New Madigan Conspiracy Charge Added As AT&T Agrees To Pay $23 Million

CHICAGO — Executives at AT&T Illinois admitted taking part in a corruption scheme with indicted former Illinois House Speaker Mike Madigan and agreed to pay $23 million as part of an agreement with federal prosecutors.

A grand jury also added a 23rd count to Madigan's racketeering and bribery indictment accusing the longtime Democratic Party boss of arranging for AT&T's then-president to funnel a bribe to a Madigan ally through a lobbying firm in 2017.

The phone company admitted putting a Madigan ally on the payroll as a "ghost employee" to ensure the passage of favorable legislation. According to an agreement with prosecutors, the price for bribing the House speaker to pass a law was just $2,500 a month for 10 months.

Paul La Schiazza, 65, the phone company's former president, was charged in a five-count indictment for his alleged role in the scheme, including one count of conspiracy, one count of bribing a public official and three counts of promoting unlawful activity over interstate commerce.

Prosecutors also charged AT&T Illinois with a single count of use of interstate facility to promote an unlawful activity. In response, the company agreed to pay a $23 million fine to the Federal Crime Victims Fund and enter into a deferred prosecution agreement with the Justice Department.

According to the terms of the two-year agreement, AT&T officials also agreed to cooperate with the investigation into its misconduct and to set up a new compliance and ethics program and provide annual reports to the Justice Department regarding its implementation. If the company completes its obligations over the term of the agreement, prosecutors agreed to drop the charge.

AT&T officials admitted the company paid $90,000 to a lobbying firm through January 2018, of which $22,500 was intended for a political ally of Madigan who did no actual work, according to the statement of facts included in the agreement.

At first, the Madigan ally complained the bribe was insufficient, but a top deputy to the speaker gave it the all clear, according to prosecutors.

In an 2017 email, La Schiazza said he had no objection to paying the Madigan ally through an intermediary rather than directly, "as long as you are sure we will get credit and the box checked."

Prosecutors allege that AT&T employees "formulated a pretextual assignment for Madigan’s ally to disguise why the ally was being paid" and never checked to see if the employee ever did any work.

AT&T Illinois officials knew how important Madigan was to its efforts to get lawmakers to relieve the company of its obligation to provide landline telephone service to all Illinois resident — so-called "carrier of last resort" or COLR legislation, according to prosecutors.

After Madigan had blocked such legislation from advancing in 2015, AT&T officials wrote in a "lessons learned" document that they noticed that the speaker was not as helpful to the telephone giant as it was to the power company, according to the agreement.

The contract for AT&T to funnel bribes to the Madigan ally in exchange for legislative support was signed in April 2017, prosecutors said.

In May 2017, the Illinois General Assembly passed a COLR bill, but it was vetoed by Republican Gov. Bruce Rauner. Lawmakers then stuck the provision into a 911 service reauthorization bill, which passed in June 2017 and was also vetoed by Rauner.

But this time both houses overrode the veto, and AT&T company officials got what they wanted — free from their obligation to provide landline service despite concerns it would cut off hundreds of thousands of Illinois residents, especially seniors, who rely on traditional telephones.

ComEd entered into a similar deferred prosecution agreement in 2020 and agreed to pay $200 million.

Four people are awaiting trial on criminal charges related to bribery at the power company — Madigan confidant Michael McClain, former City Club of Chicago President Jay Doherty, former ComEd lobbyist John Hooker, former ComEd CEO Anne Pramaggiore. Their trial is scheduled for March 2023.

Madigan, 80, of Chicago, and McClain, 75, of Quincy, were charged in March in an indictment alleging that they arranged for bribes and corrupt payments involving Commonwealth Edison and Madigan's property tax appeal law firm, Madigan & Getzendanner, that played a role in which bills become law.

Madigan, who is charged with racketeering conspiracy, using interstate facilities in aid of bribery, wire fraud and attempted extortion. McClain, his close associate, faces charges of racketeering conspiracy and counts of using interstate facilities in aid of bribery and wire fraud.

As House speaker, Madigan controlled what legislation made it to the floor of the Illinois General Assembly. And as head of the Illinois Democratic Party, he had a key role in determining which House Democrats received campaign funds and how much.

Madigan's former chief of staff, Tim Mapes, was indicted on May 2021 on charged he lied to a grand jury investigating Madigan. He appeared in court in person for the first time Thursday and is likely to have his trial scheduled after the ComEd defendants.

Mapes, 68, a longtime top deputy to Madigan and executive director of the Illinois Democratic Party, resigned in June 2018 amid harassment allegations, allowing him to keep his six-figure pension despite an inspector general finding that he had a "long history of making inappropriate sexual comments."

While the Madigan ally who received the money in the alleged AT&T bribery scheme was not named in the deferred prosecution agreement, sources identified him as former State Rep. Eddie Acevedo, the Chicago Tribune reported.

Acevedo, a former Chicago police officer and member of Madigan's House leadership team, and his two sons were indicted on tax evasion charges in February 2021. He pleaded guilty in December 2021 and was sentenced in March to six months in prison.

In a statement, Gov. J.B. Pritzker said he appreciated the work of law enforcement and would continue to work to end corruption in Illinois.

"When I ran for office, I made it clear that I would be beholden to no one, and that I would serve the best interests of the people of Illinois. I have upheld that vow. Since I took office, my administration has clear that such abuses will not be tolerated," he said.

AT&T representatives issued a statement following the announcement of the charge and agreement with prosecutors.

"We hold ourselves and our contractors to the highest ethical standards," it said. "We are committed to ensuring that this never happens again."

Related:

• Mike Madigan Indicted On Federal Corruption Charges
• Madigan's Former Chief Of Staff Lied To Grand Jury, Prosecutors Say
• ComEd Bribed Illinois House Speaker Mike Madigan: Prosecutors
• Madigan's Hand-Picked Replacement Resigns After 2 Days On The Job
• Michael Madigan Resigns As Illinois Democratic Party Chairman