On July 17, the U.S. Attorney’s Office for the Northern District of Illinois announced that Commonwealth Edison (ComEd), the largest electric utility in Illinois, had entered into a deferred prosecution agreement (DPA) with the U.S. Attorney’s Office “to resolve a federal criminal investigation into a years-long bribery scheme.” With regard to the DPA, which requires ComEd to pay a $200 million criminal fine, ComEd admitted that “it arranged jobs, vendor subcontracts, and monetary payments associated with those jobs and subcontracts, for various associates of a high-level elected official for the state of Illinois, to influence and reward the official’s efforts to assist ComEd with respect to legislation concerning ComEd and its business.”
As part of the resolution, the U.S. Attorney’s Office filed a one-count information, charging ComEd with bribery concerning programs receiving federal funds. Under the terms of the DPA, it will seek to dismiss the information after three years “if ComEd abides by certain conditions, including continuing to cooperate with ongoing investigations of individuals or other entities related to the conduct described in the bribery charge.”
Both the information and the Statement of Facts in the case identify the “high-level elected official” as “Public Official A.” Without naming him, they further state that Public Official A “is the Speaker of the Illinois House of Representatives.” The Speaker, Michael Madigan, also serves as the boss of the Illinois Democratic Party.
According to the U.S. Attorney’s Office, ComEd admitted that its efforts to influence and reward Madigan
began in or around 2011 and continued through in or around 2019. During that time, the Illinois General Assembly considered bills and passed legislation that had a substantial impact on ComEd’s operations and profitability, including legislation that affected the regulatory process used to determine the electricity rates ComEd charged its customers.
Madigan allegedly “controlled what measures were called for a vote in the Illinois House of Representatives and exerted substantial influence over fellow lawmakers concerning legislation affecting ComEd.” ComEd admitted that it arranged for jobs and vendor subcontracts for Madigan’s political allies and workers “even in instances where those people performed little or no work that they were purportedly hired by ComEd to perform.”
ComEd also admitted that it undertook other efforts to influence and reward Madigan, including by appointing an individual to ComEd’s Board of Directors at Madigan’s request; retaining a particular law firm at Madigan’s request; and “accepting into the company’s internship program a certain amount of students who resided in the Chicago ward where [Madigan] was associated.”
The U.S. Attorney’s Office credited ComEd with having provided “substantial cooperation with the federal investigations.” It noted that under the DPA ComEd “will continue to provide such cooperation until all investigations and prosecutions arising out of the charged conduct are concluded.” ComEd also agreed to enhance its compliance program and provide annual reports to the government regarding remediation and implementation of its compliance measures.
The DPA is subject to approval by the U.S. District Court in Chicago at a future date.
Note: While the investigation into Madigan is still ongoing, corporate ABC compliance officers should take note of this resolution, as it demonstrates the risks to companies that fail to maintain the effectiveness of their ABC compliance programs when addressing state and local corruption. For that reason, they should use the DPA and the specific compliance obligations therein to benchmark their ABC programs.