Jurors hear wiretap of McClain describing subcontracts alleged to be bribes

CHICAGO – For nearly eight years, former Chicago Ald. Frank Olivo had a monthly ritual.

The retired politician would sign an invoice for $4,000 – always identical but for the date – that said the money was owed for “services rendered in connection with Commonwealth Edison.”

Most months, Olivo would go to an Office Max in south suburban Crestwood and spend a few dollars to have his invoice faxed to a woman named Jan Gallegos, the longtime administrative assistant to Jay Doherty, who for decades counted ComEd as his most steady lobbying client.

Even when Olivo’s son-in-law eventually began emailing the invoices on his behalf, Olivo would still handwrite a short note to Gallegos on the cover sheets he always included with his faxes. They’d often wish her well and thank her “for all your help!” One note, dated March 31, 2014, seemed to be referencing the temperature rising above 60 degrees that day for the first time in months after a brutally cold winter.

“Jan, it’s springtime?” Olivo wrote in his signature scrawl. “Thanks, Frank.”

By then, Olivo had been receiving monthly checks from Doherty for 2 ½ years. But federal prosecutors allege Olivo never did any work for the payments, which continued through April of 2019. Instead, the government alleges, Olivo was one of several subcontractors connected with former Illinois House Speaker Michael Madigan whom ComEd indirectly paid through Doherty’s firm as part of a yearslong bribery scheme in exchange for favorable legislation in Springfield for the utility.

A few weeks after the date on Olivo’s last $4,000 check, FBI agents raided Doherty’s downtown Chicago office, searching for documents related to the former alderman and other do-nothing subcontractors, while a separate squad of agents searched Olivo’s home in Palos Heights.

A federal jury on Thursday heard from agents involved in those searches – both of whom said they found no evidence of work product Olivo or the other subcontractors did on behalf of ComEd.

Among the items the agents seized in both searches were Olivo’s many fax cover sheets, two of which included similar handwritten messages to Gallegos that revealed just how little he was in contact with the man whose name was on his monthly checks: “Say hello to Jay.”

Olivo has not been charged with a crime, nor have the other subcontractors. But Doherty last year was convicted of orchestrating the Madigan bribery scheme along with two other ex-ComEd lobbyists and the utility’s former CEO.

And for the last month, the “ComEd Four” case has been reprised as part of Madigan’s bribery and racketeering trial at the Dirksen Federal Courthouse in Chicago. Standing trial alongside the former speaker is Mike McClain, ComEd’s top contract lobbyist in Springfield and longtime friend and advisor to Madigan.

The jury has already heard wiretapped phone calls in which McClain describes himself as Madigan’s “agent” and says the speaker was his “real client” after a decadeslong career of contract lobbying for a portfolio of clients, ComEd chief among them.

Thursday marked the end of six days on the witness stand for star government witness Fidel Marquez, a ComEd executive-turned-FBI mole who secretly video recorded conversations with his colleagues, including McClain.

In several of those videos, shown to the jury last week, McClain can be heard explaining the Doherty subcontractor arrangement, including one where he characterizes it as a “favor.” In another secretly recorded meeting, Doherty counseled Marquez to try to keep the contracts as-is to “keep Madigan happy.”

While attorneys for the former speaker used cross-examination of Marquez to try to distance Madigan from McClain, the jury heard more intercepted phone calls on Thursday aimed at undercutting that narrative.

In one February 2019 conversation, McClain and former ComEd lobbyist John Hooker discussed having come up with the subcontractor arrangement in 2011, starting with Olivo. By the time of the call, Doherty had spent years paying three other Madigan allies under his contract, while other lobbyists close to Madigan had also taken on two of the do-nothing contractors for periods of time.

“We had to hire these guys because Mike Madigan came to us,” McClain told Hooker. “It’s just that simple … So if you want to make it a federal court suit, okay, but that’s how simple it is.”

Hooker agreed, asserting that the arrangement was “clean for all of us.”

“Right. We don’t have to worry about whether or not – I’m just making this up – whether or not Mike Zalewski Sr., is doing any work or not,” McClain said, referring to a former Chicago alderman who’d been put on Doherty’s contract the summer before, after he’d retired from the city council. “That’s up to Jay Doherty to prove that.”

In another wiretapped call 10 months earlier, McClain and Hooker discussed Madigan’s request to add Zalewski to Doherty’s roster.

“That has paid off for us in the past, Michael. It took me and you to think of that, though,” Hooker said. “I think he (Madigan) thought I might have been crazy when I suggested that.”

Hooker was also convicted alongside McClain, Doherty and ComEd’s former CEO Anne Pramaggiore in last year’s “ComEd Four” trial.

Attorneys for the defendants are fighting their convictions in light of a U.S. Supreme Court decision this summer that narrowed the federal bribery statute to exclude “gratuities” – rewards given to a public official after he or she takes an “official act.” The ruling also stipulated that “for a payment to constitute a bribe, there must be an upfront agreement to exchange the payment for taking an official action.”

Prosecutors did not present evidence of an explicit quid pro quo handshake deal, instead relying on a “stream of benefits” legal theory in which a pattern of corrupt exchanges over a long period of time is proof enough. But in a motion filed Thursday, lawyers for the ComEd defendants wrote the jury that convicted their clients was “wrongly instructed” and urged the judge to “end this case now.”

Also on Thursday, attorneys for former AT&T Illinois President Paul La Schiazza presented arguments for acquittal after a jury deadlocked on whether La Schiazza bribed Madigan in a similar scheme to ComEd’s, albeit smaller. In the hearing, lawyers debated whether an explicit agreement to an exchange was required to prove bribery in the case.

Five floors down from where those arguments were taking place in the courthouse, Madigan attorney Tom Breen tried to inject the same legal theory into his final questions to Marquez, who was most often the person dealing with job recommendations McClain brought to ComEd on Madigan’s behalf.

“You always maintained that in this situation, these jobs, these situations, whatever, there was no quid pro quo entered into, correct?” Breen asked.

“We did these favors so Madigan would be favorably disposed to our legislative agenda,” Marquez said after a bit of back-and-forth.

“Was there ever a quid pro quo? And you know what that means – " Breen asked before prosecutors objected to the question, ultimately leaving it unanswered.

The issue came up in yet another February 2019 recording the jury heard Thursday, in which McClain, Pramaggiore and Hooker discussed the need for someone to finally replace McClain in the role he’d retired from more than two years prior.

McClain had served as ComEd’s top external lobbyist and had always been formally assigned to lobby Madigan. But company executives also knew that McClain had a longstanding relationship with the speaker and would act as his emissary, communicating messages between ComEd and Madigan, whether on legislation, job recommendations or other matters.

In retirement, however, McClain was not in Springfield as much as he used to be, while ComEd had also undergone significant leadership changes. Pramaggiore, who’d spent years cultivating relationships with McClain and Madigan, had been promoted to a job leading ComEd parent company Exelon Utilities the previous summer, leaving new CEO Joe Dominguez at the helm. Dominguez was new to Chicago and was a former federal prosecutor – both of which made McClain wary of entrusting him to act on requests from the speaker.

“Joe – I don’t think he really respects Madigan,” McClain said. “So I wouldn’t trust Joe. I would trust Joe to think that this is a quid pro quo and that he’s wired.”

Still, McClain offered to have a “daddy talk” with Dominguez.

“My instinct is that I come up to Chicago and I sit down with Dominguez and say, ‘Now look-it asshole, if you want to pass this bill, this is what it requires,’” McClain said. “‘If you wanna fire me today that’s fine but this is like serious business, it’s millions of dollars. So either you wanna look like you’re the leader, and be the leader, but that means you’ve gotta authorize your people to do things.’”

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