Staring down possible bankruptcy in 2011, Commonwealth Edison desperately needed legislation in Springfield to help it survive, the utility giant’s former chief legal officer testified Monday, and in order to do that, the company knew it needed one man’s support more than any other: Michael Madigan.
Testimony resumed Monday in the fourth week of the former Illinois House speaker’s corruption trial inside Chicago’s Dirksen Federal Building. Madigan, 82, and his longtime confidant Michael McClain, 77, are charged with racketeering, bribery and wire fraud. They have each pleaded not guilty.
The former House speaker is alleged to have orchestrated multiple corruption schemes, wielding his significant political power to reward loyal allies and enrich himself.
The most substantial of those alleged schemes involved utility giant ComEd as prosecutors have claimed Madigan and McClain arranged subcontractor jobs for several of the speaker’s “political cronies” with the company.
In exchange, according to the government, Madigan gave his sign-off on critical legislation in Springfield that benefitted ComEd. Already McClain and three other ComEd officials — Anne Pramaggiore, John Hooker and Jay Doherty — have been convicted of conspiring to bribe Madigan.
Thomas O’Neill, ComEd’s former general counsel, testified Monday that when he took over that role in 2010, the utility company was in a “precarious” state, noting that there had been concerns raised about its financial viability and possible bankruptcy.
A year later, the Illinois legislature passed the Smart Grid bill, which codified the formula rate for ComEd, with Madigan’s support. According to O’Neill, this bill also allowed the company to invest large sums of money to improve its infrastructure.
“It allowed us to focus on running the company instead of trying to litigate,” he testified. “Your grid functions much better today than it did a decade ago because of that piece of legislation.”
After that legislation passed, O’Neill said, ComEd no longer had any fears of bankruptcy.
O’Neill testified that while working on that bill, both Hooker and McClain told him that they had a relationship with Madigan and that, if they could secure the necessary legislative votes for Smart Grid, then “the speaker will run this bill.”
Jurors saw a December 2010 email from then-ComEd CEO Frank Clark who wrote that Madigan had informed Hooker “to put the formula rate proposal in bill format, (and) that he would take it up in January.”
“While this is short of any firm commitment from the speaker,” Clark wrote in the email, “it is about as good as we can expect to get from him.”
Asked what he thought this email meant for the bill, O’Neill testified that “If we were going to have success in Springfield we were going to need the speaker and his staff to understand this.”
The bill itself, O’Neill testified, was largely negotiated inside a conference room in Madigan’s suite of state Capitol offices. It was McClain who helped set that up.
During that process, Madigan’s office insisted on so-called “sunset provisions” that would ensure the legislative changes the bill would enact would not last forever.
O’Neill said ComEd opposed the inclusion of those, seeing it as a way to force the company to keep coming back for legislative approval, but was informed by the speaker’s office that these were “non-negotiable.”
“No sunset, no bill,” he testified.
O’Neill testified that Pramaggiore, who became ComEd CEO in 2012 and continued in that role until 2018, had stressed to him the importance of keeping a good relationship with Madigan.
“What’s important to the speaker is important to ComEd,” O’Neill recalled Pramaggiore telling him.
Scott Vogt, a high-ranking ComEd executive, testified last week about just how crucial another piece of legislation that McClain and others worked to pass was to the company — the Future Energy Jobs Act in late 2016.
“It’s hard to quantify exactly how important that was,” he said, noting the bill helped improve ComEd’s financial stability “substantially.”
A year after that bill, known as FEJA, was passed, McClain sent an email to Vogt, Pramaggiore and other ComEd leaders stating “You should all take great pride in it! It is historic!!!!!”
During his testimony, Vogt didn’t recognize photos of Ray Nice, Ed Moody and former Chicago Alds. Frank Olivo and Michael Zalewski — the four Madigan associates ComEd is accused of hiring for subcontractor jobs — as having ever done any ComEd lobbying work in Springfield.
Madigan’s defense team tried to make clear that the legislation wasn’t only good for ComEd, but that it was also beneficial for Illinois residents and workers — something ComEd lobbied Madigan about when trying to get those bills passed.
“Those were important selling points for you, right?” Madigan attorney Dan Collins asked Vogt last week.
“Yes,” Vogt replied.
Prosecutors have also alleged Madigan and McClain convinced ComEd to retain the law firm of Reyes Kurson because one of its partners, Victor Reyes, was “particularly valuable to Madigan’s political operation.”
O’Neill testified that ComEd’s contract with Reyes Kurson was “atypical” because it set out a specific amount of hours — 850 hours per year — while most other contracts had no such detail.
O’Neill, who was in charge of approving that contract, told jurors he was “uncomfortable” with that stipulation back in 2011, but was pressured by both McClain and Hooker — neither of whom were actually involved with ComEd’s legal department — to get that contract finalized.
“(McClain) communicated to me that this was a matter that was important to the speaker of the House,” O’Neill testified.
When it came time to renew that contract in 2016, O’Neill sought to reduce the number of billable hours guaranteed to Reyes Kurson due to a lack of available work, but McClain emailed Pramaggiore to complain.
“I know the drill and so do you,” McClain wrote in the Jan. 20, 2016, email. “If you do not get involved and resolve this issue of 850 hours for his firm then (Reyes) will go to our Friend. Our Friend will call me and then I will call you. Is this a drill we must go through?”
O’Neill testified that the “friend” McClain was referring to in that email was indeed Madigan.
Shortly after receiving that message from McClain, Pramaggiore responded: “Sorry. No one informed me. I am on this.”
Two months later in March 2016, McClain emailed O’Neill stating that although Reyes Kurson acknowledged its hours would be cut, Madigan was asking for an additional 10 hours per month for the law firm, bringing their total in the new contract up from 30 hours per month to 40 hours.
O’Neill said Monday he found it “unusual” at the time that the Illinois House speaker would be concerned about Reyes Kurson’s workload with ComEd.
The contract was eventually finalized later that year with Reyes Kurson getting 40 hours per month, terms O’Neill said were favorable to the law firm more so than ComEd. He said he could’ve killed the contract, but felt pressure both from McClain and Pramaggiore to get the deal done.
Testimony on Monday morning resumed after a nearly hourlong delay following a juror note asking about the potential for an early release Thursday to allow them to go trick-or-treating with their children on Halloween. No parties objected to that request and the sides agreed to end proceedings early that day.
While former state Rep. Bob Rita began his testimony for only a few minutes late last week, he did not return to the witness stand Monday morning. No explanation was provided, but Judge John Blakey told jurors Rita would be taken “out of order.”
“Sometimes that happens,” he said. “Don't worry about that.”