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* UPDATED x2 * Exelon CEO: “A small number of senior ComEd employees and outside contractors orchestrated this misconduct”

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Exelon Corp. and its ComEd subsidiary today announced that ComEd has entered into an agreement with the U.S. Attorney’s Office for the Northern District of Illinois to resolve the previously disclosed investigation into ComEd’s historical lobbying practices in Illinois. The resolution ends the investigation into ComEd by the Department of Justice (DOJ).

Exelon CEO Christopher M. Crane said, “We are committed to maintaining the highest standards of integrity and ethical behavior. In the past, some of ComEd’s lobbying practices and interactions with public officials did not live up to that commitment. When we learned about the inappropriate conduct, we acted swiftly to investigate. We concluded from the investigation that a small number of senior ComEd employees and outside contractors orchestrated this misconduct, and they no longer work for the company. Since then, we have taken robust action to aggressively identify and address deficiencies, including enhancing our compliance governance and our lobbying policies to prevent this type of conduct. We apologize for the past conduct that didn’t live up to our own values, and we will ensure this cannot happen again.”

Under the three-year deferred prosecution agreement, ComEd has agreed to make payments totaling $200 million, and has agreed to the government’s filing of a single charge that will be dismissed at the end of the three-year term, provided it abides by all terms of the agreement. The fine will not be recovered in rates or charged to customers. The conduct at issue in the agreement relates only to ComEd, and the agreement does not contain any allegation of misconduct by Exelon or Exelon Generation. The agreement resolves the government’s investigation into both ComEd and Exelon. The related Securities and Exchange Commission investigation and civil lawsuits remain pending.

ComEd fully and substantially cooperated with the U.S. Attorney’s Office from the beginning of the investigation, and since that time, has taken extensive remedial measures. ComEd’s remediation and cooperation efforts were acknowledged specifically by the government in the resolution agreement.

As part of its remediation, Exelon implemented four new mandatory policies that apply to employees who interact with public officials. These policies lay out specific rules, procedures and tracking mechanisms governing 1) interactions with public officials; 2) vetting and monitoring of lobbyists and political consultants; 3) employment referrals or requests from public officials; and 4) vendor referrals or requests from public officials.

The policies also prohibit subcontracting of third-party lobbyists and political consultants, and hiring of such firms includes oversight from the company’s ethics and compliance team, led by David Glockner, Exelon’s executive vice president of Compliance and Audit. Glockner was appointed to his role in March 2020 after having previously served as a senior Securities and Exchange Commission official and chief of the Criminal Division in the U.S. Attorney’s Office for the Northern District of Illinois, among other roles.

In addition, the company is conducting training on the new policies for employees as well as lobbying and political consulting partners. While the misconduct was limited to ComEd, the policies apply across all Exelon subsidiaries in Illinois and all other jurisdictions where Exelon operates, and are available on the company website.

Exelon and its operating companies are dedicated to providing customers and communities with clean, reliable, low-cost energy at the highest levels of service, efficiency and operational performance.

*** UPDATE 1 *** Illinois PIRG Director Abe Scarr…

Today’s filing confirms what we have long suspected and feared: that ComEd and its parent company Exelon’s remarkable public policy success since 2011 was made possible through a corrupt and illegal political influence operation.

It is important to remember that ComEd was in crisis in the decade leading up the passage of the Energy Infrastructure Modernization Act (EIMA) in 2011. Its distribution system suffered from chronic reliability problems stemming from decades of mismanagement. ComEd was in a financially and politically precarious position, threatening bankruptcy. Former Exelon CEO John Roe said Speaker Madigan was, through this time, a “foe.” ComEd’s political and financial fortunes then changed dramatically, starting with the passage of EIMA in 2011.

EIMA, followed by a trailer bill in 2013, radically changed utility regulation in Illinois, guaranteeing utility profits through so-called “formula” rate making, and reducing the Illinois Commerce Commission to a rubber stamp for company profits. Through EIMA and follow up legislation, ComEd’s annual authorized profits have grown by 47 percent between 2011 to 2019, when they reached over $739 million.

While the actions of federal prosecutors may deliver a legal remedy for ComEd’s criminal actions, it will not address the public policy harms this corruption wrought. The Illinois General Assembly must act to right the wrongs of the past decade, including revoking formula rates, reducing utilities’ ability to influence public policy through political contributions, lobbying and rate-payer funded charitable giving, and addressing the damaging conflicts of interest inherent to Exelon’s ownership of ComEd.

*** UPDATE 2 *** Crain’s has the response from a spokesperson for former ComEd CEO Anne Pramaggiore…

“Ms. Pramaggiore has done nothing wrong and any inference to the contrary is misguided and false. The fact is she led a distinguished career at Exelon, helping guide the company to high levels of reliability and record levels of customer satisfaction while implementing successful programs to improve utility infrastructure. 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.”

posted by Rich Miller
Friday, Jul 17, 20 @ 10:39 am

Comments

Hmmm. Why does this remind of a scene in a famous movie?

Renault: Everybody is to leave here immediately! This cafe is closed until further notice. Clear the room, at once!
Rick: How can you close me up? On what grounds?
Renault: I am shocked- shocked- to find that gambling is going on in here!
Croupier: [hands Renault money] Your winnings, sir.
Renault: [to croupier] Oh, thank you very much. [announcing to the room] Everybody out at once!

Comment by Nearly Normal Friday, Jul 17, 20 @ 10:44 am
“I’m shocked, SHOCKED…!”

Comment by NIU Grad Friday, Jul 17, 20 @ 10:49 am
When we learned about the inappropriate conduct, we acted swiftly to investigate. We concluded from the investigation that a small number of senior ComEd employees and outside contractors orchestrated this misconduct, and they no longer work for the company.

“Oh yeah, a buffer. The family had a lot of buffers!”

– MrJM

Comment by @misterjayem Friday, Jul 17, 20 @ 10:57 am
Didn’t Anne Pramaggiore report to Chris Crane? I wonder if the Feds are looking at other states Exelon lobbies in?

Comment by Mayonaise Friday, Jul 17, 20 @ 10:59 am
Shorter– “ComEd regrets its error.”

Comment by Anon y mouse Friday, Jul 17, 20 @ 10:59 am
Uhm, Mr. Crane, there’s the little matter of you filling a board seat with the Madigan designee.

It wasn’t underlings that did that.

Comment by Downstate Friday, Jul 17, 20 @ 11:02 am
“A small number of senior ComEd employees and outside contractors orchestrated this misconduct”

The CEO knew what was going on. That’s not a “small number”.

“The fine will not be recovered in rates or charged to customers.”

It won’t be recovered “directly” but it will be indirectly through future rate formulas and profit targets.

Why is there no internal investigation to ensure no employees/lobbyists connected to the probe remain employed?

Why no mention of cooperation with the feds?

Comment by 1st Ward Friday, Jul 17, 20 @ 11:02 am
Surprised Chris Crane isn’t announcing his resignation. He’s been CEO since 2012. He knew what was going on and if he didn’t (which is highly unlikely), than he is a bad CEO.

Comment by Chicagonk Friday, Jul 17, 20 @ 11:03 am
“We got caught, we’re sorry we got caught, we’ll avoid doing what we got caught doing for a while, and when we start doing it again we’ll try harder not to get caught.”

Comment by CEA Friday, Jul 17, 20 @ 11:03 am
If people believe this statement, then they’re obviously also buyers of bridges to nowhere.

JB is being handed another mega-crisis - one which will almost certainly define his tenure as much as COVID-19, and that’s saying something.

Comment by dbk Friday, Jul 17, 20 @ 11:09 am
Im not sure the Feds see it the same way Sir

Comment by Hard D Friday, Jul 17, 20 @ 11:11 am
The Governance Committee of ComEd should face scrutiny. Either they knew why they were filling a board seat with only one candidate being proffered, or they were grossly inattentive to not ask why.

Comment by Downstate Friday, Jul 17, 20 @ 11:11 am
In fairness, it’s really hard to get legislative approval for regulated utilities to jack up rates to pay for ill-conceived utility projects and schemes without serious influence peddling.

Comment by 47th Ward Friday, Jul 17, 20 @ 11:11 am
“When we learned about the inappropriate conduct, we acted swiftly to investigate. We concluded from the investigation that a small number of senior ComEd employees and outside contractors orchestrated this misconduct, and they no longer work for the company.”

That dog won’t hunt. That is all.

Comment by Southern Skeptic Friday, Jul 17, 20 @ 11:13 am
Thanks for the Baloney Sandwich Mr. Crane. As a shareholder I would like you to resign today.

Comment by Back to the Future Friday, Jul 17, 20 @ 11:13 am
Ladies and gentlemen, I’ll be brief. The issue here is not whether ComEd broke a few rules, or took a few liberties with legislative leaders—we did. But you can’t hold a whole utility responsible for the behavior of a few, sick perverted individuals. For if you do, then shouldn’t we blame the whole regulatory system? And if the whole regulatory system is guilty, then isn’t this an indictment of our legislative institutions in general? I put it to you: isn’t this an indictment of our entire American society? Well, you can do what you want to us, but we’re not going to sit here and listen to you badmouth the United States of America.

Comment by 47th Ward Friday, Jul 17, 20 @ 11:13 am
47th Ward
That was a good one and a great summation of Mr. Crane’s press release.
Hopefully the SEC will walk him out the door if he doesn’t resign.

Comment by Back to the Future Friday, Jul 17, 20 @ 11:19 am
- 47th Ward -

I thought you were Pre-Med?

:)

To the post,

Yikes.

I’ve been trying to read if this helps or hurts or really looks like a group trying to yell “all is well” during a parade gone wrong, if I can keep the theme rolling…

… the reality is that so much of what we are going to read moving forward will be learned by how the connections worked, not as much as the obvious end results.

Lobbying isn’t the crime.

How you go about your business within a structure you want seen as lobbying is where the gray becomes the criminal.

Comment by Oswego Willy Friday, Jul 17, 20 @ 11:19 am
47th Ward - I hope you dropped the microphone when you were done typing.

Comment by Keyrock Friday, Jul 17, 20 @ 11:25 am
Nothing to see here , move on

Comment by Curious George Friday, Jul 17, 20 @ 11:26 am
=The CEO knew what was going on. That’s not a “small number”.=

Well in their defense Com Ed only had 1 CEO so that’s a small number. But aren’t “senior employees” by definition a small number? It’s like saying the corruption was only at the top of our organization.

Comment by Pundent Friday, Jul 17, 20 @ 11:28 am
@Pundent. Their internship program was corrupt, the Board of Directors was corrupt, the lobbying was corrupt. “small number” c’mon. This can’t be defended. Where are the individual indictments.

Comment by 1st Ward Friday, Jul 17, 20 @ 11:35 am
It’s hard to even keep up with Rich’s posts today and process them. But without question its going to be a very busy day and stressful weekend for PR flacks and crisis management teams across several Chicago area companies and government entities. Show us your best stuff, pros. You’re going to need your A game.

Comment by Responsa Friday, Jul 17, 20 @ 11:36 am
In the meantime, we’re going to be asking for a rate increase.

Comment by Siualum Friday, Jul 17, 20 @ 11:42 am
=This can’t be defended.= I wasn’t defending it I was mocking it. Take a breath. It’s way to early to get yourself winded. There’s obviously more to come.

Comment by Pundent Friday, Jul 17, 20 @ 11:43 am
Siualum - actually, they asked for a rate decrease of $11.5 million this year.
https://www.icc.illinois.gov/docket/P2020-0393

They’ll have no problem covering this fine. But it won’t go through rates and they do not need a rate increase to finance it.

Comment by Notorious RBG Friday, Jul 17, 20 @ 12:00 pm
Poor Chris Crane. He should contact that one employee in HR for the Washington Red____s football team.

Neither one knew what was going on in their organization.

Comment by don the legend Friday, Jul 17, 20 @ 12:01 pm
“Shorter– “ComEd regrets it got caught.”

Fixed it for ya.

Took me a while to catch the Animal House reference. That was good.

Comment by Huh? Friday, Jul 17, 20 @ 12:13 pm
Will they look into the former ICC board that tried to sneak in the the Nextgrid legislation? https://www.businesswire.com/news/home/20200424005448/en/Illinois-Commerce-Commission-Settles-Open-Meetings-Lawsuit

Comment by Frank talks Friday, Jul 17, 20 @ 12:26 pm
“ In addition, the company is conducting training on the new policies for employees as well as lobbying and political consulting partners. ”

Ah. So their employees will have an online course which they will have to take each year. The questions will be something like this;

“A legislative leader asks you to hire one of his people, and strongly hints your bill has a better chance of passage if you hire him. Should you hire him? Press 1 for yes, 2 for no”

Comment by low level Friday, Jul 17, 20 @ 12:26 pm
What a crock of caca from ComEd. If only ordinary people could write off crimes against the state with their checkbooks.

Comment by Sonny Friday, Jul 17, 20 @ 12:30 pm
It looks like Zalewski got a “no work” gig from ComEd but yet his daughter-in-law still runs the ICC that regulates ComEd?????

Comment by dying HDO Friday, Jul 17, 20 @ 12:34 pm
A lot of people are not sleeping well tonight. ComEd was run as a criminal enterprise. Anyone who thinks this is the end of their troubles is smoking something. A hell of a lot of people got into bed with ComEd and Exelon. Every since one of them now has a target not their backs.

Comment by Southern Skeptic Friday, Jul 17, 20 @ 1:27 pm
At least regarding the nuclear generation subsidies in the “Future Energy Jobs Act,” the benefits of moving the bill through the legislature would have flowed to the Exelon Generation subsidiary of Exelon, rather than to the ComEd (delivery wires) subsidiary. Wouldn’t they? So it is a little curious that the settlement seems to draw a box around ComEd and leaves the rest of the organization alone.

Comment by Ivory-billed Woodpecker Friday, Jul 17, 20 @ 2:18 pm