Ex-AT&T Illinois president in big trouble over 'small contract' for Madigan ally — trial starts Tuesday

AT&T Illinois had finally scored a big win in Springfield in 2017, securing legislation that could help save it millions of dollars with the support of then-Illinois House Speaker Michael J. Madigan.

But its victory came only after the utility agreed to pay $22,500 over nine months to a key Madigan ally. And later that summer, Madigan’s son came calling with another financial request. Paul La Schiazza, the utility’s president at the time, griped that “this will be endless.”

“We are on the friends and family plan now,” he told a colleague in an email.

Prosecutors say that quip helps prove the $22,500 amounted to a bribe. But soon, it’ll be up to a jury to decide whether they’re right. La Schiazza faces trial Tuesday on a five-count indictment handed up in October 2022 amid the feds’ larger Madigan prosecution.

Expected to take three weeks, it’s the last of a series of trials set to play out before Madigan faces his own racketeering trial Oct. 8. The once-powerful Southwest Side Democrat is also charged for his role in the alleged scheme involving La Schiazza and AT&T Illinois. The utility previously agreed to pay a $23 million fine.

Other key players in La Schiazza’s case include Madigan’s longtime confidant, Michael McClain, and former state Rep. Edward “Eddie” Acevedo, recipient of the $22,500.

Acevedo, who allegedly did no work for that money, already has gone to prison for tax evasion. McClain faces trial alongside Madigan next month over the AT&T allegations and other charges.

But La Schiazza’s defense attorney argues his indictment is flawed. Tinos Diamantatos has said it “does not allege that Madigan even knew of AT&T’s hiring of Acevedo.” There’s no evidence of a so-called “quid pro quo,” he said, nor that La Schiazza knew he was acting unlawfully.

“Currying favor with a politician or politically influential person is not a crime,” Diamantatos wrote in court filings.

The allegations are strikingly similar to — but simpler than — those at the center of last year’s ComEd bribery trial. A jury in May 2023 convicted McClain, former ComEd CEO Anne Pramaggiore, ex-ComEd lobbyist John Hooker and onetime City Club President Jay Doherty for a nearly decade-long conspiracy to bribe Madigan to benefit ComEd.

Jurors in that case heard that five Madigan allies, including Acevedo, were paid $1.3 million by ComEd over eight years as part of that scheme. However, attorneys for the four defendants are aggressively challenging that verdict in the wake of a U.S. Supreme Court ruling in June.

The high court found that a bribery statute at play in the ComEd, Madigan and La Schiazza cases does not criminalize after-the-fact rewards known as “gratuities.” It made its ruling while considering the corruption conviction of former Portage, Indiana, Mayor James Snyder.

That decision has endangered the ComEd convictions. But U.S. District Judge Robert Gettleman, who is presiding over the La Schiazza case, had the benefit of reading the high court’s opinion before recently denying a motion to dismiss certain counts.

“I don’t think Snyder affected those charges at all,” said Gettleman, who was nominated to the bench by President Bill Clinton in 1994.

Diamantatos has since warned that the back-and-forth involving Madigan’s son — over a potential non-profit donation after key legislation passed — is exactly the kind of activity that can’t be prosecuted under the Supreme Court’s ruling.

Still, much like the ComEd case, the prosecution of La Schiazza could come down to the difference between legal lobbying and corruption.

At the center of the case is a bill AT&T Illinois spent years trying to pass, meant to help end an obligation to provide landline telephone service to all Illinoisans. It was known as its Carrier of Last Resort — or COLR — obligation. AT&T Illinois believed the bill could save it millions of dollars, but it failed to get the bill across the finish line between 2010 and 2015, records show.

Then McClain, who was known in Springfield as an emissary of Madigan’s, reached out to AT&T Illinois in February 2017 asking for “a small contract” for Acevedo, prosecutors say.

Two days after that, McClain allegedly told La Schiazza that Madigan had assigned McClain to work on AT&T’s COLR legislation as a “special project.”

More than a month later, on March 28, 2017, La Schiazza sent an email to two AT&T employees telling them that McClain had called, records show. La Schiazza allegedly asked if the utility had $2,500 or $3,000 a month — for a “small contract” for Acevedo.

That same day, La Schiazza allegedly announced that AT&T Illinois had gotten the “GO order” to hire Acevedo, and he told his employees to “move quickly to get this done.”

But it wasn’t so simple. Republicans warned that hiring Acevedo, a Democrat, would be a “dealbreaker” when it came to the COLR bill, records show. Not only that, but Acevedo was allegedly seen as a partisan who frequented bars at night and became “loose lipped.”

La Schiazza sent an email on March 31, 2017, telling an employee he had no objection to paying Acevedo through an intermediary, instead of hiring him directly, prosecutors say.

“As long as you are sure we will get credit and the box checked, and of course we have legal approval to engage Eddie this way,” La Schiazza wrote, according to court records.

The employees discussed it among themselves by email, those records show. One wrote, “Are we 100% certain that we will get credit for being responsive?”

Another replied, “I would hope that as long as we explain the approach to McClain and [Acevedo] gets the money then the ultimate objective is reached.”

The first responded, “I don’t think [La Schiazza] wants this based on ‘hope.’ We need to confirm prior to executing this strategy.”

The AT&T Illinois employees offered Acevedo the $2,500-per-month consultant role during a meeting at the Illinois State Capitol on April 26, 2017. They told him he’d be working on a report about the internal dynamics of the Latino Caucus in the Illinois General Assembly and the Chicago City Council, records show.

Acevedo balked, ended the meeting and later said he deserved $3,000 a month, prosecutors say.

La Schiazza later told his employees, “I would only go to $3000 if we find that is what it takes to satisfy the other party.” He wrote that the monthly bump would increase the payments to Acevedo by $4,500, and he said “I have to believe we can find $4500 somewhere else if we go over on consulting.”

Prosecutors say the AT&T Illinois officials were later told their original offer was sufficient. But they weren’t told by Acevedo. The message came from McClain, according to the feds. That was April 28, 2017.

AT&T Illinois funneled the money through a firm belonging to lobbyist Tom Cullen, records show. Meanwhile, prosecutors say Acevedo never produced a report.

The COLR bill became law after the state House and Senate voted around July 1, 2017, to override a veto from then-Gov. Bruce Rauner. Madigan voted in favor of the bill, and to override the veto.

Less than two weeks later, on July 12, 2017, La Schiazza was asked by Madigan’s son, Andrew Madigan, to sponsor a non-profit event “at the suggestion of our good friend Mike McClain.” La Schiazza passed the invite along to another AT&T Illinois staffer and said “this will be endless. … this is an FYI only to you.”

“I suspect the ‘thank you’ opportunities will be plentiful,” the staffer replied.

La Schiazza wrote back, “Yep … we are on the friends and family plan now.”

The utility still had other legislative priorities. They included a so-called “small cell bill,” which would set fees for carriers looking to boost their signal with small cell tower attachments.

But the staffer told La Schiazza there was “sensitivity” about whether AT&T Illinois would be “going away” because it got what it wanted with the COLR bill.

“I will emphasize that to leadership,” La Schiazza told the staffer. “Especially if we expect to pass a small cell bill.”