The former general counsel for Commonwealth Edison testified Tuesday that he was pressured by associates of then-House Speaker Michael Madigan to hire and later renew a contract for a clout-heavy law firm while the utility was in the middle of negotiating two major bills in Springfield.
The testimony by Tom O’Neill, who served as ComEd’s top in-house attorney, provided the first link in the “ComEd Four” trial between a benefit the utility giant allegedly gave Madigan, a Chicago Democrat, and the work the speaker’s office’s did to shepherd legislation ComEd desperately wanted through the House chamber.
O’Neill told the jury that Madigan’s longtime confidant, Michael McClain, was “relentless” in pushing for ComEd to hire Reyes Kurson, a firm headed by longtime Democratic operative Victor Reyes.
The contract given to Reyes Kurson in 2011 was unusual in that it guaranteed at least 850 billable hours of work per year, O’Neill said. And when he looked into reducing those hours four years later, O’Neill said McClain went over his head, firing off an exasperated email to then-ComEd CEO Anne Pramaggiore about how upset “our Friend” — meaning Madigan — would be if the contract wasn’t renewed.
“I am sure you know how valuable (Reyes) is to our Friend,” McClain wrote in the email, shown to the jury Tuesday. “I know the drill and so do you. If you do not get involve(d) and resolve this issue of 850 hours for his law firm per year then he will go to our Friend. Our Friend will call me and then I will call you. Is this a drill we must go through?”
The contract was renewed on Reyes’ terms in 2016, shortly before the state legislature passed the Future Energy Jobs Act,, which, according to ComEd’s own estimates, provided the company a windfall of $1.8 billion.
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The former ComEd general counsel, whose testimony will continue Wednesday, is a key witness for prosecutors because he is providing an insider’s view on how the company, and particularly Pramaggiore, allegedly tethered its success to the legislature by keeping Madigan happy.
Pramaggiore’s mantra, according to O’Neill, was essentially, “What’s important to the speaker is important to ComEd.”
Charged in the case are McClain, a longtime ComEd lobbyist and Madigan confidant; Pramaggiore, the former CEO of ComEd; John Hooker, a former ComEd lobbyist; and Jay Doherty, a former ComEd lobbyist and longtime president of the City Club of Chicago.
The indictment alleged ComEd poured $1.3 million into payments funneled to ghost “subcontractors” who were actually Madigan’s cronies, put a Madigan-backed person on the ComEd board, and gave coveted internships to families in his 13th Ward, all part of an elaborate scheme to keep the speaker happy and help the utility’s legislative agenda in Springfield.
The defendants’ attorneys contend that the so-called scheme was nothing more than legal lobbying, part of the state’s high-stakes, often-messy politics where myriad interest groups and stakeholders compete for access to lawmakers.
Madigan and McClain, meanwhile, are facing separate racketeering charges alleging an array of corrupt schemes, including the bribery plot by ComEd.
O’Neill spent much of his testimony Tuesday giving the jury a view from the trenches on two key pieces of legislation at the center of the indictment: the Future Energy Jobs Act, and an earlier “smart grid” bill passed over the governor’s veto in 2011 that for the first time set a formula rate to give the company a more dependable stream of revenue.
According to O’Neill, Pramaggiore developed a strategy that would reduce the company’s reliance on the Illinois Commerce Commission and focus more on the legislature, and that to execute the plan, it was “important” to keep good relations with the speaker.
“It was not a secret strategy,” O’Neill said. “The speaker stood out as the political elected official whose relationship mattered the most.”
He said Pramaggiore “worked very hard to maintain a good relationship” with Madigan, even traveling to Turkey with him on a junket with other officials. The jury was also shown personal notes Pramaggiore wrote to Madigan thanking him for his leadership.
Pramaggiore also recognized the importance of McClain in Madigan’s sphere, and relied heavily on him for advice, O’Neill said.
“Sometimes Mike gave (advice) without being asked, but that’s the nature of the game,” O’Neill testified, as McClain, seated at one end of a long defense table, chuckled softly.
In addition, Pramaggiore kept Hooker, a longtime Madigan associate, working for ComEd as a contract lobbyist once he retired around 2012, saying she didn’t want to lose his “counsel and support” because the utility had more to do, O’Neill testified.
The 2011 legislation started with intensive negotiations with a small group of Madigan staffers before the bill was even distributed, O’Neill said.
The bill was not without its critics, including Democratic Gov. Pat Quinn, who vetoed the measure. ComEd was able to rally lawmakers to support a veto override, including Democratic leaders in the House and Senate. The bill was ultimately passed into law, with Madigan, despite all the behind-the-scenes arm-twisting, abstaining from the vote.
Asked by Assistant U.S. Attorney Sarah Streicker to describe his feelings when the bill finally passed, O’Neill didn’t hold back.
“My mood was one of utter exhaustion, but also celebration,” O’Neill said. “It was a huge win for ComEd.”
O’Neill also acknowledged on direct examination that Madigan’s influence likely got it over the hump, though he seemed to stop short of saying that the speaker was solely responsible for its passage.
“We got the votes, (Madigan) ran the bill,” he said.
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Unlike in 2011, O’Neill said, the 2016 the Future Energy Jobs Act bill started with a groups ranging from labor to environmentalists already at the table and quickly became a “very messy process.”
Helping quarterback it all was Heather Wier Vaught, the speaker’s chief legal counsel, as well as others on the Madigan’s leadership team. As it became clearer that there was a path to get the bill to a vote in the fall veto session, O’Neill said McClain and Hooker were instrumental in keeping ComEd informed about “subject matter” hearings and other insider information coming up on the House calendar.
Asked where Hooker and McClain were getting the information, O’Neill said, “From the speaker’s office.”
The the Future Energy Jobs Act was passed on Dec. 1, 2016, after a frantic last vote.
A few months later, Pramaggiore and McClain exchanged emails in which she thanked him for his support. McClain said in his email, which was shown to the jury during O’Neill’s testimony, that he lost his legislative seat in 1982 after the Republicans focused on beating him because they couldn’t defeat Madigan.
Despite the stinging defeat, McClain said he keeps a newspaper article about it on his wall because “One learns more from the losses than you do for the wins.”
In her response, Pramaggiore said she was forever grateful McClain was defeated back then, because he would later work for her.
“Because of that loss, because of you, ComEd was saved,” Pramaggiore said.
O’Neill testified that the idea to hire Reyes’ law firm was first floated around the time ComEd was negotiating the smart grid legislation in 2011.
Reyes, the former head of the Hispanic Democratic Organization, a patronage army built for former Chicago Mayor Richard Daley, was also a close ally and fundraiser of Madigan’s. O’Neill said he later learned that Reyes Kurson also did work for the speaker.
O’Neill told the jury he was in his Springfield office one day during the negotiations over the smart grid bill when Hooker came in and shut the door. Hooker said, “Tom, you need to move on the Victor Reyes deal. It’s important to get this done. What do we need to do to get this done?” according to O’Neill.
O’Neill said the pressure kept coming from McClain, who made it clear that Madigan wanted Reyes Kurson hired.
“It came to my attention (Reyes) had run a Hispanic political organization and had a relationship with Speaker Madigan,” O’Neill said. “Mike was inquiring essentially about what was taking so long.”
Under persistent pressure to get a contract done, O’Neill said he moved forward. “I wanted to just get it done so I didn’t have to deal with it,” he testified.
Though the contract was unusual because it guaranteed an amount of hours, O’Neill was careful to say that Reyes Kurson did perform for ComEd and that the utility was generally happy with their output.
“It was work we needed,” he said. “They did it. And we paid them for the work they did.”
But problems soon arose when ComEd was “running low on work” to give out to Reyes’ firm, O’Neill said. During the run-up to the Future Energy Jobs Act bill, McClain sent him an email breaking down the hours that Reyes Kurson had been paid so far and claiming they’d been shorted.
“Do you intend to offer something less?” McClain asked in the email, shown to the jury Tuesday. “I know I will hear about it no matter what.”
As McClain was turning up pressure to renew the Reyes contract, O’Neill said he sent Pramaggiore a copy of an email noting Reyes had already benefited from another ComEd contract with his consulting firm, Roosevelt Group.
O’Neill said he wanted Pramaggiore to be aware that he knew about Reyes’ other contract.
“I felt he was double dipping,” O’Neill said.
The issue was put to bed after McClain fired off his angry email to Pramaggiore. “I don’t understand why we have to spend valuable minutes on items like this when we know it will provoke a reaction from our Friend,” he wrote.
The contract with Reyes Kurson was renewed as requested.
The day began Tuesday with more testimony from state Rep. Bob Rita, a Blue Island Democrat who told jurors on Monday that Madigan ruled by “fear and intimidation.”
McClain’s defense lawyer, Patrick Cotter, sought to play down that comment, getting Rita to acknowledge Madigan didn’t use physical violence or a gun to pressure lawmakers.
But Rita described how he became a “little frustrated” when ComEd tapped him to be the chief sponsor of the utility’s key legislation in 2016 but Madigan’s staff didn’t invite him to some of the meetings on the bill.
With Rita on the stand, prosecutors walked through an intricate lesson in Illinois politics.
Testifying as a prosecution witness, Rita said he had no background in utilities and hadn’t served on any public utility committees when a ComEd lobbyist asked the veteran lawmaker to sponsor legislation that would help save the jobs and the nuclear facilities run by the company’s parent, Exelon.
Asked why he was selected to handle the sponsorship, Rita said: “I have no idea.”
Even so, Rita looked at being a sponsor as a “great opportunity” because it was a major piece of legislation that would “affect everybody in Illinois” as well as ComEd.
Rita said there was an urgent need to pass the legislation, which included slightly higher costs for consumers, because two Exelon nuclear plants were getting ready to close if the company did not get help from Springfield.
Prosecutors sought to show through Rita’s testimony that Madigan held sway over the fate of legislation even when he did not actually vote on the measure. Rita also testified that McClain, as Madigan’s longtime friend, played a major role in getting legislation passed in accordance with Madigan’s wishes.
Rita testified that before the ComEd bill, Madigan made him sponsor of another major piece of legislation during a meeting in the speaker’s office in spring 2013.
The bill was the major state gambling expansion, but U.S. District Judge Harry Leinenweber barred specific mention of it because it had nothing to do with ComEd.
Still, Rita was allowed to explain how Madigan told him he would be the sponsor of major legislation.
“At the end of the meeting (Madigan) stood up, he walked with me to the door, as the door opened Mike McClain was standing there,” Rita said. “(Madigan) pointed at Mike and said, ‘He will guide you. He will be your contact to help you.’”
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Late in the legislative process on the 2016 ComEd bill, Rita testified, he was not going to call one last-minute amendment that came from ComEd, but he changed his mind when McClain showed up and gave the go-ahead.
“l knew Mike wouldn’t give me bad advice or have me do something that wouldn’t be in line with Speaker Madigan,” Rita said.
On cross-examination, defense lawyers pressed the idea that McClain was acting merely as a lobbyist for ComEd, not an “agent” of Madigan’s.
“I trusted Mike that he would give me the advice that would be right for both,” Rita said.
