SEC Charges Exelon, ComEd, Former CEO in Political Corruption Scheme (Chicago, IL) (via The Center Square) — The Securities and Exchange Commission charged Exelon Corp., electric utility Commonwealth Edison Company and former ComEd CEO Anne Pramaggiore with fraud in connection with a multi-year scheme to corruptly influence former Illinois House Speaker Michael Madigan.
Exelon and ComEd agreed to settle the charges, with Exelon paying a civil penalty of $46.2 million. ComEd is an Exelon subsidiary.
The charges against Pramaggiore will be litigated, according to the SEC.
From 2011 through 2019, ComEd arranged for various associates of Madigan to obtain jobs, subcontracts and payments to influence Madigan regarding legislation favorable to ComEd in Springfield, according to the SEC’s order against Exelon and ComEd. The order finds that ComEd arranged payments to Madigan’s associates through third-party vendors to conceal the size of the payments and to assist ComEd in denying responsibility for oversight of Madigan’s associates, who performed little or no work.
The order finds that ComEd made indirect payments totaling more than $1.3 million to Madigan’s associates.
In July 2020, ComEd agreed to pay $200 million to resolve a criminal investigation into the years-long bribery scheme. As part of a deferred prosecution agreement, ComEd admitted it arranged jobs, vendor subcontracts and payments in a bid to influence Madigan to support of legislation favoring ComEd. That resulted in benefits to ComEd of more than $150 million.
The SEC’s complaint against Pramaggiore alleges she participated in, and in some instances directed, the bribery scheme. The complaint alleges that Pramaggiore did not disclose the bribery scheme and instead misled investors when she characterized ComEd’s lobbying activities as legitimate. The complaint also alleges that, as part of the scheme, Pramaggiore lied to Exelon’s auditors and filed false certifications.
“As alleged in our complaint, Pramaggiore’s remarks to investors about ComEd’s lobbying efforts hid the reality of the long-running political corruption scheme in which they were engaged,” LeeAnn Gaunt, chief of the SEC Enforcement Division’s Public Finance Abuse Unit, said in a statement. “When corporate executives speak to investors, they must not mislead by omission.”
The SEC’s complaint alleges that Pramaggiore violated antifraud and books and records and internal accounting controls provisions of the federal securities laws and that she aided and abetted Exelon’s and ComEd’s violations of books and records and internal accounting controls provisions, according to the SEC.
The SEC is seeking permanent injunctive relief, disgorgement plus prejudgment interest, a civil penalty, and an officer and director bar against her.
In May, a jury found four former Commonwealth Edison executives and lobbyists, including Pramaggiore, guilty of bribery-related charges as part of an eight-year conspiracy scheme centered around Madigan.
Although Madigan wasn’t on trial, the longest-serving state legislative leader in U.S. history has been charged with 23 counts of racketeering, bribery and official misconduct in a separate case that could go to trial in April 2024.
Prosecutors had alleged that Pramaggiore, former state lawmaker and lobbyist Michael McClain, former ComEd lobbyist John Hooker and former contract lobbyist Jay Doherty were involved in a multi-year scheme to gain Madigan’s support for legislation that would benefit the utility’s bottom line.
McClain will stand trial again with Madigan next year.
At trial, prosecutors presented secretly recorded videos, wiretapped phone calls and hundreds of emails to show how the four former ComEd executives and lobbyists were “the grandmasters of corruption.”
Prosecutors said that the utility paid out $1.3 million in jobs, contracts and payments to associates of Madigan over eight years in exchange for favorable treatment on legislation in Springfield that would affect the finances of the state’s largest electric utility.
Defense attorneys said the four never bribed anyone and argued the conduct was legal lobbying, including efforts to build goodwill with elected officials.
In that case, Pramaggiore is set to be sentenced at 10 a.m. on Jan. 16, 2024.
SEC Charges Exelon, ComEd, Former CEO in Political Corruption Scheme