LOVELAND MAGAZINE

News and Events from the Loveland, Ohio Area

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Since 2004

Tag: dark money groups

  • DeWine can’t run from energy bailout bribery scandal as dirty laundry keeps piling up

    DeWine can’t run from energy bailout bribery scandal as dirty laundry keeps piling up


    COMMENTARY

    by MARILOU JOHANEK – Ohio Capital Journal

    Follow the money. Its corrupting influence runs through all the great scandals piling up in Ohio under Republican rule. From the biggest online charter school rip-off of tax dollars to the largest public corruption indictment in state history, money has paved the way to epic wrongdoing under GOP management. Find out who in Columbus is greasing palms, funding campaigns and writing public policy for private interests, and you’ll also discover who is standing in line with their hand out willing to reciprocate with public favors.  

    But when people in high places slip on hubris and expose brazen graft at public expense — and they always do — the swarm of politicians who were only too happy to pocket donor checks and look the other way scatter like insects under a rock that’s been lifted. Republican Gov. Mike DeWine is one of those spooked bugs racing away from his political entanglement in the blockbuster bribery and money-laundering case that goes to trial this year. Three of the four indicted individuals who will be in court on federal racketeering charges — in connection with a billion-dollar ratepayer bailout of two nuclear power plants to benefit FirstEnergy and its affiliates — donated thousands to DeWine’s gubernatorial campaign. 

    So did the Akron-based energy giant at the heart of the bailout scheme. FirstEnergy has legendary pull with pliable politicians. 

    The state’s largest electric utility pumped $1 million into groups backing DeWine in 2018, according to a Dayton Daily News investigation following the money. The company also pumped big bucks into groups helping his daughter’s failed campaign for county prosecutor. DeWine hired multiple administration staffers and advisors with close ties to FirstEnergy, including a former top aide linked to one of the dark money groups implicated in passage of the bailout legislation (House Bill 6) written for and by the utility. 

    The governor also appointed and steadfastly supported Ohio’s former top utility regulator, now accused of profiting in association with the FirstEnergy scandal. DeWine knew of Sam Randazzo’s deep business relationship with the utility when he chose him at the urging of company executives. In a seemingly flagrant quid pro quo, the governor’s pick for the powerful chair of the state utilities commission pocketed a massive sum of money from FirstEnergy just weeks before his appointment. 

    But even damning disclosures of Randazzo’s $4.3 million utility bribe and his blatant efforts on behalf of FirstEnergy — constructing House Bill 6, delaying a company rate case, lobbying for legislation to save the utility millions — didn’t dissuade DeWine from expressing “great confidence” in his regulator. Even after the FBI raided Randazzo’s home as part of the FirstEnergy bribery probe and he resigned under a cloud of suspicion, DeWine praised him for doing “very, very good work as chair.” 

    Perhaps anticipating incredulity with that assessment, the Republican later suggested he was “open” to reforming the process for choosing state utility regulators. Eighteen months on, the DeWine-appointed nominating council that recommends PUCO candidates to the governor includes members tied to passage of the notorious bailout bill. 

    Even after the FBI arrested former House Speaker Larry Householder, who engineered approval of House Bill 6 and was subsequently charged with taking money to pass it, DeWine rejected an effort to repeal the corruption-ridden legislation. 

    “We need balance in our energy,” was all he could say about a bill passed with more than $60 million in bribe money. DeWine reversed himself but reiterated his support for FirstEnergy’s ultimate bribery goal — giving $1.3 billion in public money to two unprofitable nuke plants with new surcharges paid by everyratepayer in the state. 

    He had put the full weight of the governor’s office behind the nuclear bailout bill and signed the corrupt measure into law the very day it passed. The “energy” legislation championed by DeWine also put ratepayers on the hook to bail out two money-losing, hyper-polluting coal plants (one in Indiana) partially owned by other utilities and two FirstEnergy subsidiaries. Plus, the bailout boondoggle the governor couldn’t sign fast enough thoroughly gutted renewable energy and energy efficiency standards and removed all incentive to build more renewable energy projects in the state. 

    Those utility-written provisions have still not been repealed under a 2019 embarrassment that should have been scrapped outright. But the Republican-controlled legislature, complicit in the worst scandal “ever perpetrated against the people of the state of Ohio,” is content to become synonymous with corruption and fleece Ohioans on their monthly electric bills if that makes utility donors happy. The Ohio Manufacturers Association estimated electricity customers will pay a total of $1.8 billion in coal plant subsidies by 2030 — more than the cost of the nuke bailout — unless integrity intrudes on the General Assembly and House Bill 6 is fully repealed. 

    Don’t hold your breath. But remember, this outrage happened on DeWine’s watch and with his blessing. Ohioans didn’t know how crooked House Bill 6 was or how many politicians, including the governor, were willing to look away until federal prosecutors blew the lid off the alleged criminal enterprise to screw ratepayers in return for boosted political careers. DeWine is understandably trying to put as much distance as possible between his reelection campaign and the biggest open investigation of Statehouse corruption in the country. 

    But it’s hard to escape dirty laundry that keeps piling up when you can’t hide under a rock anymore.  

  • Consumer advocate wants to know where utility got $60M from in alleged bribery scandal

    Consumer advocate wants to know where utility got $60M from in alleged bribery scandal

    By Marty Schladen – Ohio Capital Journal

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    Ohio’s official utility watchdog wants to know where Akron-based FirstEnergy got the $60 million that federal prosecutors say fueled the largest bribery scandal in Ohio history.

    The Office of Ohio Consumers’ Counsel on Tuesday evening filed several motions with the Ohio Public Utilities Commission: 

    • A request for an investigation and a management audit of FirstEnergy.
    • A requirement that the company show that it hadn’t misused consumer money to support the passage of a nuclear bailout. 
    • And that the regulator reopen a probe into how FirstEnergy spent money intended to upgrade the electricity grid.

    In July, the U.S. Attorney’s office charged then-House Speaker, Larry Householder, R-Glenford, in an alleged scheme to funnel FirstEnergy money through 509(c)(4) “dark money” groups in a corrupt effort to elect supportive lawmakers and make Householder speaker. 

    The feds say the goal was to pass House Bill 6, a $1.3 billion bailout that went primarily to two failing nuclear power plants, but also subsidized two failing coal-powered generators. In addition, the money was used to fund a xenophobic campaign to stop a voter repeal of HB 6 and to line the pockets of Householder and his alleged conspirators, federal officials said.

    Also charged were Matt Borges, a lobbyist who was formerly chairman of the Ohio Republican Party, Neil Clark, a lobbyist who owns Grant Street Consulting, Juan Cespedes, also a lobbyist, and Householder’s aide, Jeffrey Longstreth.

    In its filing, the consumers’ counsel said it was asking the utilities commission to do its job.

    “The (Public Utilities Commission of Ohio) has the right and duty to regulate public utilities, for the protection of the public,” it said. “The PUCO should require FirstEnergy to show that money it collected from consumers, including the distribution modernization charge money, was not improperly used regarding House Bill 6 and that it did not violate any utility regulatory laws or PUCO orders regarding House Bill 6.”

    A FirstEnergy spokeswoman said her company will comment through official channels.

    “We are unable to comment on pending litigation, but we will respond to the motion by September 23 as required,” External Communications Manager Jennifer M. Young said in an email.

    In its filings, the consumers’ counsel noted that “Long before the House Bill 6 subsidies, FirstEnergy was authorized to charge its consumers nearly $7 billion for these and other FirstEnergy power plants as part of the transition to power plant competition (and a supposed end to future power plant subsidies) under Ohio’s 1999 electric deregulation law.”

    The documents also focused on $465 million FirstEnergy was allowed to collect from Ohio ratepayers in 2017 and 2018 as a “distribution modernization rider.” In other words, the charge was meant to fund improvements to the lines and poles and other equipment needed to efficiently deliver electricity in Ohio.

    The consumers’ counsel pointed to an independent audit showing that at least some of the money was used for other purposes. For example, it was placed in FirstEnergy’s “Regulated Utility Money Pool,” where its out-of-state utilities could borrow from it.

    The dividends FirstEnergy paid shareholders also took a big jump once the company started collecting more from ratepayers, supposedly to improve the power grid. The money for dividends from FirstEnergy’s Ohio utilities went from $141 million in 2016 to $350 million in 2017 — the first year of the subsidy — to $400 million in 2018.

    The Ohio Supreme Court subsequently declared the charge to be unlawful, but the money wasn’t refunded to ratepayers. 

    After the court ruling, the utilities commission shut down an investigation into the extra charge and how the money was used. But now the consumers’ counsel says it “should be reopened in light of the new information alleged in the U.S. Criminal Complaint about FirstEnergy’s use of extraordinary amounts of money in its efforts for the passage of House Bill 6.”

    After other interested parties have a chance to respond to the consumers’ counsel motions the utilities commission will decide whether to approve them.

    Marty Schladen

    Marty Schladen has been a reporter for decades, working in Indiana, Texas and other places before returning to his native Ohio to work at The Columbus Dispatch in 2017. He’s won state and national journalism awards for investigations into utility regulation, public corruption, the environment, prescription drug spending and other matters.