An Illinois-based subsidiary of telecommunications giant AT&T will pay $23 million and revamp its ethics and compliance program following a probe into bribes the company paid attempting to influence the Illinois state legislature.
AT&T Illinois will enter into a deferred prosecution agreement (DPA) to resolve a federal criminal investigation that it paid $22,500 through an intermediary to Michael Madigan, former Illinois Speaker of the House. The company was charged Friday in U.S. District Court for the Northern District of Illinois with using an interstate facility to promote legislative misconduct, according to a Department of Justice (DOJ) press release.
The DOJ will defer prosecution on the charge for two years and seek to dismiss it if AT&T Illinois continues to cooperate with the investigation and implement “a compliance and ethics program designed to prevent and detect violations of U.S. law throughout their operations,” according to the DPA.
Compliance considerations: AT&T admitted in 2017 it arranged for $22,500 to be paid to an ally of Madigan by a lobbying firm that worked on behalf of AT&T in exchange for Madigan’s vote and influence over a bill. The federal investigation also found Commonwealth Edison (ComEd) paid bribes to Madigan; the AT&T agreement led to an additional charge against Madigan and his ally, according to a report from the Chicago Sun-Times.
ComEd paid a $200 million fine and entered into its own DPA with the DOJ in 2020.
As part of its response to the misconduct, AT&T fired employees who participated in the scheme and implemented new compliance polices that tightened internal controls. The new policies, according to the DPA:
- Require internal tracking and reporting of anything of value requested or solicited by, or provided to, public officials;
- Establish due diligence and ongoing monitoring requirements for all third parties engaged in political consulting or lobbying activities;
- Prohibit subcontracting of third-party lobbyists and political consultants without prior written consent;
- Mandate the hiring of all third-party lobbyists and political consultants must be approved by legal and senior management outside of AT&T Illinois; and
- Require ongoing monitoring of all third-party lobbyists and political consultants to ensure they are providing value to the business.”
AT&T also pledged to “adopt a new compliance program, or to modify its existing one, including internal controls, compliance policies, and procedures to ensure that it maintains a rigorous compliance program that incorporates relevant internal controls, as well as policies and procedures designed to effectively deter and detect violations of U.S. law.”
The company’s compliance program must be backed up by “strong, explicit, and visible” support from senior management; must have proper oversight and be led by one or more senior executives; must establish a program for employees to report misconduct internally, including confidentially; must conduct periodic testing of internal controls to ensure they are implemented effectively; and must contain internal controls that include maintenance of records and accounts, according to the DPA.
The company must submit a report to the DOJ within one year describing its remediation efforts and a follow-up report in two years.
AT&T response: “We hold ourselves and our contractors to the highest ethical standards,” an AT&T spokesperson said via email. “We are committed to ensuring that this never happens again.”