Exelon Downplays Corruption Probe's Impact, Even As It Reveals SEC Investigation
Updated: 6:16 p.m.
Reeling from a federal investigation into Commonwealth Edison’s lobbying practices, a top Exelon official on Thursday downplayed the impact of the corruption probe and any possible fallout on Wall Street.
“We’re not passing judgment on [whether there] is anything legal or illegal in some of our past practices with contract lobbyists or consultants,” Exelon CEO Chris Crane told analysts during the company’s quarterly earnings call Thursday morning. “I don’t expect [the investigation] will impede our business at all going forward.”
Crane did not acknowledge criminal wrongdoing on behalf of the company or any current or former employees. Reporters were not given the opportunity to ask questions.
But Crane did refer to two subpoenas ComEd has received from federal prosecutors in Chicago. One requested information about the electric utility’s lobbying activities in Illinois. The other asked for records and communications with Illinois State Sen. Martin Sandoval, a Chicago Democrat, and other individuals ComEd did not disclose.
ComEd has summarized the subpoenas in public filings, but it has refused to release complete copies of them.
For the first time, Exelon also revealed in Thursday’s filing that both it and ComEd are the subject of another federal investigation - this one by the Securities and Exchange Commission. The companies were notified of the probe into their lobbying activities on Oct. 22, according to the document.
Sandoval’s statehouse office was raided last month. The search warrant for that raid revealed that federal agents were interested in obtaining documents relating to ComEd, Exelon, four unnamed Exelon officials and “any issue supported by any of those businesses or individuals, including but not limited to rate increases.”
No one has been charged with a crime in connection to the investigation into ComEd’s lobbying activities.
Referring to “a lot of speculation in news articles” about the investigation, Crane said Thursday, “There’s things out there that people are speculating on that — they’re guessing, to say that the best.”
It’s unclear what Crane was referring to, and he did not offer any details or clarification.
Earlier this month, WBEZ was the first to report federal investigators are looking into allegations that ComEd hired multiple politically connected employees and consultants in exchange for favorable government actions, including electricity rate increases.
A source involved in the investigation said authorities believe many of the clout hires at the state’s largest electric utility got paid but did little or no work, and some of them have ties to Illinois House Speaker and state Democratic Party Chairman Michael Madigan of Chicago, who has also been a subject of federal interest. Madigan hasn’t been charged, but has said he believes he is not a target of the probe.
WBEZ also reported that agents investigating those hires are probing the role played by Jay Doherty, a longtime lobbyist for ComEd and president of the City Club of Chicago, the source said. The City Club is a prominent public affairs speaking forum that’s a regular stop for Illinois’ top politicians.
In the midst of the federal probe, ComEd has seen the abrupt departures of three of its top executives this month. Exelon Utilities CEO and President Anne Prammagiore abruptly retired. The lobbying firm of Michael Kasper, a top legal aide and advisor to Madigan, ended its relationship with John Hooker, a lobbyist with decades-long ties to ComEd. And ComEd’s vice president of governmental and external affairs, Fidel Marquez, resigned.
Those departures were hardly acknowledged on Thursday’s call with investors. Crane said he can’t discuss details about the investigation, and stressed that the company is cooperating with federal investigators. He pointed to a special committee that is working with outside attorneys to make internal ethical changes.
In the near term, ComEd faces some major legislative hurdles at both the city and state level.
The electric utility is currently negotiating with the Chicago mayor’s office a new franchise agreement, which is set to expire at the end of next year. That’s an extremely rare event that has significant consequences for what ComEd pays in fees to the city. The last time the city negotiated the franchise agreement with ComEd was in 1992.
ComEd CEO Joe Dominguez said Thursday he is “pleased” with the progress of negotiations the utility has had so far with Mayor Lori Lightfoot’s administration.
The company also dropped a noteworthy threat during the call: that Exelon may close four of its Illinois nuclear power plants without action from state legislators in Springfield.
Crane suggested some of the plants would “begin to shut down” if Illinois lawmakers do not pass legislation to support them when they return to Springfield in 2020.
If those plants were to shut down, Crane estimated Illinois consumers would pay $483 million more in electricity each year.
A spokeswoman for Democratic Illinois Gov. JB Pritzker did not mince words in response to Crane’s comments about what it wanted from Springfield.
“If companies under a federal microscope believe it’s appropriate to make threats to get their way, they need to recalibrate their thinking and how they deal with this administration,” Pritzker spokeswoman Emily Bittner said. “The governor’s priority is to work with principled stakeholders on clean energy legislation that is above reproach.”Tony Arnold covers Illinois politics for WBEZ. Follow him @tonyjarnold.