Former AT&T Illinois boss Paul La Schiazza’s bribery trial could easily have been lost in the parade of major public corruption cases at Chicago’s federal courthouse.
But fate — in the form of the U.S. Supreme Court — stepped in, leading to a six-month delay in the blockbuster racketeering case of the man La Schiazza is accused of bribing: then-House Speaker Michael Madigan.
Now the spotlight is squarely on La Schiazza and his trial beginning Tuesday at the Dirksen U.S. Courthouse, where he stands accused of a scheme to funnel $22,500 in payments to a Madigan associate in exchange for the speaker’s help passing legislation important to the phone giant.
Instead of a retread of evidence, La Schiazza’s case is now expected to offer a sneak preview of a key part of the ex-speaker’s own trial, which kicks off Oct. 8.
Among the new evidence will be testimony from former Madigan insider Tom Cullen, a lobbyist who prosecutors allege served as a go-between for the payments from AT&T to former state Rep. Edward Acevedo. Another witness, former AT&T lobbyist Stephen Selcke, is expected to offer a behind-the-scenes look at the utility’s efforts to get in Madigan’s good graces.
Prosecutors also want the jury to see email exchanges showing Madigan’s son, Andrew, asked La Schiazza to sponsor a nonprofit event in July 2017, less than two weeks after AT&T Illinois’ bill to end mandated landline service became law, allegedly with his father’s assistance.
Andrew Madigan wrote that the idea came “at the suggestion of our good friend, Mike McClain,” a former lobbyist and Madigan’s longtime confidant, prosecutors according to a prosecution filing earlier this year. La Schiazza forwarded the request to a colleague in the legislative affairs department on July 12, 2017, writing “this will be endless,” according to the filing.
“I suspect the ‘thank you’ opportunities will be plentiful,’” the colleague allegedly emailed back, referring to the recent passage of AT&T’s coveted landline legislation, known by the acronym COLR, which was expected to save the company millions of dollars.
“Yep,” La Schiazza allegedly responded. “We are on the friends and family plan now.”
La Schiazza has denied wrongdoing, and in court filings his lawyers have laid out a defense centered on two issues: whether there was any “arrangement” between Madigan and AT&T before the bill was passed, and whether there is proof La Schiazza thought what he was doing was illegal.
To illustrate La Schiazza’s state of mind at the time, the defense has pointed to emails where he allegedly told underlings they had “legal approval” from company lawyers to “engage Eddie (Acevedo) in this way.”
“The fact that Mr. La Schiazza asked his subordinates to coordinate legal approval is directly relevant to his state of mind in hiring Mr. Acevedo,” his attorneys wrote in a recent pretrial filing.
La Schiazza, 66, was charged in an indictment returned by a federal grand jury in October 2022 with conspiracy, federal program bribery, and using a facility in interstate commerce to promote unlawful activity. The most serious counts carry up to 20 years in prison if convicted. He has pleaded not guilty and has been free on bond while his case is pending.
Jury selection in the case is scheduled to start Tuesday before U.S. District Judge Robert Gettleman, who has said the trial will last about three weeks.
That means the jury could get the case at about the same time Madigan and McClain go on trial on sweeping racketeering conspiracy charges that include a range of allegedly corrupt activities, including the AT&T allegations and a similar but much larger scheme by utility giant Commonwealth Edison.
Madigan had originally been scheduled to go on trial well before La Schiazza, but his case was postponed after the U.S. Supreme Court agreed to take up an Indiana case dealing with a federal bribery statute charged in Madigan’s indictment.
The high court’s ruling in the case against former Portage Mayor James Snyder came down in late June. It clarified that to prove bribery, prosecutors have to show there was an agreement ahead of time to exchange something of value for an official act, not just a “gratuity” or award given to a politician after the fact.
While the defense in Madigan’s case has argued the Supreme Court ruling should gut the indictment against the former speaker, it has had little overt effect in the runup to La Schiazza’s trial, since the charges allege the arrangement to pay Acevedo was made before Madigan helped shepherd AT&T’s bill through the General Assembly.
But the defense has pointed to Snyder in trying to limit certain ancillary evidence from being presented to the jury — including the “friends and family plan” email chain regarding Andrew Madigan’s donation request.
In asking the judge to bar that evidence from trial, La Schiazza’s lead attorney, Tinos Diamantatos, argued in a pretrial hearing last month that the $2,500 check for Andrew Madigan’s charity was cut in September 2017, well after the landline bill passed, making it an “after-the-fact” request that falls under the Supreme Court’s guidelines about legal “gratuities.”
Gettleman has yet to rule on the issue.
Orbiting politics
Unlike many of the other figures in the Madigan investigation, La Schiazza comes to his trial with a relatively low profile and little political baggage. Now retired, he and his wife live in the seaside town of Newport, Rhode Island, where they purchased a home just off the famed Bannister’s Wharf in 2020 for $1.1 million, real estate records show.
Last year, the La Schiazzas purchased a second home in the sailing mecca’s historic Point neighborhood for $670,000 that they are now rehabbing according to strict preservation regulations, records show.
A native of Indianapolis, La Schiazza graduated from Purdue University in 1979 and spent his entire career in the telecommunications business, first with Indiana Bell and later handling regulatory issues in a series of jobs with SBC Communications and its subsidiary, Ameritech.
Known as a no-nonsense, blunt-talking leader, La Schiazza helped navigate Ameritech and later AT&T through the thicket of government regulation and competition matters that blossomed as cell phone technology took off and high-speed internet was being rolled out across the country.
By 2001, La Schiazza had risen to president of Ameritech’s Wisconsin division, where he was at the forefront of a battle by smaller carriers to grab a share of the market after Congress passed the 1996 Telecommunications Act.
At that time, Ameritech — and La Schiazza — were accused of playing hardball, including sending a letter that some perceived as a threat to yank funding to organizations that did not support the company’s political agenda.
La Schiazza told the Milwaukee Journal Sentinel that the letter was simply his company’s effort to reach out to groups aligned with an organization that favored tighter regulations.
The only real whiff of political scandal in La Schiazza’s career came a year later, when then-Wisconsin state Sen. Chuck Chvala, the Democratic Senate majority leader, was indicted on charges that included steering campaign cash to out-of-state organizations and “independent” political groups he secretly controlled.
Among the donations at issue in the case were two $40,000 checks SBC Ameritech wrote to the Democratic Legislative Campaign Committee, a Washington, D.C.-based group that raised money for state candidates and political action committees. The DLCC, it turned out, was a primary supporter of a PAC secretly run by Chvala.
La Schiazza was quoted in news reports saying his company believed the donations were not going to come back to Wisconsin, and that there was no link between the money and any benefits Ameritech got in the Wisconsin General Assembly, including the removal of a tax provision highly unfavorable to Ameritech in the Senate version of the state budget.
“There never was, or will be, or has been, any linkage between a contribution that we make and expecting any kind of favorable action in return,” La Schiazza told the Wisconsin State Journal in December 2002. “It did not happen in this case and hasn’t happened in the past.”
Chvala wound up pleading guilty to two counts and was sentenced in 2005 to nine months in prison.
A move to Illinois
La Schiazza took over as president of AT&T Illinois in 2006, when he was in his mid-40s, settling his family in north suburban Glencoe. Like any big company in a heavily regulated industry, AT&T had a lot of fires to put out in the Illinois legislature, and La Schiazza was at the forefront of many of those battles.
One of the biggest came in 2017, when the company was pushing its legislation to end mandatory landline service. At the time, AT&T had 1.2 million traditional landline customers in the state — 474,000 residential and 725,000 business — and was losing about 5,000 each week, according to La Schiazza.
“We’re investing in a technology that consumers have said they don’t want anymore and wasting precious hundreds of millions of dollars that could be going to the new technologies that would do a better job of serving customers,” La Schiazza told the Tribune in a May 2017 interview.
La Schiazza said the company’s previous bill two years earlier was never voted on, but this time around he was “optimistic” that sentiment had shifted toward passage.
According to the federal indictment, at the time of that interview, the scheme to reward Madigan was already underway.
The agreement to funnel payments to Acevedo, a longtime Madigan acolyte who had retired from the House to become a lobbyist, began in February 2017, after the company learned through McClain that the speaker was looking to kick Acevedo some money, according to the indictment.
In an email exchange that March, AT&T Illinois’ director of legislative affairs asked two of the company’s executives if they were “100% certain” they would get credit “from the powers that be” if the payments were made to Acevedo.
“I would hope that as long as we explain the approach to McClain and Acevedo gets the money then the ultimate objective is reached,” one of the executives wrote back, according to a statement of facts AT&T agreed to in court.
The legislative affairs director responded, “I don’t think (La Schiazza) wants this based on hope. We need to confirm prior to executing this strategy,” the statement said.
At McClain’s direction, AT&T employees then met with Acevedo to discuss a “pretextual” reason for the payments: to “prepare a report on the political dynamics of the General Assembly’s and Chicago City Council’s Latino Caucuses,” according to the statement of facts.
Acevedo never did any real work for AT&T Illinois, however. In fact, according to AT&T’s admissions in court, he balked at first at the payments, saying they were too low. But Acevedo agreed to the deal after McClain stepped in and said the amount was “sufficient.”
After a protracted fight, the landline bill passed during the final hours of the spring 2017 legislative session — with Madigan’s direct assistance, according to legislative records and the statement of facts agreed to by AT&T.
On June 29, 2017, Madigan permitted the bill to be brought to a vote and cast his ballot in favor of the legislation, records show. Two days later, after Republican Gov. Bruce Rauner vetoed the legislation, Madigan and the Democrat-led General Assembly overrode him, with Madigan again voting for the override.
In court filing earlier this year, prosecutors revealed that the landline legislation was not the only bill where Madigan allegedly helped AT&T. The then-powerful speaker was also directly involved in “small cell” legislation in 2017 that allowed companies such as AT&T to put up micro-towers on light poles and elsewhere in public rights-of-way, according to the filing.
That fall, Madigan helped to advance the small cell bill during the veto session of the Illinois General Assembly, and in the spring of 2018, he helped defeat an amendment to the legislation that would have been harmful to AT&T’s interests, according to prosecutors.
References to the small cell bill were also captured in FBI wiretaps, prosecutors alleged. In a call intercepted on May 16, 2018, for example, Madigan and McClain discussed the amendment that would have walked back AT&T’s gains.
When Madigan asked McClain if he was familiar with the legislation, McClain allegedly responded: “The small cell bill that, uh, you, you directed me to help them pass it last year, which I did do,” according to court filings.
“Yeah, yeah, yeah,” Madigan allegedly said.
Charges against Madigan
Madigan, 82, was the longest serving leader of any legislative chamber in the nation who held an ironclad grip on the state legislature as well as the Democratic Party and its political spoils. He was dethroned as speaker in early 2021 as the investigation swirled around him, and soon after resigned the House seat he’d held since 1971.
Madigan and McClain were charged in March 2022 in the original 22-count indictment alleging they conspired to participate in an array of bribery and extortion schemes from 2011 to 2019 that allegedly leveraged Madigan’s elected office and political power for personal gain.
The indictment also accused Madigan of illegally soliciting business for his private property tax law firm during discussions to turn a state-owned parcel of land in Chinatown into a commercial development.
Madigan and McClain have pleaded not guilty.
McClain is also awaiting sentencing in his conviction for bribery conspiracy last year in the “ComEd Four” case against him and three other ComEd executives and lobbyists. A judge is expected to rule in the coming months whether the convictions should stand given the Supreme Court’s recent ruling.
Both AT&T and ComEd entered into deferred prosecution agreements with the U.S. attorney’s office, admitting their roles in the schemes to influence Madigan in exchange for prosecutors dropping criminal charges. ComEd also agreed to pay a record $200 million fine, while AT&T was fined $23 million.
Acevedo, meanwhile, pleaded guilty to tax offenses and was sentenced to 6 months in prison in 2022.
jmeisner@chicagotribune.com
