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First ComEd, now AT&T fined for corruption: Phone company used bribery to help pass anti-landline legislation

AT&T has been fined $23 million as part of an ongoing federal criminal investigation that revealed the telecom giant’s illegal efforts to help pass legislation that made phone service less reliable and more expensive in Illinois.

AT&T now joins ComEd as the second major Illinois utility caught up in a corruption scandal. ComEd was fined $200 million in July of 2020, and on Friday, Oct. 14, federal prosecutors announced AT&T was fined $23 million.

Like ComEd, AT&T entered into a deferred prosecution agreement. Under this agreement, the charges will be dropped against AT&T in two years if it cooperates with the investigation.

Federal prosecutors say AT&T admitted to paying an associate of former House Speaker Michael Madigan $22,500 to help get legislation passed that opened the door to ending landline service–what has been the most reliable and affordable option for some of Illinois’ most vulnerable customers.

The news was bitter for CUB staffers who remembered when in 2017 AT&T was finally successful in helping to get the anti-landline legislation passed, after CUB and other consumer advocates had for years blocked the company. Consumer advocates argued that “the legislation would leave behind hundreds of thousands of Illinois residents, particularly seniors, who disproportionately rely on traditional landline telephone service for everything from connecting with family to monitoring life-threatening medical conditions,”  the Chicago Tribune reported. 

After AT&T was unsuccessful for years, an executive with the company allegedly issued a “lessons learned” document that said, among other things, that AT&T should act more like ComEd in granting political favors, according to prosecutors.

In 2017, the bill that AT&T fought for was called “Carrier of Last Resort” legislation, which refers to the state requirement that AT&T offer landline service in Illinois to customers in its territory who want it. When the bill first passed in 2017,  then Gov. Bruce Rauner issued an amendatory veto based on concerns about the bill that were unrelated to “carrier of last resort.”  A new version of the bill was again the subject of an amendatory veto by Gov. Rauner, but this time the veto was overridden in the House and Senate and it became law.  

The legislation opens the door for AT&T to end landline service–once it gets final approval from the Federal Communications Commission (FCC).  A few thoughts from CUB:

  • This is another sad example of how low AT&T would stoop to help pass anti-consumer legislation and increase its bottom line. In addition to the $23 million fine, it owes customers a refund.
  • As a consumer advocate, we find this chapter of Illinois history sad and frustrating. If you want a great example of how corruption hurt consumers, this is it. AT&T used bribery to help pass a bad bill that made phone service less reliable and more expensive for some of Illinois’ most vulnerable consumers. We’re encouraged and hopeful that new leadership in Illinois will move the state forward and make it easier for groups like CUB to help pass pro-consumer legislation.

For more info:

The Chicago Sun-Times. 
Crain’s Chicago Business 
The Chicago Tribune 
The Capitol News Service