Exelon pledges to change culture, help federal probe
Despite an extraordinary admission of corrupt practices by its ComEd subsidiary, top executives of Chicago-based Exelon said Friday they have rooted out those responsible and are busy reforming the company’s culture.
In agreeing to pay $200 million to settle a federal probe into its lobbying practices, ComEd confessed that, from 2011 through 2019, it provided $1.3 million in payments to associates of Illinois House Speaker Michael Madigan. It said the payments were to curry favor with Madigan over matters important to the utility.
During an interview, Exelon CEO Christopher Crane said the time period in question involved much important legislation. But he said Exelon, upon discovering payments to Madigan allies directed by former executives, worked quickly on reforms.
Crane declined to discuss if the company is providing direct evidence against Madigan, who is not accused of wrongdoing. But the CEO noted the settlement requires ComEd and Exelon to fully cooperate with prosecutors.
ComEd agreed not to ask customers to cover the $200 million. It also agreed to pay the money in two stages over 90 days and not seek reimbursement from any organization other than Exelon.
While it provides power to 70% of Illinois customers, ComEd is just one of six publicly regulated utilities under the Exelon umbrella. Last year, Exelon reported $3 billion in net income on more than $34.4 billion in revenue. In its report for the first quarter of this year, the company said it had $1.45 billion in cash.
Its stock closed Friday at $39.40 a share, up 3.5% despite news of the federal charge.
From 2011 to 2019, “multiple bills were passed that really have been good policy for consumers,” Crane said. “It has allowed ComEd to invest significantly in reliability and allowed ComEd to reduce rates four of the nine years.”
At the same time, he said the company will not condone practices such as routing money to politically favored recipients, often hidden on the payrolls of subcontractors. “We have taken all the corrective actions that we can against anybody that was orchestrating this. They are no longer with ComEd,” he said.
Crane said Exelon is implementing rules and tracking mechanisms for interactions with public officials, vetting and monitoring lobbyists and political consultants, and employment and vendor referrals from public officials. He said the policies will cover all company subsidiaries, not just ComEd.
If ComEd complies with all terms, prosecutors have agreed to drop the bribery charge after three years, although it still must cooperate if the federal probe continues beyond that time.
Crane said despite the tighter scrutiny, ComEd will spend heavily on lobbying when legislative issues warrant.
Crane declined to discuss former ComEd officials implicated in the federal complaint, such as Anne Pramaggiore, who last October retired as senior executive vice president at Exelon. From 2012 to 2018, she was CEO of ComEd. While not identified in the complaint, her identity is clear from the context.
A spokesman for Pramaggiore said she “has done nothing wrong and any inference to the contrary is misguided and false.” His statement continued: “During her tenure, she and other current and former ComEd and Exelon executives received, evaluated and granted many requests to provide appropriate and valuable services to the companies, none of which constitute unlawful activity.”