Washington D.C., Sept. 28, 2023 —
The Securities and Exchange Commission today charged Exelon Corporation, electric utility company Commonwealth Edison Company (ComEd), which is Exelon’s subsidiary, and former ComEd CEO Anne Pramaggiore with fraud in connection with a multi-year scheme to corruptly influence and reward then-Speaker of the Illinois House of Representatives Michael Madigan. Exelon and ComEd agreed to settle the charges, with Exelon paying a civil penalty of $46.2 million. The charges against Pramaggiore will be litigated.
According to the SEC’s order against Exelon and ComEd, from 2011 through 2019, ComEd arranged for various associates of Madigan to obtain jobs, subcontracts, and monetary payments, all with the intent to influence Madigan regarding legislation favorable to ComEd. The order finds that ComEd arranged payments to Madigan’s associates through third-party vendors to conceal the size of the payments and to assist ComEd in denying responsibility for oversight of Madigan’s associates, who in some instances did little to none of the work for which they were hired. The order finds that ComEd made indirect payments totaling more than $1.3 million to Madigan’s associates. In a deferred prosecution agreement entered into with criminal authorities, ComEd acknowledged that Madigan’s support of legislation favoring ComEd resulted in reasonably foreseeable anticipated benefits to ComEd of more than $150 million.
The SEC’s complaint against Pramaggiore alleges that she participated in, and in some instances directed, the bribery scheme. The complaint alleges that Pramaggiore did not disclose the bribery scheme and instead misled investors when she characterized ComEd’s lobbying activities as legitimate. The complaint also alleges that, as part of the scheme, Pramaggiore lied to Exelon’s auditors and filed false certifications.
“As alleged in our complaint, Pramaggiore’s remarks to investors about ComEd’s lobbying efforts hid the reality of the long-running political corruption scheme in which they were engaged,” said LeeAnn G. Gaunt, Chief of the SEC Enforcement Division’s Public Finance Abuse Unit. “When corporate executives speak to investors, they must not mislead by omission.”
Exelon and ComEd consented to the SEC’s cease-and-desist order finding that they violated antifraud and books and records and internal accounting controls provisions of the federal securities laws. Exelon agreed to pay a $46.2 million civil penalty.
The SEC’s complaint alleges that Pramaggiore violated antifraud and books and records and internal accounting controls provisions of the federal securities laws and that she aided and abetted Exelon’s and ComEd’s violations of books and records and internal accounting controls provisions. The SEC seeks permanent injunctive relief, disgorgement plus prejudgment interest, a civil penalty, and an officer and director bar against her.
The SEC’s investigation was conducted by Natalie Garner, Sally Hewitt, and Kristal Olson of the Public Finance Abuse Unit and Will Saylor of the SEC’s Chicago Regional Office. The investigation was supervised by Brian Fagel. The SEC’s litigation will be conducted by Jonathan Polish. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Northern District of Illinois.