ComEd ‘Shadow Lobbying’ Portfolio Filled With Clouted Contractors, HiresBy Dave McKinney, Tony Arnold
ComEd ‘Shadow Lobbying’ Portfolio Filled With Clouted Contractors, HiresBy Dave McKinney, Tony Arnold
Before his offices were raided by the FBI last spring, lobbyist and Chicago public affairs impresario Jay Doherty was paid more than $3.1 million by Commonwealth Edison — vastly more than he had previously disclosed, federal records show.
Doherty is among dozens of clout-heavy contractors the utility employed to build a dominant political influencing machine, powered by ratepayer dollars from its more than 4 million customers across northern Illinois.
ComEd’s lobbying and contracting practices are now central to a wide-ranging federal criminal investigation into whether the power company hired politically connected employees and contractors in exchange for favorable government actions, including rate hikes.
Up until now, it’s been difficult to know which outside people and firms ComEd hires because the private sector company is not subject to open-records laws that apply to taxpayer-funded agencies.
But a WBEZ analysis of federal regulatory filings found dozens of companies and individuals who’ve been on ComEd’s payroll and are connected to political A-listers like House Speaker Michael Madigan and indicted Chicago Ald. Ed Burke.
The contractors range from business consultants to law firms to a power-washing company and even to a former Illinois first lady. Several have ties to key figures in the ongoing federal probe.
Those disclosures — buried within company filings with federal regulators — offer a revealing glimpse into how the state’s biggest utility monopoly worked to win friends and build influence in Springfield while pressing state officials and lawmakers for hundreds of millions of dollars in ratepayer bailouts.
Told of WBEZ’s findings, one nationally prominent consumer watchdog characterized ComEd’s hiring of clout-heavy contractors and lawmakers’ family members as a form of “shadow lobbying” — an activity that could cross the line into criminality if any official state actions resulted.
There’s no evidence that ComEd or its current and former employees engaged in any criminal wrongdoing. No one has been charged in connection with the company’s lobbying or its use of insider contractors, some of whom have reaped millions of dollars in payments.
For example, the previously unreported records show ComEd paid Jay D. Doherty and Associates $3,104,250 between 2011 and 2018. That amount is almost six times greater than the roughly $530,000 he disclosed being paid by ComEd in lobbyist disclosures filed with the city of Chicago. In federal filings, ComEd vaguely listed Doherty’s work only as “business consulting.”
Doherty is president of the City Club of Chicago, a public affairs club that regularly hosts a who’s-who of national and Illinois political luminaries. In May, federal agents raided Doherty’s City Club office suite in the Wrigley Building as part of the probe related to ComEd’s hiring practices. A source involved in the investigation has told WBEZ that investigators were looking for evidence related to ComEd. A subpoena delivered to the organization sought records involving Illinois House Speaker Michael Madigan and others.
Doherty, who has not been charged with criminal wrongdoing, terminated his lobbying relationship with ComEd on Monday, state records show. He has not returned messages left by WBEZ nor has his lawyer.
WBEZ has reported that investigators are looking into whether Doherty served as a “pass through” for ComEd’s under-the-radar deals with politically connected individuals and companies, some of whom are suspected of doing little or no work.
Contracts for lawmakers’ allies
Other ComEd contractors and hires uncovered by WBEZ also have ties to lawmakers, including at least one officeholder caught up in the federal probe of ComEd.
In 2017, the utility paid more than $277,000 to a Chicago company called Power Washing Pros. State records show the firm was led by a former campaign worker for Democratic state Sen. Martin Sandoval, whose statehouse office and home were raided by federal agents in late September. Investigators sought information on ComEd, parent company Exelon, four unidentified Exelon officials and “any issue supported by any of those businesses or individuals, including but not limited to rate increases.”
State records show Power Washing Pros is owned by Rudolph Acosta, Sr., a one-time precinct captain in Ald. Burke’s 14th Ward whose ties to Sandoval go back years.
The Chicago Sun-Times has reported that Acosta’s one-time Archer Heights home played host to five students to whom Sandoval once offered legislative scholarships as part of a now-disbanded program that let lawmakers offer students in their legislative districts free tuition at public universities in Illinois. Several of those students came from outside Sandoval’s district but used Acosta’s home address to claim in-district residency, including the son of reputed mobster Michael C. “Jaws” Giorango.
The State Board of Education turned Sandoval’s legislative scholarship records over to the FBI for investigation in 2011, but no charges were ever filed.
WBEZ’s attempts to reach Acosta were unsuccessful.
At least two legislative veterans also have relatives who work for Comed. WBEZ previously has reported that Sandoval’s daughter works for the utility.
And it also employs the daughter-in-law of former state Rep. Luis Arroyo, D-Chicago, who resigned last week after being charged in a federal bribery case involving an alleged payoff offer to an unidentified state senator. Desiree Arroyo, wife of Cook County Commissioner Luis Arroyo, Jr., D-Chicago, is a senior marketing specialist for ComEd, a company spokeswoman confirmed.
Another ComEd contractor, Chicago-based Industrial Fence, has ties to former Rep. Arroyo, Sandoval and Chicago Ald. Gilbert Villegas Jr., 36th Ward. The company was paid more than $764,000 in 2017 and 2018, according to federal records.
All three lawmakers sprung to the company’s defense after Industrial Fence lost out on a $6.7 million contract it had been pursuing with the Illinois Tollway.
In September 2016, the tollway board had already rejected that deal, only to have the three elected officials show up to protest the tollway’s snub of Industrial Fence, as first reported by the Daily Herald. After the trio laid into the tollway, the agency reversed course and awarded Industrial Fence a $5.7 million deal four months later. In the past three years, Industrial Fence has won contracts with the Tollway and the Illinois Department of Transportation worth a combined total of $21.9 million, state records show.
Industrial Fence donated nearly $13,000 to Sandoval’s campaign fund, more than $7,700 to funds controlled by Arroyo and $4,000 to Villegas’ political committee, state records show.
The company did not respond to WBEZ’s request for comment.
WBEZ reported last week that Villegas’ lobbying firm, Stratagem Consulting Group, had a $5,000-a-month contract with ComEd until last month, when the utility terminated the deal as the federal investigation into its lobbying activities intensified.
Another Stratagem lobbying client is Primera Engineers, which ComEd paid nearly $67 million for engineering and technical consulting between 2008 and 2018, the utility’s filings show. Primera and its executives have made more than $521,000 in campaign contributions, with $17,000 going to former Rep. Arroyo and nearly $15,000 going to Sandoval, state records show.
Primera’s President and CEO, Erin Inman, told WBEZ no one at her company has been in contact with federal investigators. She said Primera’s contract with ComEd is competitively bid every three years against roughly 200 other firms.
Both ComEd and Villegas, who is Chicago Mayor Lori Lightfoot’s City Council floor leader, have denied that the alderman did any lobbying on behalf of the utility. But Villegas acknowledged profiting from the deal. Villegas told WBEZ he no longer will participate in any matters involving ComEd at City Hall.
Donors get big ComEd deals
ComEd filings with federal regulators analyzed by WBEZ show dozens of other clouted entities on the utility’s payroll.
Quantum Crossings, paid $22.6 million by ComEd for facilities management and security since the start of 2010, is chaired by Tom Donovan. He’s the former patronage chief to Mayor Richard J. Daley, ex-CEO of the Chicago Board of Trade and a prolific campaign donor to Democratic officeholders.
State records show Quantum has contributed more than $283,000 to an array of Illinois political funds. Both Donovan and his firm have steered more than $87,000 in donations to campaign funds controlled by the House speaker and $67,000 to funds overseen by Burke, whose former law firm handled property tax appeals for ComEd for years.
Donovan also is a close associate of Doherty, often sitting at the head table at the City Club of Chicago’s luncheons.
Quantum Crossings President and CEO Roger Martinez told WBEZ that nobody at the company has been in contact with federal agents.
“We haven’t been contacted by anyone about anything,” Martinez said.
Other ComEd contractors outlined in its federal filings include Chicago-based United Security Services, Inc., a facilities-management company owned by janitorial mogul Richard Simon. The utility company paid the firm more than $1.4 million between 2014 and 2016, federal records show.
Simon and firms that are associated with him are major campaign donors, making more than $258,000 in political contributions. Almost a quarter of that total, $61,000, went to political committees affiliated with Ald. Burke, state records show.
Simon was in business with an alleged organized-crime figure and employed another man who went to prison after being indicted with the late mob boss Antonio “Big Tuna” Accardo, the Chicago Sun-Times has reported.
Simon also snubbed a grand jury probing the disappearance of a “close female friend and companion” of his mentor and longtime boss, janitorial kingpin and corruption convict Ben Stein, the Sun-Times reported.
A spokesperson for United Security Services said the company won a competitively-bid three-year contract to provide guards at various ComEd locations, and that the company does not currently have a contract with ComEd.
“We have no comment with regard to Mr. Simon,” the spokesperson said in a statement.
Other politically-connected entities hired by ComEd include:
The public-relations firm owned by Jayne Thompson, wife of former Illinois Gov. James Thompson. Records show ComEd spent more than $555,000 in 2012 and 2013 for advertising, marketing and business consulting services. Thompson did not return WBEZ’s call for comment.
Meade Electric, which ComEd paid $851.3 million over 10 years for “distribution construction” and “operational staff augmentation.” The company and its executives gave more than $215,000 to dozens of politicians, with almost a quarter of that amount going to Burke. Meade Electric did not return WBEZ’s call seeking comment.
The nonprofit After School Matters charity founded by former Chicago first lady Maggie Daley, which ComEd paid $806,778 over three years for “advertising and marketing.” After School Matters did not return WBEZ’s call seeking comment.
ComEd’s vast network of politically-tied contracts also ran a broad swath through Chicago’s legal community.
Among them is Klafter & Burke, the former law firm of indicted Ald. Ed Burke, which counted the utility among its biggest clients and helped it win nearly $4.3 million in property tax refunds since 2009. Records show that ComEd paid the firm $266,105 in 2014 for “business consulting.” WBEZ has reported ComEd paid the firm $102,000 in 2018.
Shortly before he was named in a 14-count federal racketeering and bribery indictment last May, Burke disassociated himself from the firm.
Klafter & Burke did not respond to a request for comment.
ComEd has also hired the law firms of Langdon Neal, the former leader of the Chicago Board of Election Commissioners; former Chicago mayoral candidate Gery Chico; and former House Republican Leader Tom Cross.
Utility watchdog: “This is shadow lobbying”
The practice of embedding clout-heavy contractors and hires on the company’s payroll offers a way to gain legislative favors outside of public scrutiny. It’s a small investment with potential to pay huge gains if the utility runs the legislative table in Springfield, as it has in years past.
But one nationally-prominent utility industry watchdog says that’s wrong — and possibly criminal.
“This is a shadow lobbying, in essence,” said Jamie Court, president of Los Angeles-based Consumer Watchdog, a nonpartisan, nonprofit consumer rights advocacy group that has researched public utility lobbying.
“It’s a shadow nepotism. It’s a shadow favoritism. And what the utility companies typically have done is hire lawyers who tell them it’s OK,” Court said.
“[I]f a public decision is being made and a relative is being paid only to make that decision possible, or if someone is getting something else of value, then it becomes something that potentially falls into an area of criminal prosecution,” he said.
Medina declined to answer why ComEd employed so many clout-heavy people and companies or to what extent, if any, public officeholders made a habit of advocating on behalf of those entities with the company.
Spokeswoman Jean Medina also declined to say whether ComEd has internal protocols that dictate the company’s response if a legislator or other public officeholder asks it to hire a favored contractor or individual.
“We regularly review our lobbying needs, and make adjustments as necessary, as reflected in our filings,” Medina said in a statement, alluding to the regulatory documents reviewed by WBEZ.
Ethics statements that Illinois lawmakers are required to file annually with the state do not explicitly ask whether legislators have any family members employed at utility companies, which are state-regulated, or whether they have undertaken any efforts to sway whom the utility hires.
Court, the utility watchdog, said that constitutes a major hole in state disclosure laws that the General Assembly should fix if it intends to undertake any serious ethics reforms as more details surrounding the ComEd probe emerge.
“The problem is the legislature is the same people who are engulfed in the scandal, so they’re not likely to write the new laws,” he said.
Dave McKinney and Tony Arnold cover state politics for WBEZ. Investigative Reporter Dan Mihalopoulos and Data Editor Elliott Ramos contributed.
Editor’s note: ComEd is a WBEZ underwriter. And in the interest of transparency, WBEZ obtained documents showing hundreds of companies that Commonwealth Edison contracted with from 2008 to 2018. Among these are entities that had or have financial or personal connections with Chicago Public Media or employee family members. These are Adelstein Liston LLC, Drinker Biddle & Reath LLP, Foley & Lardner, Grisko LLC, Jenner & Block and Lock Lord LLP. WBEZ has taken great care to ensure that none of those relationships have any influence on our reporting.