ComEd Quadruples Payments To Powerhouse Law Firm Amidst Corruption Probe

photo of a comed sign in Chicago
ComEd Regional Headquarters in Chicago pictured on Nov. 5, 2019. WBEZ has learned the federal investigation into the utility giant is ongoing. Manuel Martinez / WBEZ
photo of a comed sign in Chicago
ComEd Regional Headquarters in Chicago pictured on Nov. 5, 2019. WBEZ has learned the federal investigation into the utility giant is ongoing. Manuel Martinez / WBEZ

ComEd Quadruples Payments To Powerhouse Law Firm Amidst Corruption Probe

Amid a sprawling federal corruption probe, Commonwealth Edison quadrupled its payments last year to a powerhouse Chicago-based law firm that’s representing the utility giant in the investigation of its Springfield lobbying practices, WBEZ has learned.

Federal regulatory documents show ComEd paid Jenner & Block nearly $2.4 million in 2019 — more than what the power company had reported paying the law firm in the previous four years combined.

WBEZ first reported last year the feds are investigating whether ComEd hired politically connected consultants — some with ties to powerful Illinois House Speaker and state Democratic Party boss Michael Madigan — in order to win favorable government actions in Springfield, including electricity rate hikes.

No one at ComEd has been charged with wrongdoing. But ComEd’s parent company, Exelon Corp., has disclosed in regulatory filings that it and ComEd have received grand jury subpoenas from federal prosecutors in Chicago and that the probe could lead to “criminal or civil penalties, sanctions or other remedial measures.”

Two sources with knowledge of the federal probe told WBEZ that Jenner & Block is helping the company deal with federal authorities who are conducting the investigation.

In addition, two former consultants for ComEd said they had been contacted by the company to see whether they would sit for interviews with Jenner & Block attorneys as part of the utility’s own internal investigation. According to one of the former ComEd consultants, who was interviewed, the lawyers for the company made clear they were sharing their findings with the feds.

The sources spoke to WBEZ on the condition of anonymity because they were not authorized to speak publicly about the investigation.

A spokesman for ComEd would not describe the nature of the work that Jenner & Block has done for the power company, which serves more than 4 million homes and businesses thanks to its near-monopoly in northern Illinois.

“As a policy, we do not provide non-public information about our legal representation,” a spokesman told WBEZ. “We are cooperating fully with the investigation and are not able to comment further on it.”

A spokeswoman for Jenner & Block did not respond to WBEZ’s requests for comment.

WBEZ has learned the federal investigation into ComEd is ongoing.

Consumer watchdogs who monitor ComEd long have alleged that the utility uses rate-payer money to contract with politically-connected firms. Such critics say this is a form of “shadow lobbying” that curries favor with elected officials whose decisions have a major impact on the company’s fortunes.

Because it is a government-regulated utility, ComEd is required to annually disclose its major outside contractors. Corporate disclosures with the state and federal governments show the final payments ComEd made last year to other outside contractors under federal scrutiny — some of whom have been central figures in the government’s investigation.

Those payments included:

  • $77,000 to the company’s former lobbyist Michael McClain, a longtime political confidante to Madigan, whose home in Quincy, Ill., was raided by the feds in May 2019.

  • Nearly $400,000 to another lobbyist, Jay Doherty. He resigned as head of the City Club of Chicago after WBEZ reported that his offices in the Wrigley Building also were raided by federal agents last year.

  • Payments of $348,000 to indicted Chicago Ald. Ed Burke’s former law firm, Klafter & Burke, according to documents filed with the state.

Neither McClain nor Doherty have been charged with wrongdoing.

Nearly $2.4 million to major law firm

ComEd disclosed paying Jenner & Block, one of Chicago’s largest law firms, $2,375,448 in 2019, according to a filing with the Federal Energy Regulatory Commission. That’s more money than the $2.3 million that the utility had disclosed paying Jenner on the same form in the previous four years combined.

Exelon and ComEd disclosed last year that the office of John Lausch, the U.S. attorney in Chicago, had served them with a subpoena “requiring production of information concerning its lobbying activities in Illinois.”

And last fall, Exelon also told the Securities & Exchange Commission that it had created a “Special Oversight Committee” in June 2019 to comply with the subpoenas it received, and that the committee would hire outside counsel “to advise and assist the Committee.” The disclosure did not say who that outside counsel is, and Exelon and ComEd executives continue to decline to identify them.

Exelon and ComEd then disclosed in October to the SEC that they got another subpoena seeking communications with then-State Sen. Martin Sandoval — who has since pleaded guilty to federal bribery and tax evasion charges — and other unnamed people.

In the raid last year at Sandoval’s office in Springfield, court records show, agents sought documents on four unidentified Exelon officials and on issues supported by ComEd and Exelon, “including but not limited to rate increases.”

The Illinois State Capitol office of then-state Sen. Martin Sandoval, who is pictured left, was raided by federal officers, right, in September 2019. Seth Perlman, John O’Connor/Associated Press

Although no one at Exelon or ComEd has been charged, at least three high-ranking executives left as the corruption probe widened, including Anne Pramaggiore, the former CEO of Exelon. In addition, ComEd parted ways with two of its top lobbyists, John Hooker and Fidel Marquez.

Last week, Exelon also disclosed that Senior Executive Vice President William Von Hoene is taking a more limited role at the company due to health issues. Von Hoene joined Exelon as deputy general counsel in 2014, after nearly 20 years as a lawyer at Jenner & Block, according to the firm’s web site.

He is married to Nikki Zollar, the head of a red-light-camera company called SafeSpeed. In January, Sandoval pleaded guilty to accepting bribes to help stall legislation that would hurt the red-light-camera industry. In a recent court filing, federal prosecutors and Sandoval’s attorney jointly stated that the former lawmaker “has continued to provide valuable cooperation.”

Neither Von Hoene, Zollar nor SafeSpeed have been charged with wrongdoing.

ComEd disclosed payments to 30 other law firms — but most of those payments were dwarfed by what Jenner earned from the utility last year. Only the law firm of Rooney, Rippie & Ratnaswamy earned more from ComEd last year, with total payments of $3,929,093, according to federal regulatory filings. Jenner hired eight attorneys from that law firm last year.

The sources who spoke to WBEZ did not mention Rooney, Rippie & Ratnaswamy as being part of ComEd’s response to the federal criminal probe.

Madigan’s advisor and ComEd’s lobbyist

For part of 2019, ComEd continued to pay McClain, a one-time Springfield insider who has since emerged as a central figure in the feds’ investigation into the utility’s lobbying practices.

For decades, McClain was one of the most powerful lobbyists at the Illinois statehouse — due in large part to his rare, close friendship with Michael Madigan, the Illinois Democratic Party leader and longest-serving house speaker of any legislature in American history. While he was a registered lobbyist for several major companies — including ComEd — McClain also acted as Madigan’s legislative consigliere, a confidante so close to the speaker that he would even edit Madigan’s inaugural addresses.

There appeared to be no line between McClain’s friendship with the speaker and his official role as a hired gun for special interests at the Illinois Capitol.

photo of Michael McClain
Michael McClain pictured Jan. 9, 2020, in downtown Chicago. Michael McClain / WBEZ

Earlier this year, WBEZ published a 2012 email McClain wrote to two of then-Gov. Pat Quinn’s top aides in defense of a state worker facing discipline. McClain praised the worker because he “kept his mouth shut on Jones’ ghost workers, the rape in Champaign and other items.”

Madigan issued a statement after publication stating he “had no knowledge of the incident referenced in the story and only learned of this today. I encourage those with any information to come forward.”It remains unclear what McClain was referring to. Federal prosecutors in Chicago are looking into the email.

McClain retired from lobbying and practicing law at the end of 2016. Yet, ComEd continued to pay him for “legal services” in 2017 and 2018 in the amount of $361,000, WBEZ and the Better Government Association reported last year. In 2019, ComEd paid him $77,000 for “consulting services,” according to the recently-filed state records.

A ComEd spokesman said McClain was providing political consulting work for the company, but that “this work was discontinued.”

McClain did not respond to a request for comment. He has not been charged with wrongdoing. In January, McClain told WBEZ that federal authorities have asked him to cooperate with their investigation.

ComEd cut ties with Doherty, Burke

ComEd paid Doherty $390,250 in 2019, according to federal disclosures. The company cut ties with the longtime lobbyist on Nov. 5, according to state records.

The previous month, WBEZ reported that Doherty’s not-for-profit organization, the public affairs speaking program City Club of Chicago, had its Michigan Avenue offices raided earlier in the year. Federal agents were seeking documents related to several individuals, including Madigan.

Doherty resigned as the leader of the City Club in December. He disclosed earning just $69,563 from ComEd in 2019 in lobbying disclosure forms filed with the city of Chicago.

He has not been charged with wrongdoing and promptly hung up when contacted by a WBEZ reporter Tuesday.

Between 2011 and 2018, ComEd reported paying Doherty a total $3,104,250.

“ComEd has discontinued any work with this individual,” a company spokesman said.

Also in 2019, ComEd paid $296,681 to the law firm of Klafter & Burke, the former law firm of veteran Chicago Ald. Ed Burke, 14th Ward. The veteran Democratic powerbroker was arrested and charged with attempted extortion on Jan. 3, 2019.

photo of Ald. Ed Burke
Ald. Ed Burke, 14th Ward, enters the Dirksen U.S. Courthouse in Chicago on Jan. 3, 2019. Manuel Martinez / WBEZ

Federal prosecutors later hit the former chairman of the influential City Council Finance Committee with 14 corruption-related counts, including bribery and extortion. Just before he was indicted, Burke left his namesake law firm.

He has pleaded not guilty.

“In January 2019, we asked the firm to complete pending matters but not undertake any new work, and have not sent new matters to the firm,” a ComEd spokesman told WBEZ.

A WBEZ analysis has found the firm counted ComEd as one of its biggest clients, saving the utility nearly $4.3 million in property tax refunds between 2009 and 2019.

Records show that ComEd also paid the firm $266,105 in 2014 for “business consulting.”

Klafter & Burke did not respond to a request for comment.

Politically connected ComEd contractors

Among the companies missing from ComEd’s 2019 disclosure were two companies that had previously done business with the utility: Power Washing Pros and Industrial Fence.

Power Washing Pros is led by Rudolph Acosta, Sr., a former campaign aide to Sandoval.

In 2017, the utility paid $277,512 to Acosta’s company.

A spokesman for ComEd stated that the company regularly evaluates its contractor needs and makes decisions on who to contract with “for a variety of reasons.”

And the spokesman said Sandoval’s daughter continues to work at the company, as does the daughter-in-law of former state Rep. Luis Arroyo, who has pleaded not guilty to a federal bribery charge. In a joint court filing, federal prosecutors and attorneys for Arroyo stated that they anticipate “additional, related charges” to be brought against the former assistant majority leader “in the near future.”

ComEd did not report doing any business in 2019 with Industrial Fence, a company with ties to both Sandoval and Arroyo that ComEd had paid more than $764,000 in 2017 and 2018.

Before they were forced from office, Sandoval and Arroyo had staunchly defended Industrial Fence after it lost a $6.7 million contract with the Illinois Tollway. Other ComEd contractors in 2019 included:

  • Monterrey Security Consultants of Chicago, which was paid nearly $1.2 million for work that the power company only labeled as “facilities.” The brother of former Chicago Ald. Danny Solis once co-owned Monterrey. The firm did not comment for this story.

  • Another security firm, Quantum Crossings, which got nearly $4.5 million from ComEd last year. The firm is a prolific campaign donor and is chaired by Tom Donovan, the former patronage chief for Chicago Mayor Richard J. Daley. The company did not respond to a request for comment.

  • The former law firm of the Illinois Senate President Don Harmon, D-Oak Park, which was paid nearly $345,000 last year. Harmon left the law firm of Burke, Burns & Pinelli earlier this year after he was elected president of the Illinois Senate. A spokesman for Harmon did not immediately respond to a request for comment. Neither did a representative of the law firm.

Editor’s note: ComEd is a WBEZ underwriter. And in the interest of transparency, WBEZ obtained documents showing companies that Commonwealth Edison contracted with in 2019. Among these are entities that have financial or personal connections with Chicago Public Media or employee family members. These are Jenner & Block, Morgan, Lewis & Bockius, and Steptoe & Johnson. WBEZ has taken great care to ensure that none of those relationships have any influence on our reporting.

Tony Arnold covers Illinois politics for WBEZ. Follow him @tonyjarnold. Dan Mihalopoulos is an investigative reporter on WBEZ’s Government & Politics Team. Follow him @dmihalopoulos.