FirstEnergy to pay $230M in settlement in Ohio bribery case
Published 12:00 am Saturday, July 24, 2021
CINCINNATI (AP) — The energy giant at the center of a $60 million bribery scheme in Ohio admitted to riveting new details of its role in the conspiracy Thursday as part of a settlement agreement with federal prosecutors, including how it used secret dark money groups to fund the effort and paid a soon-to-be top utility regulator to write the legislation it got in exchange.
Akron-based FirstEnergy Corp. is charged with conspiracy to commit honest services wire fraud through bribery or kickbacks under the deal, Acting U.S. Attorney Vipal J. Patel said at a press conference Thursday.
He called the settlement, which requires the company to pay $230 million penalty and continue to fully cooperate with investigators, the largest secured by his office that anyone can recall.
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“If FirstEnergy complies with everything on its end, the charges will be dismissed,” Patel said, adding that if they don’t, the criminal case will resume.
Under the agreement, the firm must also make public any new payments it’s aware of that were intended to influence a public official and continue an internal makeover of its ethics practices. The company will have three years to comply with the settlement.
In a statement, Donald Misheff, FirstEnergy’s nonexecutive board chairman, said the agreement builds on steps the company already has under way, including to “significantly modify our approach to political engagement as we work to regain the trust of our stakeholders.”
The criminal monetary fine of $230 million will be divided up, with half of it going to the federal government and the other half going to a program that benefits Ohio’s regulated utility customers, Patel said. FirstEnergy also has to forfeit certain funds, totaling $6 million, seized from the accounts of a dark money group, Partners for Progress.
FBI Special Agent in Charge Chris Hoffman said the charges resulted from a historic public corruption investigation that “deserves historic remedies.”
“I hope that today’s announcement serves as a stern warning to other corporations and corporate executives who would sell their integrity to a public official, a group of public officials,” he said.
The settlement does not preclude prosecutors from pursuing individuals and applies only to FirstEnergy, Patel said.
The deal, signed by FirstEnergy President and CEO Steven Strah, comes in a scandal that has affected business and politics across Ohio since the arrests a year ago Wednesday of then-Ohio House Speaker Larry Householder and four associates. The government says Householder orchestrated a plan to accept corporate money for personal and political use in exchange for passing nuclear bailout legislation and scuttling an effort to repeal the bill.
In a statement Thursday, Strah said, “Moving forward, we are intently focused on fostering a strong culture of compliance and ethics, starting at the top, and ensuring we have robust processes in place to prevent the type of misconduct that occurred in the past.”
Thursday’s deal requires FirstEnergy to issue a public statement acknowledging the role of dark money groups, known as 501(c)(4) corporations, in the scheme. The statement says the company used them “as a mechanism to conceal payments for the benefit of public officials and in return for official action.”
New details revealed as part of the filing show Partners for Progress appeared to be independent while actually being controlled by FirstEnergy. The company admits to hand-picking the organization’s three leaders, who included Republican Gov. Mike DeWine’s now-top lobbyist Dan McCarthy, and funneling $15 million in FirstEnergy cash through the nonprofit to Generation Now.
FirstEnergy in the last year has fired six high-ranking executives, including CEO Chuck Jones.
A statement of facts filed Thursday said the company paid a public official $4.3 million through his consulting company to further the company’s interests while he worked as Ohio’s top utility regulator, “relating to the passage of nuclear legislation,” and the firm’s other legislative priorities. That official is known to be former Public Utilities Commission of Ohio Chair Sam Randazzo.
Randazzo resigned from the PUCO last November after FBI agents searched his Columbus townhome and FirstEnergy revealed the payment to end a consulting agreement with his company.
Messages seeking comment were left Thursday with Randazzo and the office of Republican Gov. Mike DeWine, who appointed Randazzo to the utilities commission. Neither Randazzo nor Jones have been charged criminally.