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AT&T agreed to pay a $23 million fine “to resolve a federal criminal investigation into alleged misconduct involving the company’s efforts to unlawfully influence former Illinois Speaker of the House Michael J. Madigan,” a Department of Justice press release said today.
“The investigation of AT&T Illinois is being resolved with a deferred prosecution agreement under which the company admitted it arranged for payments to be made to an ally of Madigan to influence and reward Madigan’s efforts to assist AT&T Illinois with respect to legislation sought by the company,” the announcement said. AT&T “admitted that in 2017 it arranged for an ally of Madigan to indirectly receive $22,500 in payments from the company.”
AT&T “made no effort to ensure any work was performed” in exchange for the payment, the Justice Department said, adding that AT&T acknowledged that the payment was made “in exchange for Madigan’s vote and influence over a bill.” The bill ended AT&T’s obligation to provide landline phone service to all state residents.
AT&T allegedly used a lobbying firm as an intermediary to make the payment and disguise its true purpose. US Attorney John Lausch’s office filed a one-count criminal information in US District Court for the Northern District of Illinois, charging AT&T Illinois with using an interstate facility to promote legislative misconduct. Former AT&T Illinois President Paul La Schiazza was indicted on five charges as a result of the same investigation.
“La Schiazza conspired in 2017 with former Speaker Michael J. Madigan, Madigan’s close friend, Michael McClain, and others, to corruptly arrange for $22,500 to be paid to a Madigan ally… Although the members of the conspiracy formulated a pretextual assignment for Madigan’s ally to disguise why the ally was being paid, the ally performed no actual work for AT&T Illinois and had no role in advancing the legislation,” the Justice Department said.
Madigan and McClain were previously indicted on racketeering and bribery charges. A new superseding indictment adds an AT&T-related conspiracy charge. Madigan, a Democrat, was House speaker for all but two years between 1983 and 2021, before resigning. The original “22-count indictment accuses Madigan of leading for nearly a decade a criminal enterprise whose purpose was to enhance Madigan’s political power and financial well-being while also generating income for his political allies and associates,” the Justice Department said in March.
AT&T pushed bill to end landline obligation
AT&T’s payment was designed to influence a 2017 vote on Carrier of Last Resort (COLR) legislation that “terminate[d] AT&T Illinois’ costly obligation to provide landline telephone services to all Illinois residents,” the deferred prosecution agreement says. The law was passed by the legislature and vetoed by the governor, but both houses of the legislature voted to override the veto.
Under the agreement with AT&T, “the government will defer prosecution on the charge for two years and then seek to dismiss it if AT&T Illinois abides by certain conditions, including continuing to cooperate with any investigation related to the misconduct alleged in the information,” the Justice Department said, continuing:
In addition to the monetary penalty and its continued cooperation with the government, AT&T Illinois’s obligations under the agreement include implementing a new compliance and ethics program and providing annual reports to the government regarding remediation and implementation of the program. If AT&T Illinois fails to completely fulfill each of its obligations under the agreement during the two-year term, the US Attorney’s Office can initiate prosecution of the charged offense.
AT&T must pay the $23 million fine to the Crime Victims Fund within 30 days. “We hold ourselves and our contractors to the highest ethical standards. We are committed to ensuring that this never happens again,” AT&T said in a statement to media organizations.
