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AT&T Illinois to pay $23 million to settle corruption probe

Pedestrians walk past an AT&T Inc. store in Chicago, Illinois.

Christopher Dilts | Bloomberg | Getty Images

AT&T Illinois has agreed to pay a $23 million fine to resolve a federal probe into its illegal efforts to influence former Illinois House Speaker Michael Madigan, who also faces new charges for his role in the scheme, prosecutors announced Friday.

Under the agreement, the company admits that it arranged to make payments to an associate of Madigan, who was one of the state’s most powerful political figures at the time, in exchange for Madigan’s help in pushing through legislation favorable to the company, the U.S. attorney’s office in Chicago said in a news release. In what could spell trouble for Madigan, prosecutors also said the company agreed to cooperate with any related investigations.

Madigan’s attorney, Sheldon Zenner, declined to comment when reached by phone.

In a separate release, the U.S. attorney’s office said that Madigan, who was charged in March for his alleged role in a nearly $3 million racketeering bribery scheme, was indicted by a federal grand jury for his role in the AT&T scheme. In a separate indictment unsealed Friday, the company’s former president, Paul La Schiazza, was charged with participating in the conspiracy and other offenses.

Madigan, 80, has had a dramatic fall from power since retiring under pressure last year and ending his run as the longest-serving speaker of a state House of Representatives in modern history. As the Democratic speaker of the solidly Democratic-led Illinois House, Madigan, nicknamed the velvet hammer, wielded immense power. His reward of campaign cash and choice legislative assignments helped let him determine which bills received a hearing and which didn’t.

In March, he was charged in an alleged racketeering bribery scheme involving utility Commonwealth Edison. According to prosecutors, Madigan used his speaker role and various other positions of power to further his alleged criminal enterprise. Those charges were filed after federal prosecutors announced in 2020 that the utility had agreed to pay $200 million and cooperate with an investigators of a years-long bribery scheme. McClain is charged in that case as is a lobbyist, a consultant and a former ComEd CEO.

The allegations against Madigan involving AT&T are similar. In their news release, prosecutors allege that Madigan and his close friend Michael F. McClain, who is also charged in both alleged schemes, “conspired with AT&T Illinois’s then-president to corruptly arrange for $22,500 to be paid at the direction of the company to the Madigan ally.”

According to prosecutors, AT&T admits that in 2017, it arranged for a Madigan ally to receive the payments through a lobbying firm that had done work for the company. Prosecutors contend that arrangement was made to “disguise” why the ally, who didn’t work for the company, was being paid.

On Friday, prosecutors announced that in exchange for agreeing to pay the fine, they suspended their criminal case against AT&T, which alleges that it used an interstate facility to promote legislative misconduct. If, after two years, the company “abides by certain conditions, including continuing to cooperate with any investigation related to the misconduct alleged in the information,” the charges will be dropped.

In a brief statement, AT&T said: “We hold ourselves and our contractors to the highest ethical standards. We are committed to ensuring that this never happens again.”

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