronage system.” In response, a ComEd employee acknowledged that such hires could be a “chip” used by ComEd. ComEd renewed Company 1’s contract.
* We know that the feds were listening to McClain’s phone calls. This looks like an example…
On or about March 6, 2019, Individual A and Lobbyist 1 discussed the renewal of Company 1’s contract. During the conversation, Lobbyist 1 explained that “with the [Consultant 1] stuff, you got a little leg up,” to which Individual A agreed. Lobbyist 1 later added, “I mean it’s uh, unmentioned, but you know, that which is understood need not be mentioned.” Individual A responded, “Right. Exactly. Exactly.”
* From the section entitled “Appointment of Board Member 1 as Member of the Board of Directors at the Request of Public Official A”…
Beginning in or around 2017, Public Official A sought the appointment of an associate to the ComEd Board of Directors (hereinafter referred to as “Board Member 1”). Public Official A’s request was communicated by Individual A to CEO-1. In or around May 2018, in response to internal company opposition to the appointment of Board Member 1, CEO-1 asked Individual A if Public Official A would be satisfied if CEO-1 arranged for Board Member 1 to receive a part-time job that paid an equivalent amount of money to a board member position, namely, $78,000 a year. Individual A told CEO-1 that Public Official A would appreciate if CEO-1 would “keep pressing” for the appointment of Board Member 1, and CEO-1 agreed to do so. In or around September 2018, CEO-1 (who by this time had been promoted to an executive position within Exelon Utilities, in which capacity CEO-1 maintained oversight authority over ComEd) assured Individual A that CEO-1 was continuing to advocate for the appointment of Board Member 1 made at Public Official A’s request because “You take good care of me and so does our friend [Public Official A] and I will do the best that I can to, to take care of you.”
On or about April 25, 2019, CEO-1 advised Individual A by text message, “Just sent out Board approval to appoint [Board Member 1] to ComEd Board.” The following day, April 26, 2019, ComEd filed a notice with the United States Securities and Exchange Commission stating that Board Member 1 had served as a director of ComEd since April 2019. Although ComEd and Exelon conducted due diligence on Board Member 1 and ultimately determined he was qualified for a Board position, no one at ComEd or Exelon recruited Board Member 1 to serve as a director, and ComEd did not interview or vet other outside candidates for the vacant board seat. ComEd appointed Board Member 1, in part, with the intent to influence and reward Public Official A in connection with Public Official A’s official duties.
Whoa. Legal or not, that’s brazen.
…Adding… From an SEC filing under “Election of Directors”…
Juan Ochoa, Age 48. Mr. Ochoa has served as a Director of ComEd since April 2019.
In or around 2011, ComEd agreed to retain Law Firm A, and entered into a contract pursuant to which ComEd agreed to provide Law Firm A with a minimum of 850 hours of attorney work per year. This contract was entered into with Law Firm A, in part, with the intent to influence and reward Public Official A in connection with Public Official A’s official duties and because personnel and agents of ComEd understood that giving this contract to Law Firm A was important to Public Official A. In 2016, Law Firm A’s contract was up for renewal. As part of renewal discussions, personnel within ComEd sought to reduce the hours of legal work they provided to Law Firm A from the 850 hours specified in the 2011 retention agreement because ComEd paid only for hours worked and there was not enough appropriate legal work to give to Law Firm A to fill 850 annual hours.
Thereafter, an attorney associated with Law Firm A [Lawyer A] complained to Individual A about ComEd’s effort to reduce the amount of work provided to Law Firm A. On or about January 20, 2016, Individual A contacted CEO-1 and wrote, “I am sure you know how valuable [Lawyer A] is to our Friend [Public Official A],” and then went on to write, “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 [Public Official A]. Our Friend [Public Official A] will call me and then I will call you. Is this a drill we must go through?” CEO-1 replied in writing, “Sorry. No one informed me. I am on this.” Thereafter, CEO-1 tasked a ComEd employee, who was assigned as a “project manager” to assist with the project of obtaining legislative approval of FEJA, to ensure that Law Firm A’s contract was renewed. The project manager had no oversight authority over ComEd’s legal department and was not otherwise involved in deciding what legal professionals the legal department retained. The project manager was assigned the task of ensuring Law Firm A’s contract was renewed because the work provided to Law Firm A was, in part, designed to influence and reward Public Official A in connection with Public Official A’s official duties, including the promotion and passage of FEJA. ComEd agreed in or around June 2016 to renew Law Firm A’s contract with substantially reduced annual hours.
Beginning no later than 2013, and continuing until in or around 2019, ComEd operated an internship program. As part of the program, ComEd would accept a specified target number of students who primarily resided in a Chicago ward that Public Official A was associated with (“Public Official A’s Ward”) and that were recommended to ComEd by associates of Public Official A, including Individual A. ComEd hired students from Public Official A’s Ward, in part, with the intent to influence and reward Public Official A in connection with Public Official A’s official duties.
Between in or around 2011 and in or around 2019, during the same time frame that ComEd was making payments to Public Official A’s associates, and extending other benefits for the purpose of influencing and rewarding Public Official A, ComEd was also seeking Public Official A’s support for legislation that was beneficial to ComEd, including EIMA and FEJA, that would ensure a continued favorable rate structure for ComEd. ComEd acknowledges that the reasonably foreseeable anticipated benefits to ComEd of such legislation exceeded $150,000,000.
posted by Rich Miller
Friday, Jul 17, 20 @ 10:07 am
Sorry, comments are closed at this time.
Previous Post: *** UPDATED x1 *** Feds asked assessor for information on Pritzker’s property tax break as well as several others
Next Post: *** UPDATED x3 - Brady, Durkin weigh in *** ILGOP responds: “This is unprecedented”
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Anything in there about the Illinois Commerce Commission, that regulates ComEd, and its board members that may be related to Public Official A? Asking for a friend.
Comment by Put the fun in unfunded Friday, Jul 17, 20 @ 10:19 am
Sorry, meant the alderman, not Public Official A
Comment by Put the fun in unfunded Friday, Jul 17, 20 @ 10:21 am
Turns out the ultimate insider McClain is actually a reckless moron. Gotta be careful who your friends are.
Comment by Excitable Boy Friday, Jul 17, 20 @ 10:21 am
It looks like great work by the U.S. Attorney’s Office. Amar deserves great credit for the public corruption investigations he’s leading.
Comment by Keyrock Friday, Jul 17, 20 @ 10:23 am
I’m becoming more and more sold by state/local control over utilities…at this point, ComEd is practically a public entity guided completely by political control. Might as well make it official and remove these profit incentives for public officials…
Comment by NIU Grad Friday, Jul 17, 20 @ 10:25 am
“Oh yeah, a buffer. The family had a lot of buffers!”
– MrJM
Comment by @misterjayem Friday, Jul 17, 20 @ 10:27 am
“That which is understood, need not be mentioned”
Carve that in stone on the capitol.
Comment by Langhorne Friday, Jul 17, 20 @ 10:30 am
—Turns out the ultimate insider McClain is actually a reckless moron. Gotta be careful who your friends are.—
Reckless in his comments and emails for years. Madigan’s judgment really failed him by placing his faith in McClain’s competence.
And this “Friends and Family Program” is, however, a scale of misjudgment on its own plane.
Comment by King Louis XVI Friday, Jul 17, 20 @ 10:35 am
The word quid pro quo comes to mind.
Comment by regular democrat Friday, Jul 17, 20 @ 10:37 am
Even the interns had to come to from the 13th ward. That is some center-cut USDA Grade A prime corruption.
Comment by Donnie Elgin Friday, Jul 17, 20 @ 10:39 am
Mr. Ochoa’s effectiveness on the ComEd board is fatally compromised. Fellow board members will likely assume he’s wearing a wire from here on out. Of course, like Blago, when you finally realize you’re being recorded it is way too late.
Comment by Downstate Friday, Jul 17, 20 @ 10:40 am
I would insert the Ron Paul it’s happening gif here were it possible on this board LOL
Finally…
Comment by essentially working Friday, Jul 17, 20 @ 10:47 am
Where are the individual indictments? This is obvious.
“I’m becoming more and more sold by state/local control over utilities”
I disagree. I think the same quid pro quo continues to happen and is easier to hide.
https://www.chicagotribune.com/opinion/editorials/ct-edit-ed-burke-corruption-mwrd-ig-cook-county-20190423-story.html
https://www.nwitimes.com/news/local/former-chicago-water-official-pleads-guilty-in-trucking-scandal/article_080064fd-3244-5578-acbf-3aaec59fb1e0.html
https://www.chicagotribune.com/news/criminal-justice/ct-black-dog-petroleum-federal-corruption-probe-20191218-sbpbnu3gavgfjfigwjhghzmtz4-story.html
https://www.chicagotribune.com/news/criminal-justice/ct-black-dog-petroleum-city-fuel-contract-protest-20200709-wqvbf2ly35bf7jw2qzekwu4t5e-story.html
Comment by 1st Ward Friday, Jul 17, 20 @ 10:52 am
- 1st Ward -
The trucking scandal was 2005
Might as well drag out George Ryan while you’re at it, lol
To the post,
Your buffers only work if your buffers don’t make it about how they link the parties.
Otherwise…
… all the buffers do is make the road map easier.
Cicci knew how the buffers worked, tried to give a road map, but in the end Cicci had a buffer to the buffer.
McClain gave the map, the rest stops, visitor centers, gas stations, restaurants…
I compare McClain to the “underboss of KC” in “Casino”… and that underboss sunk the whole thing.
Comment by Oswego Willy Friday, Jul 17, 20 @ 10:58 am
Your money comes from Springfield
The arrogance of the Illinois Democratic party summed up in a phrase
Comment by Lucky Pierre Friday, Jul 17, 20 @ 11:02 am
Second poll question: Who will be the first to sing?
Comment by Southside Markie Friday, Jul 17, 20 @ 11:08 am
@OW Yes one link is from 2005 and now there are additional trucking contract scandals with the Water Department (see 1st, 3rd and 4th article link).
Point of the post was bringing it closer to city hall/state control would not help with corruption. Keeping it arms length will still have issues but easier to get corruption out.
Comment by 1st Ward Friday, Jul 17, 20 @ 11:09 am
Maybe they thought their messages were sufficiently encrypted? What is this thing of our’s? No one has ever told me what it specifically refers to.
Comment by Three Dimensional Checkers Friday, Jul 17, 20 @ 11:11 am
“…the previously unreported records show ComEd paid Jay D. Doherty and Associates $3,104,250 between 2011 and 2018.” I didn’t know the Club offices at 360 N. Michigan had been searched by the feds in May, 2019, when I attended the Kwame Raoul luncheon on Oct. 21, 2019, held at the Union League Club.
Current contacts from City Club show, “Our mailing address is” 70 W. Hubbard Street, Suite 202, so it appears that the once venerable City Club had to give up their tony 360 N. Michigan offices. Probably had “bugs” in the walls they couldn’t get rid of.
Since they’re looking at Jay Doherty, maybe the USAO-NDIL can tell us, what is the cozy relationship between City Club MC Jacki Robinson-Ivy and AG Kwame Raoul? I expect Raoul’s dusty Public Integrity Bureau will investigate ComEd next s/
Comment by Payback Friday, Jul 17, 20 @ 11:12 am
=I compare McClain to the “underboss of KC” in “Casino”… and that underboss sunk the whole thing. =
If I recall, it was the guy who kept travel notes to make sure he got his reimbursements.
=… all the buffers do is make the road map easier.=
Agree.
When a buffer flips, you get the guys on both sides of him. A quiet buffer is a shield, a noisy buffer connects the dots.
Comment by phenom_Anon Friday, Jul 17, 20 @ 11:13 am
- arrogance of the Illinois Democratic party -
Pretty sure the only major legislation your hero Rauner worked on in cooperation with Madigan was an Exelon bail out, so I wouldn’t get too sanctimonious now.
Comment by Excitable Boy Friday, Jul 17, 20 @ 11:27 am
I say this as a longtime Democrat who’s worked in this business for decades.
This filing today is the writing on the wall. We’ve seen how this story goes repeatedly over the years — Fawell, Ryan, Blogo and his cronies, etc. It’s only a matter of time at this point. The Speaker is going to be taken down one way of the other. The news will not get better, its only going to get worse.
It’s time for Democrats to cut the losses, and call for the Speaker to resign.
Comment by ILPundit Friday, Jul 17, 20 @ 11:28 am
-Mr. Ochoa’s effectiveness on the ComEd board is fatally compromised. Fellow board members will likely assume he’s wearing a wire from here on out.-
Not quite. His effectiveness is compromised because it appears he was appointed corruptly. Not sure why they would need to wire him now given the company’s issues have been resolved and the individuals at risk are now outside the company.
Comment by Ron Burgundy Friday, Jul 17, 20 @ 11:31 am
You have that completely backwards Excitable Boy
That is the only legislation Mike Madigan would compromise on with Governor Rauner. Wonder why?
That quote is right up there with- If you have a business, you didn’t build that, someone else made that happen
Comment by Lucky Pierre Friday, Jul 17, 20 @ 11:46 am
Reminder….Puerto Rico’s publicly owned utilities have been a cesspool of local government corruption.
Comment by JudgeDavidDavis Friday, Jul 17, 20 @ 11:54 am
I never understood why Public Official A trusted Individual 1 … I never did.
Comment by Louis Howe Friday, Jul 17, 20 @ 12:10 pm
The only surprise in all of this is that it took this long to implicate him. Maybe a new state motto comes out of this:
Illinois - Bankrupt by Choice
Comment by Really Friday, Jul 17, 20 @ 12:10 pm
Time for a new state Democratic Party chair. I’m sure Madigan has groomed someone like Bill Houlihan for the spot.
Comment by Downstate Friday, Jul 17, 20 @ 12:16 pm
=== It’s time for Democrats to cut the losses, and call for the Speaker to resign.===
100% this. How you can be tied to him after this is beyond me? Everything that has been said about him for years has been proven and criminally charged.
Comment by AD Friday, Jul 17, 20 @ 12:28 pm
===… has been proven and criminally charged.===
Slow down, Speed Racer.
The Arroyo Rule is in full effect.
If (or when?) there’s an indictment you’ll see/hear a chorus singing about Arroyo and that rule.
Comment by Oswego Willy Friday, Jul 17, 20 @ 12:31 pm
somebody rent a plane. ” resign Mike” resign from all your positions. you have enough money. just go away.
Comment by Amalia Friday, Jul 17, 20 @ 1:06 pm
Who are Associates 1 and 2, I want to know. If they did nothing for ComEd, then … yeah … not good.
Comment by ZC Friday, Jul 17, 20 @ 1:12 pm
LP I’m sure you believe there’s a coherent thought in your post, but there isn’t.
The fact remains that the one item your boss agreed with Madigan on was throwing money at an extremely profitable monopoly, that was likely engaged in these shenanigans at the time.
And for the record I hope this brings Madigan down.
Comment by Excitable Boy Friday, Jul 17, 20 @ 1:28 pm
I have always believed that Madigan would leave via one of two options.
The first was death. He would maintain his position until his dying days as leaving would allow all the skeletons out into the light and that would be bad.
The second was via prosecution but thought that was a long shot given his long history.
If convicted, he needs to go away for a long time. He should resign now, but I would be stunned if he did.
=The arrogance of the Illinois Democratic party summed up in a phrase=
It takes a tremendous amount of gall to call out Madigan when you toady to the likes of all things Trump.
Comment by JS Mill Friday, Jul 17, 20 @ 1:33 pm
@Illnois Pundet - 100% spot on. Its sad for me but yeah the Speaker really needs to go
Comment by low level Friday, Jul 17, 20 @ 1:54 pm