Suit alleges corrupt scheme under which Commonwealth Edison funneled payments to the Speaker of the Illinois House of Representatives over many years to ensure passage of bills permitting ComEd to charge dramatically higher electric rates in Illinois dating back to 2011
On August 3, 2020, Lieff Cabraser Heimann & Bernstein, LLP, Bellows Law Group, and Mason Lietz & Klinger filed a federal bribery and corruption class action lawsuit in the Northern District of Illinois on behalf of Commonwealth Edison's customers and ratepayers alleging that over many years, ComEd paid bribes to Michael J. Madigan, the powerful Speaker of the Illinois House of Representatives, so that Madigan would ensure passage through the Illinois legislature of bills permitting ComEd to charge higher electric rates. The multi-year illegal scheme benefitted ComEd, defendant Exelon Corporation, and Madigan; the losers were public trust in government, the people of Illinois, and ComEd's customers.
The complaint alleges that the scheme was part of a longstanding "pay to play" enterprise headed by Madigan, involving his network of loyalists as well as defendants and their individual employees and representatives. The modus operandi of Madigan’s enterprise was simple: Madigan demanded money or "favors," defendants complied, and in exchange Defendants received Madigan’s support for legislation favoring their economic interests. That support was crucial: it is common knowledge no bill moves in the Illinois House without Madigan’s support.
"Consumers and small businesses are struggling enough to get by already without paying higher utility rates because of corruption," notes Lieff Cabraser partner Jonathan Selbin, who represents the plaintiffs with co-counsel.
As the complaint sets out, and as has been admitted publicly in a Deferred Prosecution Agreement between ComEd and the U.S. Department of Justice, ComEd hired Madigan’s associates as "subcontractors," who were paid well (to the tune of more than $1.3 million) for little or no work, appointed another associate to its board of directors (without interviewing or even considering other candidates), and retained a particular law firm "with the intent to influence and reward" Madigan. Further, ComEd concealed its illegal payments using off-the-books payment records and fraudulent invoices.
The bribes to Madigan paid off handsomely for ComEd. As the complaint further details, under Madigan’s stewardship, the Illinois legislature passed two bills in 2011 and 2016 - the Energy Infrastructure and Modernization Act ("EIMA") and the Future Energy Jobs Act ("FEJA") - each of which permitted ComEd to charge dramatically higher rates for electricity. Some 70% of Illinois residents (individuals and businesses), including Plaintiffs, who buy electricity from ComEd, paid out of pocket for these rate increases.
As the complaint highlights, the central allegations in the case are as indisputable as they are shocking. Many of the essential facts of the illegal conduct are laid bare, and admitted to by ComEd, in the DOJ's Deferred Prosecution Agreement. Defendants’ corrupt intent is proven by their efforts to obfuscate the truth. And the harm to Plaintiffs and the proposed Class is staggeringly real: to date, they paid approximately $1.64 billion in increased electricity rates under legislation that never would have passed but for defendants’ corrupt scheme.
"The violation of the public trust here is staggering," notes The Bellows Law Group's Laural G. Bellows, who also represents the plaintiffs in the case. "It is time we recognized that corruption is not a victimless crime."
The complaint makes explicit the fact that without the bribery-induced support of Madigan, ComEd would not have secured the favorable legislation allowing it to increase rates in the amounts it obtained and charged consumers, and states claims under the Racketeering Influenced and Corrupt Organizations Act, as well as Illinois statutory and common law. The suit seeks an award of economic, monetary, actual, consequential, compensatory and punitive damages as appropriate under the law.
Laurel G. Bellows
The Bellows Law Group, P.C.
209 South LaSalle, Suite 800
Chicago, IL 60604
Gary M. Klinger
Mason, Lietz & Klinger, LLP
227 W. Monroe Street, Suite 2100
Chicago, IL 60606