Illinois subsidiary of AT&T is under federal criminal investigation

A subsidiary of AT&T led by a former top aide to ex-House Speaker Michael Madigan could face a criminal charge, according to an SEC filing. AT&T says any charge would be without merit.

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Illinois Democratic Senators Dick Durbin and Tammy Duckworth do not want President Joe Biden to ask U.S. Attorney John R. Lausch Jr., to resign at this time.

A subsidiary of AT&T is the focus of a federal investigation led by U.S. Attorney John Lausch in Chicago, according to an SEC filing.

Ashlee Rezin Garcia/Sun-Times file photo

A subsidiary of AT&T led by a former top aide to ex-House Speaker Michael Madigan could face a criminal charge as an apparent offshoot of an ongoing federal investigation into the dethroned Chicago Democrat, the company revealed in a federal regulatory filing.

The telecommunications giant reported to the Securities and Exchange Commission that a consulting contract executed in 2017 by Illinois Bell Telephone Company LLC is the focus of a previously undisclosed federal investigation led by U.S. Attorney John Lausch in Chicago.

“Recently, the U.S. Attorney’s Office for the Northern District of Illinois informed us that they are considering filing a charge against one of our subsidiaries, Illinois Bell Telephone Company, LLC (Illinois Bell), arising out of a single, nine-month consulting contract in 2017 worth $22,500,” the company disclosed on Wednesday.

A spokesman for the U.S. Attorney’s office declined comment on the AT&T filing.

Illinois Bell Telephone Company LLC is led by former Madigan aide Eileen Mitchell, a one-time policy director for the ex-speaker. The company filing did not indicate what, if any, role Mitchell had in the contract in question.

Nor were details spelled out, identifying the individual or company with which Illinois Bell contracted.

Madigan, who has not been charged and denies wrongdoing, has been in the federal government’s crosshairs since July 2020, when Commonwealth Edison and Lausch’s office entered into a three-year deferred prosecution agreement in which the utility agreed to pay $200 million to set aside a bribery charge tied to its efforts to influence the ex-speaker.

In November 2020, a federal grand jury indicted four former ComEd executives and lobbyists on corruption charges related to a long-running company bribery scheme in which consulting contracts requiring little to no work were allegedly doled out to Madigan associates as part of an effort to advance ComEd’s legislative agenda in Springfield.

Those charged included the power company’s former chief executive, Anne Pramaggiore, and Michael McClain — a ComEd lobbyist from Quincy, Illinois, who was a close Madigan confidante. Also charged were longtime ComEd executive John Hooker and lobbyist Jay Doherty, who was best known in Illinois political circles for leading the City Club of Chicago, a major civic-affairs organization.

All four are awaiting trial.

Another former ComEd lobbyist, Fidel Marquez, has pleaded guilty to charges related to the scheme and is cooperating with federal investigators.

In the AT&T filing, the company said it had been “cooperating” with Lausch’s office and that it did not believe it had engaged in any wrongdoing.

“Since 2019, Illinois Bell has been cooperating with the U.S. Attorney’s Office concerning their widely reported investigation of certain elected Illinois politicians and related parties for corruption,” the company said.

“Based on our own extensive investigation of the facts and our engagement with the U.S. Attorney’s Office, we have concluded that the contract at issue was legal in all respects and that any charge against Illinois Bell or its personnel would be without merit,” AT&T said in its filing.

AT&T was known to be a focus of federal investigators at the time the federal investigation surrounding Madigan and ComEd was revealed.

The same day ComEd and Lausch’s office agreed to the deferred prosecution deal, Madigan’s state office received a far-reaching federal subpoena seeking records concerning AT&T, Walgreens, Rush University Medical Center and a host of operatives and lobbyists inside Madigan’s political orbit.

That subpoena sought “any and all contracts, agreements, letters of engagement and correspondence related to the retention, hiring or engagement of any person to provide services, including lobbying, consulting or other services to AT&T of Illinois of any of its parents, subsidiaries or affiliated business entities.”

AT&T did not respond to WBEZ questions at the time the company’s name showed up in the subpoena to Madigan’s office.

And on Thursday, the company did not respond directly to more questions about the contract itself, who it involved, Mitchell’s status or whether AT&T had received its own subpoena or subpoenas from federal investigators.

But the company did reiterate its innocence Thursday.

“We have extensively investigated this matter and concluded that the contract at issue was legal and that any charge against Illinois Bell or its employees would be meritless,” company spokesman Jim Kimberly said.

In the SEC filing, AT&T acknowledged it had no way of knowing how its ongoing interactions with Lausch’s office would unfold, but it did address the potential impact of a possible criminal charge or charges.

“We cannot predict the outcome of the government’s investigation, which could…result in criminal penalties, fines or other remedial measures…adversely affect our reputation with customers, regulators and other stakeholders, and…impact our existing federal and state government contracts and our ability to win new contracts in the future.”

Dave McKinney covers Illinois politics and government for WBEZ. Follow him on Twitter @davemckinney.

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