Case of former AT&T boss accused of bribing Madigan heads to jury

[September 18, 2024]  By HANNAH MEISEL
Capitol News Illinois
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CHICAGO – On Valentine’s Day in 2017, then-AT&T Illinois President Paul La Schiazza got some good news: After years of trying to push for legislation in Springfield that would save the company hundreds of millions of dollars annually, powerful Illinois House Speaker Michael Madigan had agreed to a sit-down meeting about the issue.

Two days later, La Schiazza got some more promising news in the form of a call from Madigan’s closest confidant, a recently retired veteran Statehouse lobbyist named Mike McClain. After that call, La Schiazza emailed a small group of his colleagues informing them that Madigan had assigned McClain AT&T’s bill as a “special project.”

“Game on,” he wrote.

But in between those two emails, McClain sent a request to one of AT&T’s internal lobbyists asking about a “small contract” for former state Rep. Eddie Acevedo, who was trying his hand at lobbying after 20 years in the General Assembly.

And by the end of April, Acevedo agreed to an arrangement through which he’d eventually collect $22,500 for doing no work as a “consultant” for the remainder of 2017, prosecutors allege.

Now it’s up to a jury to decide whether La Schiazza, who retired from AT&T in 2019, intended that contract as a bribe to Madigan in order to ensure the passage of AT&T’s prized legislation, as the feds have alleged. After sitting through hours of closing arguments on Tuesday, the jury began its deliberation process mid-afternoon and broke for the day before 4:15 p.m.

Before they did, Assistant U.S. Attorney Sushma Raju told jurors that, contrary to La Schiazza’s defense, agreeing to contract with Acevedo was not just an effort to build goodwill with an elected official.

“This was not lobbying, this was not goodwill,” she said in her closing arguments. “It was a crime and Paul La Schiazza knew it.”

But La Schiazza’s attorney Tinos Diamantatos urged the jury to consider what he said were the many holes in the government’s theory, hammering on prosecutors for what he said was their failure to prove a direct link between AT&T’s contract with La Schiazza and Madigan himself, let alone the company’s legislative victory.

“This case is riddled with question marks and it is your duty to find Paul not guilty,” he said.

In retreading their case on Tuesday, lawyers for the government hit hard on emails in which the former AT&T boss and the company’s internal lobbyists discussed the importance of getting “credit” for hiring Acevedo. In one such email, La Schiazza wrote that he had “no objection” to the plan to have Acevedo paid through one of the company’s longtime external contract lobbyists “as long as you are sure we will get credit and the box checked.”

But defense attorneys used their closing arguments to once again highlight that La Schiazza’s sentence about getting “credit” continued on with the caveat that AT&T needed “legal approval to engage Eddie in this way.”

“So ask yourself,” Diamantatos told the jury with an excerpt of the email displayed on screens in the courtroom. “Is this someone who’s acting corruptly?”

In the summer of 2017, AT&T finally won relief from a 1930s-era law that required AT&T to guarantee old-fashioned landline service to the entire state as the “carrier of last resort.”

Maintaining the aging system of copper telephone wires that served an ever-shrinking customer base was a significant expense to the company; one AT&T employee testified that the company sometimes had to scour eBay for replacement parts because the firms that made them went out of business decades ago.

Getting out from under carrier of last resort, or COLR, laws was a nationwide project for AT&T, whose executives would’ve rather invested more in new technologies like broadband and wireless service. By 2017, Illinois and California were the only two states with COLR laws still on the books.

La Schiazza’s defense team maintains AT&T finally achieved COLR relief after a sophisticated yearslong lobbying effort that involved building a coalition support among lawmakers, outside interest groups and, crucially, organized labor.

By getting “credit,” Diamantatos said La Schiazza and his colleagues were referring to building goodwill with Madigan by being “responsive” to a request from the speaker’s close confidant, McClain. What’s more, Diamantatos told the jury, the government presented zero evidence proving that Madigan had instructed McClain to ask for a job for Acevedo.

Diamantatos pointed to testimony from retired AT&T lobbyist Steve Selcke, who said under direct examination from a government lawyer during trial last week that he didn’t believe giving Acevedo a contract in the spring of 2017 had anything to do with the company’s pending COLR legislation.

Former head of AT&T Illinois Paul La Schiazza and former Illinois House Speaker Michael Madigan are pictured in file photos at the Dirksen Federal Courthouse in Chicago. La Schiazza and Madigan are each facing separate charges for their alleged participation in a bribery ring. (Capitol News Illinois photos by Andrew Adams)

And during cross-examination from defense attorneys, Selcke denied that the use of the word “credit” in the emails between himself, La Schiazza and their other colleagues was a sort of “code word” for a bribe.

“Because that’s not what you thought you were doing, was it?” La Schiazza attorney Jack Dodds asked.

“It was not,” Selcke replied.

Selcke instead said AT&T’s government relations team was concerned about being responsive to McClain’s request to give Acevedo a contract in order to “not rock the boat” with Madigan, and that no one – including La Schiazza – believed a contract for Acevedo would change the outcome for COLR legislation.

But during the government’s rebuttal, Assistant U.S. Attorney Tim Chapman told jurors that “what Mr. Selcke believed does not say what the defendant believed.”

And as for La Schiazza’s reference to needing the legal department’s approval to make Acevedo a subcontractor, Chapman said the AT&T lobbyists weren’t discussing whether hiring Acevedo could be viewed as a bribe. Instead, Chapman claimed the colleagues were weighing a technical question about whether it was OK for Acevedo not to register as a lobbyist if he was considered a “consultant” but would be paid under a registered lobbyist’s contract.

That lobbyist, Tom Cullen, also testified in the case, telling prosecutors that he never expected Acevedo to do any work. Both he and Selcke described the meeting where Acevedo was offered $2,500 per month for a nine-month contract with AT&T, where he’d be responsible for completing a report on the political dynamics of the Latino caucuses within both the Illinois General Assembly and the Chicago City Council.

After first balking at the offer and angrily ending the meeting, Acevedo ended up accepting the deal the next day, after prosecutors allege McClain talked him down.

“I suspect the change in tone came as a result of he and Eddie talking,” one AT&T lobbyist wrote in an email reply to the government relations team’s ongoing conversation about the meeting. “The type of behavior demonstrated today would not sit well with him.”

And though Acevedo didn’t accept AT&T’s offer until the end of April 2017, internal company records show La Schiazza had already signed off on increasing Cullen’s monthly retainer so Cullen could pay Acevedo under his contract. And, other emails show, AT&T lobbyists who oversaw the company’s external lobbying team had requested the change in early April – a week after La Schiazza allegedly received a call from McClain about it.

“He accepted his offer on April 28 and he collected a check for a month where he mostly didn’t know he even had a job,” Raju said of Acevedo.

After La Schiazza and the internal lobbyists discussed over email the political sensitivities of directly contracting with Acevedo as a lobbyist, La Schiazza suggested finding alternative work for the retired House member within AT&T, including in some sort of permitting or public safety role.

“This is not a normal discussion a company has when hiring an employee,” Raju said. “The defendant didn’t care at all what Eddie Acevedo brought to the table.”

Diamantatos, however, maintained that the contract for Acevedo was “legitimate,” and whether Acevedo’s ultimate performance in that contract was “good, bad, great or anywhere in between” didn’t matter, as bribery law excludes “bona fide salary, wages, fees or other compensation” from the definition of a “thing of value” necessary for a bribe.

Chapman, however, said Diamantatos’ suggestion “should insult the intelligence” of everyone in the courtroom.

"There was nothing bona fide or normal,” Chapman said of the arrangement to hire Acevedo. “It was smoke and mirrors.”

Capitol News Illinois is a nonprofit, nonpartisan news service covering state government. It is distributed to hundreds of newspapers, radio and TV stations statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation, along with major contributions from the Illinois Broadcasters Foundation and Southern Illinois Editorial Association.