After conviction, ex-Ald. Ed Burke gets pension bump; former Speaker Mike Madigan now in line for hike before new trial date

Only days after being convicted in a sweeping federal corruption case, former Ald. Ed Burke began the new year by collecting a bigger pension check courtesy of an automatic hike that former House Speaker Michael Madigan is also all but guaranteed to get now that his own corruption trial was recently postponed until fall.

Burke, Chicago’s longest-serving alderman, stands to collect nearly $50,000 this year — half of his new $99,200 annual pension rate — because pensions aren’t cut off for City Hall officials convicted of corruption until they are sentenced, which for Burke isn’t scheduled until mid-June. As a result, Burke received his annual 3% bump right on schedule when the calendar turned to 2024.

Madigan, the longest-serving speaker in American history, meanwhile, will continue to safely collect his roughly $153,400 annual pension thanks to this month’s court win that secured him a six-month delay in his trial. The postponement means Madigan stays on track to get his own automatic 3% pension increase in July, taking his retirement income to $158,000 a year. Had Madigan’s original April 1 trial moved forward as scheduled, a conviction could have prompted his pension payments to be suspended before the increase kicked in.

The cases of Burke and Madigan spotlight how the public pension spigot can take a while to shut off when public officials face legal troubles. And the two Southwest Siders from neighboring wards stand to benefit from the variety of lucrative laws that favor longtime politicians in Chicago and Springfield.

Still, the city and state pension rules for elected officials could play out differently in two major ways for the 80-year-old Burke and Madigan, who turns 82 in April.

Along with the state immediately suspending pension payments once an elected official is convicted or enters a guilty plea rather than when they are sentenced, the state also has a stricter policy than the city pension system for longtime officials like Burke and Madigan when it comes to refunds of personal contributions they paid into the retirement systems.

Despite his conviction, Burke is able to collect hundreds of thousands of dollars from his pension account as a refund for all of the personal contributions he made toward his aldermanic pension. But if Madigan’s convicted, he’s likely to receive no refund for his contributions to the state system. That’s largely because he’s on pace to receive more in pension payments by his October trial date than he’s contributed to the system.

The differences in state pension policies follow Tribune stories that highlighted how some elected officials, including former Republican Gov. George Ryan, had collected hefty pension payments when immersed in long criminal cases and then became eligible for refunds for their own personal contributions once sentenced. The board’s moves sought to restrict the flow of taxpayer-supported pension money when retired politicians’ cases move slowly through the courts.

While more should be done, the board overseeing state elected officials’ pensions has “made progress” in recent years reforming the system, said former Democratic state Sen. Susan Garrett, now the chair of the Center for Illinois Politics.

The state’s changes represent “at least a good sign” and should be followed more widely, said Garrett, whose group is a nonpartisan, nonprofit.

Even so, court cases favorable to retirees dating back decades, including the federal Operation Gambat investigation that uncovered corruption in the old 1st Ward, are viewed as impediments to making taxpayer-friendly changes.

A conviction and a not guilty plea

Burke was convicted Dec. 21 of racketeering and bribery for using his elected office to pressure developers doing business with City Hall to hire his private law firm for property tax appeals.

Only 12 days later, the longtime 14th Ward alderman, who chose not to run for reelection in 2023, automatically started collecting a slightly bigger city pension.

At the beginning of the new year, Burke became eligible for the annual 3% bump, raising his monthly checks to $8,268 from $8,027. And on Jan. 2, the newly adjusted pension payment was deposited directly into his bank account, records show.

Madigan has pleaded not guilty in his racketeering case in which federal prosecutors charge he squeezed jobs and benefits for his political allies from Commonwealth Edison and AT&T as the two major state-regulated utilities sought the powerful speaker’s support for their legislative agendas.

A federal judge set Madigan’s new trial date to Oct. 8 while the U.S. Supreme Court reviews a case from Indiana that challenges the validity of charges that are similar to some of those facing Madigan. He and co-defendant Michael McClain, a former lobbyist already convicted in last year’s high-profile ComEd Four case, have pleaded not guilty in their case.

In supporting Madigan’s defense he played by the rules, his lawyers recently sent a subpoena to his former House speaker’s office for records from 2000 through 2020 of communications discussing potential conflicts of interests, actual votes and times Madigan recused himself on House votes. “These documents may have been referred to as the ‘MJM Vote List,’” the subpoena said, referring to the ex-speaker’s initials.

The subpoena requests communications with Madigan’s longtime law partner, Vincent “Bud” Getzendanner, and several top legislative aides, including the ex-speaker’s legal counsel David Ellis, now an Illinois Appellate Court justice, and former chief of staff Tim Mapes, who was convicted last year of perjury.

Mapes has kept collecting his monthly pension checks since his conviction in August. He also received an automatic increase this month that lifted his annual pension rate to more than $154,000, but officials will review the benefit once he is sentenced, which is now scheduled for next month.

Another politician involved in both the Burke and Madigan cases — former 25th Ward Ald. Danny Solis — is also collecting his pension.

Solis used to be an ally to both Burke and Madigan but became a government mole who secretly recorded both men in the course of the federal government’s investigations. Solis’ phone and video recordings were instrumental in Burke’s conviction, and other recordings Solis made are expected to play a major role in Madigan’s criminal case.

Solis cooperated with federal authorities to try to avoid a conviction for his own misdeeds. Solis has been charged, but his case is expected to be dropped once his cooperation is complete.

As a result, Solis has kept his pension intact, and, like Burke, received an increase in January. Solis is now getting an annual pension worth nearly $110,000.

Political funds paid $11 million in legal costs

While Burke and Madigan are, of course, allowed to defend themselves, their legal fights in federal court showcase how favorable laws give these two formerly prominent politicians a flexibility in their finances that an ordinary citizen could likely not afford.

Burke and Madigan both tapped their political war chests to pay their legal fees — totaling more than $11 million between them — and saved the pair from having to dip into their own pockets to pay defense lawyers.

Many lower-profile defendants often decide to plead guilty and cut deals rather than spend their life savings or go in debt to fight federal charges against them.

Burke has spent more than $3 million out of his campaign funds on legal fees since 2018, state campaign records show.

But Burke not only used those campaign resources for his own legal costs. The Tribune reported Burke also paid hundreds of thousands of dollars from his political funds to cover the costs of co-defendant Peter Andrews Jr., a longtime aide who was acquitted.

State campaign reports showed $220,000 of those payments were labeled as “consulting” fees paid to Andrews, but his lawyers said that money was passed along to them.

Madigan has spent more than $8 million in legal fees from his campaign kitty.

Campaign cash for personal use

While the practice of paying legal fees from a campaign fund is common for politicians, an attempt to curb the spending of campaign money on personal matters has led to two systems — one for old-timers and the other for everyone else.

Burke and Madigan benefit from being among a dwindling number of politicians still eligible to convert campaign funds into cash for themselves.

The benefit arose from a compromise reached in Springfield in the late 1990s as lawmakers and then-Gov. Jim Edgar pushed for reforming the state’s campaign finance laws.

As a way to coax votes from sitting lawmakers who didn’t want to give up their ability to use campaign cash for personal use, the law bifurcated the new restrictions. It grandfathered an exemption for those in office at the time and allowed the incumbents to tap their own campaign funds for personal use up to the amount of money in their political war chests when Edgar signed the legislation into law in 1998.

That option is now outlawed for less senior public officials.

For Burke, the exemption means there are fewer restrictions on how he can spend the $2.45 million he had in his campaign fund on June 30, 1998. At that same time, Madigan held nearly $1.5 million in his campaign funds that he could convert.

Back then, several other politicians actually took out loans to boost the amount of money in their campaign funds that they’d eventually be able to tap for personal matters.

Pension refunds

While both men are allowed to access their old campaign cash, only Burke is eligible for a refund of the money he personally paid into his pension over his 54 years on the City Council.

Burke stands to be refunded about $540,000 even if city pension officials rule him ineligible to receive more monthly pension payments following his June 19 sentencing.

Due to his longevity in city office, Burke is grandfathered out of another law, passed in 2017, that allows the city pension system to deduct how much money a convicted City Hall criminal has collected from how much they put in.

For Madigan, though, the equation is far different. He made $352,345 in personal contributions to the General Assembly Retirement System while serving in the House for just over 50 years. He has already received $339,157 in total benefits since retiring almost three years ago.

By the time his trial occurs, Madigan will have received more in benefits than he put into the system, meaning the state pension board’s policy would not allow him to collect a refund if the former speaker is found guilty, said Tim Blair, the system’s executive secretary.

Legal precedents have been viewed as a roadblock to making similar policy changes in many pension systems.

In various public pension funds, refund policies have long been based on a 2003 Illinois Supreme Court ruling that sided with David Shields, a former Cook County judge convicted of pocketing a $6,000 bribe to fix a case in the Operation Gambat sting.

When the judicial pension system deducted from his refund the amount of money he had received in pension checks, he sued and won a full refund.

Unlike with Burke, whose pension benefits are still flowing, the state legislative pension board will suspend pension payments once any retired lawmakers are convicted of a felony. The board takes final action on forfeiture following an attorney general review.

Legislative pension payments to longtime lobbyist McClain, who previously served in the House with Madigan, were suspended when he was convicted last year.

State Sen. Robert Martwick, the Chicago Democrat who chairs the board of the General Assembly Retirement System, said the policy changes arose in response to state elected officials charged with corruption stretching out the time between a guilty plea or guilty verdict and a sentencing, allowing them to collect many extra pension payments.

Martwick said the board’s policies prevent elected state officials who are expected to lose their pensions from “gaming the system.”

The board overseeing pensions for retired lawmakers and statewide officers established the more restrictive policies in 2015 following a series of Tribune stories highlighting perks and quirks for state elected officials.

In a 6-1 opinion, for example, the Illinois Supreme Court ruled in 2010 that Ryan, the former governor, should forfeit his pension following his 2006 corruption conviction that grew out of a licenses-for-bribes scandal rooted in his two terms as secretary of state and that spilled over with more corruption during his single term as governor.

Still, Ryan was able to collect $635,000 in pension payments during the three years between leaving office and his conviction. He also was able to get back a $235,000 refund for the contributions he’d made to the system over the years.

The lone justice to oppose the ruling to take away Ryan’s entire pension was Anne Burke, who is married to Ed Burke.

Justice Burke, once the chief justice of the state’s high court, maintained that Ryan’s corruption could be connected only to his terms as governor and secretary of state.

In her dissent, she contended there was “no such nexus” to corruption during his time as lieutenant governor or House lawmaker and that his pension benefits for those years should not be disqualified.

Justice Burke, who watched her husband’s trial from a front-row seat in a federal courtroom, is retired and receives an annual state pension of $226,278.

Chicago Tribune’s Dan Petrella contributed to this report.

rlong@chicagotribune.com