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Jury hears opening arguments in federal ComEd bribery trial

The “ComEd Four" are accused of working with former Illinois House Speaker Mike Madigan to help pass state laws benefiting the electric utility’s bottom line.

CHICAGO (CN) — Attorneys on Wednesday read opening arguments in the trial of the so-called "ComEd Four," four powerful individuals who prosecutors say were in on energy company Commonwealth Edison's admitted yearslong bribery scheme in the Illinois Legislature. The opening statements began following a full day of jury selection on Tuesday.

The four defendants are ex-ComEd CEO Anne Pramaggiore, ex-ComEd executive John Hooker, former ComEd lobbyist Michael McClain and former City Club of Chicago President Jay Doherty, who also performed consulting work for ComEd. They face nine conspiracy, fraud and securities violations charges between them for their alleged involvement in the electric company's attempts to influence state lawmakers between 2011 and 2019. ComEd admitted to the bribery plot in 2020 in exchange for a $200 million fine and a deferred prosecution agreement.

Though he is not named as a defendant in the case, the shadow of former Illinois House Speaker Mike Madigan hangs over the entire trial. Federal prosecutors indicted all of the ComEd Four in 2020 due to their connections to Madigan, the scion of a Democratic Chicago political dynasty who allegedly led the effort to get ComEd-backed laws passed in exchange for favors, jobs and payouts.

Madigan, who resigned as House Speaker in 2021, has his own upcoming criminal trial in federal court, facing 23 charges of conspiracy, fraud, bribery and racketeering. He and ComEd were also named as co-defendants in a 2020 class action over the bribery scheme, though U.S. District Judge Jorge Alonso, a Barack Obama appointee, tossed that case the following year.

At the center of the charges against Pramaggiore, Hooker, McClain and Doherty are two separate pieces of legislation: the 2011 Energy Infrastructure and Modernization Act, also known as the Smart Grid Act, and the 2016 Future Energy Jobs Act.

The Smart Grid Act’s official purpose was to modernize the state’s energy grid with digital “smart meters,” but it also allowed private utilities like ComEd to raise electric rates as they saw fit. The rates are subject to review by the Illinois Commerce Commission, but only after the utility has already sent the bill.

The Future Energy Jobs Act was a wide-ranging overhaul of Illinois' energy regulatory process. It included provisions for extending energy efficiency programs, in which ComEd had a stake as Illinois' largest energy utility. It also ensured that two Illinois nuclear plants, operated by ComEd parent company Exelon, would stay open.

ComEd reported consistently high-earning years between 2013 and 2019 after both state laws took effect, turning over $3 billion in profits. But according to a 111-page report published in 2020 by the independent nonprofit Illinois Public Interest Research Group, very few Illinoisans have actually seen the improvements ComEd promised would come with their energy modernization and efficiency plans.

Prosecutors from the office of Northern Illinois U.S. Attorney John Lausch claim Madigan ensured both laws - as well as a favorable 2013 revision to the Smart Grid Act - were passed in exchange for the four defendants' unscrupulous favors.

Those favors included arranging jobs for Madigan's political lieutenants in Chicago's 13th Ward, the former House Speaker's political base. It also involved placing Madigan ally Juan Ochoa on the ComEd board, and directing the company's legal work to his friend Victor Reyes' law firm Reyes Kurson. To hide their tracks, prosecutors also alleged that the ComEd Four set up bogus contracts with third-party vendors through which to send payments to Madigan and his allies.

"It was... part of the conspiracy that the conspirators caused third-party intermediaries to enter into false contracts, to submit false invoices for payment, and further caused the creation and retention of other false documents and records within Exelon, ComEd and Exelon Business Services that made it falsely appear that payments intended for third-party intermediaries were solely for legitimate services to be rendered or actually rendered by the third-party intermediaries," the 2020 indictment claims. "When in fact, the contracts, invoices and internal documentation were intended to disguise the fact that a substantial amount of the payments to the third-party intermediaries was intended for [Madigan]'s associates, who performed little or no work for ComEd."

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Assistant U.S. Attorney Sarah Streicker argued all four of the defendants played a different role in making sure Madigan stayed amenable to ComEd's legislative agenda.

McClain, for example, allegedly acted as a "double agent" working as an intermediary between ComEd and Madigan, whom McClain referred to in emails as "our friend." Streicker noted that McClain did not own a cellphone for much of the time when the alleged bribery scheme was underway, meaning that "When McClain told you something, you knew it was coming from Madigan," she said.

Streicker further accused Pramaggiore of spearheading the passage of the Smart Grid Act and Future Energy Jobs Act, noting that the ex-CEO credited her ascension to ComEd's chief office to McClain, Hooker and Madigan - three men she referred to as her "spirit guides." Hooker's role was to cover ComEd's tracks in creating bogus job contracts for Madigan's allies, while Doherty was the intermediary through which the money in those contracts flowed to various subcontractors who did little or no actual work, according to the prosecutor.

She said two of those subcontractors were Ray Nice and Ed Moody - longtime precinct captains in the 13th Ward who worked to whip votes for Madigan and his allies during election seasons.

"Madigan wanted, the defendants gave, and the defendants got," Streicker said. "It's that simple."

Attorneys for the defendants, conversely, argued that their client's actions never rose above the level of legal lobbying and proactive corporate leadership.

"You want a law passed, because you think it will help your business? You're allowed to do that... That's all lobbying is. It's the right of the citizen to go to their elected representative and request help," McClain's attorney Patrick Cotter said of McClain's actions.

Cotter further suggested that US attorneys' "tunnel vision" in building a bribery case against Madigan is what led to the Four's indictment. He argued that instead of bribery, it was only hard work and garden variety political self-interest that bouyed the laws ComEd supported. He compared McClain's decadeslong relationship with Madigan to an employee getting coffee for their boss in the mornings, which may curry favor but would not rise to the level of bribery.

"If six months down the line... you get a raise or a promotion from the manager you got the coffee for... You got that promotion because you worked your butt off, not because you got that coffee," Cotter said.

Cotter and Pramaggiore's attorney Scott Lassar also pointed out that the Smart Grid Act and Future Energy Jobs Act were backed by labor unions, environmentalist groups like the Sierra Club, and the state legislature's Black Caucus.

"Both those bills were powerfully in the public interest... ComEd made those arguments when they met with public legislators, and they had good arguments to make," Lassar said.

Lassar went even further than Cotter, arguing his client was "a girl scout" who had nothing to do with Madigan at all; never even mentioned him by name in calls or emails. He further claimed he "could just sit back and do nothing" because the government's case is so weak. But, he added, "the stakes here are far too high for us to just sit back."

The trial is expected to stretch on for two months. If convicted on any of the charges, the defendants could face years in prison.

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Categories / Business, Criminal, Government, Politics, Trials

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