Commonwealth Edison cut ties with a lobbying firm co-owned by a top Chicago alderman a month ago, just as a federal criminal investigation into the power company’s state lobbying activities intensified.
ComEd ended its Springfield lobbying contract with Elgin-based Stratagem Consulting Group on Oct. 3, WBEZ has learned. The firm is co-owned by 36th Ward Ald. Gilbert Villegas, Jr., who is Mayor Lori Lightfoot’s floor leader, trusted with guiding major legislative initiatives through the City Council.
Stratagem had been under contract with ComEd since January, according to the firm’s state lobbyist disclosure filings.
Villegas said he profited from its deal with ComEd and all of the firm’s clients.
But on Friday, he also told WBEZ that he did not do any work for ComEd personally under that deal. Villegas was not a registered lobbyist for the company in Springfield. Stratagem’s lobbyists for ComEd were Villegas’ business partner, Elgin City Council member Baldemar Lopez, and another man.
Villegas said he did not know why ComEd hired Stratagem, why the deal ended or how much his company got paid, referring all such questions to Lopez.
Lopez said he and Villegas were approached last year by Fidel Marquez, Jr., who was ComEd’s senior vice president of governmental and external affairs until he abruptly left the company last month amid the federal probe.
Stratagem signed a one-year lobbying contract that was to pay $60,000, Lopez said. The deal with ComEd ended early, Lopez said, because, “They were doing some restructuring of their lobbying activities.”
Asked if those changes were prompted by the federal probe, Lopez replied, “I would assume.”
But Lopez said Stratagem has never been contacted by federal investigators.
In a statement to WBEZ, a ComEd spokeswoman said Stratagem was hired “to conduct general state legislative lobbying activities.” But she would not say why ComEd hired or parted ways with Stratagem.
The spokeswoman said Villegas “did not work with ComEd under this contract.”
Rising federal heat on ComEd
WBEZ first reported last month that the wide-ranging criminal probe is looking into whether ComEd hired politically connected consultants, including some with ties to powerful Illinois House Speaker and state Democratic Party boss Michael Madigan.
It’s unclear whether Stratagem’s Oct. 3 break with ComEd is in any way connected to the probe.
But the day before, on Oct. 2, Marquez retired, according to the company’s filings with federal corporate regulators.
Then, on Oct. 4, ComEd -- which has 4 million customers across northern Illinois -- and parent company Exelon received a second subpoena from the office of John Lausch, the U.S. attorney for the Northern District of Illinois.
ComEd and Exelon said the feds asked for the companies’ communications with powerful Democratic state Sen. Martin Sandoval, whose office in the Illinois Capitol had been raided by the FBI the week before the subpoena. At that time, the feds also asked ComEd for communications with other “individuals and entities,” but ComEd has declined to name them publicly.
In their Sept. 24 raid of Sandoval’s office, the feds sought records related to ComEd, Exelon, four unnamed Exelon officials and “any issue supported” by the companies, “including but not limited to rate increases,” according to court records.
Disclosure of the influential alderman’s previously unreported tie to the utility company comes as ComEd’s massive franchise agreement with the city nears its expiration next year. The deal was last renewed almost three decades ago, and a new agreement carries major financial implications for both the company and its customers across the city.
Villegas said he would consult with city ethics officials but planned to abstain from voting on any legislative proposal having to do with ComEd because Stratagem once worked for the utility company.
Villegas also said he has taken steps to sell his stake in Stratagem to Lopez by Nov. 30. He said he was doing so to comply with a new City Council ordinance intended to restrict outside employment by aldermen that could conflict with their official responsibilities.
That measure was passed in the wake of the federal corruption case against powerful Ald. Edward Burke, 14th Ward, who denies abusing his power to drum up clients for his private law firm.
“I don’t want to have any conflict with the ordinance I supported,” Villegas said of his decision to give up his ownership interest in Stratagem.
Stratagem’s 11 clients in Springfield
Stratagem was formed in Chicago in 2013 by Lopez, the Elgin City Council member, according to state records. Villegas was first listed as a manager of the company in 2015 -- the year that he became an alderman of his ward, on the city’s far Northwest Side.
Villegas has remained with the firm since then, telling city ethics officials he was a “partner” there and describing his line of work as “business development.”
In his ethics disclosure form for 2017, Villegas wrote that Stratagem “received compensation in excess of $5,000” from five companies: 2IM Group LLC, Primera Engineering, Patrick Engineering, AEG and Fer-Pal Construction.
“My company has had contractual relationships with these companies since before I was elected an Alderman,” Villegas wrote then in his statement of economic interest. “This consulting is in the nature of governmental relations with the state of Illinois and/or Cook and surrounding counties.”
He added, though, that the company does not help those clients in “their efforts to obtain contracts with the City of Chicago or its sister agencies.”
In Springfield, records show, Stratagem has lobbied the state government continuously since 2014 for a variety of clients. Villegas himself disclosed lobbying there in 2014, with Uber Technologies Inc. among the companies he aided.
In addition to ComEd, Stratagem had another 10 clients this year, including natural gas utility Nicor Inc. and Wexford Health Sources Inc., a Pennsylvania company that is in the midst of a 10-year, $1.4 billion deal to provide health care at Illinois prisons.
Another current lobbying client of Stratagem is Fer-Pal Construction. Fer-Pal’s other Springfield lobbyist this year is Jay Doherty, the City Club of Chicago president who also represents ComEd’s interests before state officials, according to Doherty’s disclosure reports
WBEZ first reported last month that federal agents raided the City Club, a nonprofit public affairs forum with offices in the Wrigley Building downtown.
Villegas said he never worked with Doherty for Fer-Pal and that his only contact with Doherty pertained to the City Club.
In a statement Friday, Fer-Pal told WBEZ, “We have not been contacted [by federal investigators]. Consistent with our policy, all lobbyist's [sic] contracts are periodically reviewed.”
Allegations of no-work deals
The subpoena served at the City Club in the May raid sought records relating to Madigan and ComEd officials, including Pramaggiore.
A source involved in the investigation said authorities are looking into allegations that some of the clout hires did little or no work and that they were paid by ComEd in exchange for official actions in the company’s favor, including rate hikes.
Nobody has been charged, and a spokesman for the U.S. attorney’s office in Chicago declined to comment Friday on Villegas or Stratagem’s deal with ComEd.
Exelon CEO Chris Crane told analysts Thursday in the company’s quarterly earnings conference call that it and ComEd were cooperating fully with federal prosecutors and appeared to downplay the impact that the probe could have.
“We’re not passing judgment on [whether there] is anything legal or illegal in some of our past practices with contract lobbyists or consultants,” Crane said. “I don’t expect [the investigation] will impede our business at all going forward.”
Exelon also disclosed in its quarterly filing Thursday that the federal Securities and Exchange Commission is now also investigating both it and ComEd. The firms’ lobbying activities are the focus of both the SEC probe and the federal criminal investigation.
Dave McKinney and Tony Arnold cover state politics for WBEZ. Dan Mihalopoulos is an investigative reporter.
Editor’s note: In the interest of full disclosure, ComEd is a WBEZ underwriter.