AT&T Illinois has agreed to pay a $23 million fine as part of a federal criminal investigation into the company’s illegal efforts to influence former House Speaker Michael Madigan, court records made public Friday show.
Federal prosecutors Friday also unsealed a superseding indictment against Madigan and his longtime confidant, Michael McClain, adding allegations about the AT&T Illinois scheme.
Also charged as part of the investigation was Paul La Schiazza, the former president of AT&T Illinois, who was accused of conspiring with Madigan and his longtime confidante, Michael McClain.
La Schiazza, 65, of Newport, Rhode Island, is charged with conspiracy, corruptly giving something of value to reward a public official, and three counts of using a facility in interstate commerce to promote unlawful activity. His attorney could not immediately be reached.
The investigation of AT&T Illinois, which was previously reported by the Tribune earlier this year, is being resolved with a deferred prosecution agreement under which the company admitted it arranged for payments to be made to an ally of Madigan to influence the powerful speaker’s efforts to assist with legislation sought by the company in Springfield.
In exchange for admitting guilt and paying a $23 million fine, the charge will be dropped by the U.S. Attorney’s Office in two years, according to the paperwork filed Friday in U.S. District Court.
AT&T has previously acknowledged it was under scrutiny by the U.S. attorney’s office as part of the investigation into Madigan’s political operation.
After the charges were announced Friday, AT&T released a statement, saying, “We hold ourselves and our contractors to the highest ethical standards. We are committed to ensuring that this never happens again.”
Arraignment dates for both AT&T Illinois and La Schiazza had not been set as of Friday morning. Madigan and McClain will also be arraigned on the superseding indictment at a later date.
In February, AT&T disclosed in a regulatory filing that federal prosecutors had notified them they were considering filing criminal charges against its Illinois subsidiary, formally known as Illinois Bell Telephone Co. LLC, involving “a single, nine-month consulting contract in 2017″ worth $22,500.
State records show the company that year had hired a stable of Madigan-connected lobbyists working for the Illinois subsidiary as AT&T was fighting for a controversial bill to end landline service.
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The Tribune reported that investigators were specifically looking at thousands of dollars in payments allegedly passed to former state Rep. Edward Acevedo, a onetime member of Madigan’s leadership team who’d recently left the General Assembly.
The payments to Acevedo were made via a lobbying contract between AT&T and Thomas Cullen, a former Madigan staffer and longtime political strategist aligned with the speaker, two sources told the newspaper.
Acevedo was a registered lobbyist at the time, state records show, but not for AT&T, and the sources said the amount of work Acevedo actually did for AT&T is in question.
Acevedo was not named in a statement of facts included in the deferred prosecution agreement filed Friday, but the facts and circumstances described in the charges all match was what previously known and sources said he was indeed the Madigan associate who received the payments.
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According to the charges unveiled Friday, in 2015, after Madigan’s office had blocked landline legislation that AT&T wanted, an executive circulated a “lessons learned” memo that contained one section headed, “Speaker Madigan.”
The memo stated that AT&T had not been as “helpful” as utility giant Commonwealth Edison when “requests” were made from the speaker’s camp, according to the charges.
The scheme to reward Acevedo, referred to in the court papers as “FR-1,” began in February 2017, after the company learned through McClain that the speaker was looking to kick Acevedo some money, according to the charges.
In an email exchange that March, an AT&T executive asked if they were “100% certain” they would get credit “from the powers that be” if the payments were made to Madigan’s associate.
“I would hope that as long as we explain the approach to McClain and (the associate) gets the money then the ultimate objective is reached,” another executive wrote back, according to the agreement.
The first executive responded, “I don’t think (La Schiazza) wants this based on hope. We need to confirm prior to executing this strategy,” the agreement stated.
jmeisner@chicagotribune.com
