AT&T paid bribes to get two major pieces of legislation passed, US gov’t says

A large AT&T logo seen on the outside of its corporate offices.

The US government has provided more detail on how a former AT&T executive allegedly bribed a powerful state lawmaker’s ally in order to obtain legislation favorable to AT&T’s business.

Former AT&T Illinois President Paul La Schiazza is set to go on trial in September 2024 after being indicted on charges of conspiracy to unlawfully influence then-Illinois House Speaker Michael Madigan. AT&T itself agreed to pay a $23 million fine in October 2022 in connection with the alleged illegal influence campaign and said it was “committed to ensuring that this never happens again.”

US government prosecutors offered a preview of their case against La Schiazza in a filing on Friday in US District Court for the Northern District of Illinois. A contract lobbyist hired by AT&T “is expected to testify that AT&T successfully passed two major pieces of legislation after the company started making payments to Individual FR-1.”

The Madigan ally referred to in the court document as “Individual FR-1” is former state Rep. Edward Acevedo, a Chicago Tribune article notes. Acevedo, who was Madigan’s assistant majority leader in the Illinois House before retiring in 2017, was sentenced to six months in prison for tax evasion in 2022. Madigan left his House speaker post in 2021.

In one internal email sent to an AT&T employee, La Schiazza allegedly described the company’s quid pro quo with Madigan as “the friends and family plan.”

The government said the bribery scheme resulted in passage of legislation eliminating AT&T’s Carrier of Last Resort (COLR) obligation to provide landline phone service, and separate legislation related to small cell deployments. Madigan, a Democrat, was House speaker when both bills were passed. The lobbyist who is expected to testify allegedly acted as an intermediary by transmitting payments to Madigan’s ally.

“The friends and family plan”

From February 2017 to January 2018, La Schiazza “conspired with Madigan, Madigan’s close confidant, Michael McClain, and [three AT&T employees identified as] ATT-1, ATT-2, and ATT-3 to corruptly confer benefits on a Madigan associate to influence and reward Madigan for passing the COLR legislation,” the government filing said.

Madigan and McClain were indicted on federal racketeering and bribery charges and are scheduled to go on trial in October. La Schiazza was indicted on one count of conspiracy, one count of corruptly giving something of value to reward a public official, and three counts of using a facility in interstate commerce to promote unlawful activity.

“Madigan’s outsized power in the General Assembly meant his approval was necessary for the passage or defeat of legislation of concern to AT&T,” the government filing in the La Schiazza case said. Testimony at trial “will demonstrate that Madigan and McClain were closely associated and that McClain acted on Madigan’s behalf in soliciting and facilitating the provision of benefits from AT&T,” the filing said.

The $22,500 was paid in nine monthly installments of $2,500 in 2017, the filing said. The payments were approved by AT&T even though “internal justifications to AT&T’s accounting department for the payments to Individual FR-1 were incomplete, in that they did not mention that Individual FR-1 was the intended recipient of the payments,” the filing said. A “false contract amendment” was allegedly used to conceal the payments.

“Specifically, at McClain’s request, defendant and his coconspirators arranged for AT&T to pay Individual FR-1, a former state representative and political ally of Madigan, approximately $22,500 for supposed consulting services. In reality, the reasons given for paying Individual FR-1 were pretextual, and Individual FR-1 did no work in return for the payments,” the government said.

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