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Tag: House Bill 6

  • FirstEnergy gave heavily to Trump and Trump worked for a federal bailout, report says

    FirstEnergy gave heavily to Trump and Trump worked for a federal bailout, report says

    The Republican presidential nominee, former President Donald Trump. (Photo by Win McNamee/Getty Images)

    By:  – Ohio Capital Journal

    As it sought a massive, corrupt bailout in Ohio, Akron-based FirstEnergy also spent lavishly on Trump-aligned dark money groups and at hotels and golf courses owned by the former president, a new report said this week.

    Trump and his aides wanted to provide a federal bailout for the company’s coal and nuclear plants, but they hit a brick wall — first in the form of a regulator, and then by public opposition to corporate bailouts, the report said.

    Done by the Energy and Policy Institute, the report is a deep dive into otherwise-secret records that have been pried out as a result of prosecutions and litigation around the Ohio bailout scandal. Called one of the biggest bribery scandals in Ohio history, FirstEnergy funneled $61 million through dark money groups to pass a $1.3 billion ratepayer bailout through the state’s gerrymandered legislature and then protect it from popular opposition.

    Former Ohio House Speaker Larry Householder is serving a 20-year federal prison sentence as a consequence of his involvement, former state Republican Party Chair Matt Borges is serving five years and two others have pleaded guilty and await sentencing. Two others were charged and then died by suicide.

    Former FirstEnergy CEO Chuck Jones and Vice President Michael Dowling face state felony charges related to their involvement in the scandal. Testimony during last year’s federal trial in Cincinnati showed that the pair were desperate for a bailout anywhere they could get one.

    FirstEnergy was heavily invested in coal and nuclear generation when the natural gas boom and the advent of cheap renewables made them uncompetitive. In other words, FirstEnergy’s millionaire leaders had made poor business decisions, and they wanted to escape the consequences.

    So by 2016, the executives were seeking bailouts to prop up the plants so they could spin them — and their environmental liabilities — off.

    Starting in 2015, FirstEnergy had already contributed $1.25 million to the Cleveland Host Committee to support the 2016 Republican National Convention in that city.

    Then, nine days after Trump became the party’s nominee, FirstEnergy CEO Jones met on July 28, 2016 with Trump at Trump Tower. The two discussed electricity generation and how Trump could deliver on his “promise to save coal jobs,” according to a letter the Energy and Policy Institute obtained.

    Some time after, Jones met Trump at a Canton fundraiser where Jones “did explain to Mr. Trump that while I was working behind the scenes to help his campaign, because of a (regulatory proceeding) in Ohio I could not be out front and he completely understood that,” Jones said in an email detailed in the report.

    Trump’s campaign didn’t respond to questions for this story.

    By late 2016, Jones and Dowling were courting Householder at World Series games in Cleveland. And after Trump’s election, they flew the now-imprisoned former speaker to Washington, D.C. aboard FirstEnergy’s corporate jet for Trump’s January 2017 inauguration.

    By April 2017, FirstEnergy had engaged Avenue Strategies — a lobbying firm founded by former Trump Campaign Manager Corey Lewandowski — to help it get “federal relief for nuclear and coal-fired plants,” the Energy and Policy Institute report said. The following month, Lewandowski stepped away from the firm amid accusations that he was violating federal lobbying laws by not registering, Politico reported.

    Lewandowski, who is again working for Trump, later denied that he lobbied on FirstEnergy’s behalf.

    On May 1, 2017, FirstEnergy started really putting money into its efforts, paying $5 million to America First Policies, a 501(c)(4) dark money group founded and run by supporters of Trump. The company financed its bribes in Ohio by pumping tens of millions through such groups, which don’t have to disclose their donors.

    As Jones undertook his charm offensive, he used FirstEnergy money to enrich Trump personally. His expense reports show that on a July 2017 trip to Washington, D.C., Jones spent $1,400 on drinks, another $5,400 for dinner and $900 for a room at the Trump International Hotel, as well as $400 on caddie fees at the Trump National Golf Club.

    And as he spread around the FirstEnergy largesse, Jones had broad interactions with Trump officials. They include Vice President Mike Pence, EPA Administrator Scott Pruitt, Chief of Staff Rick Dearborn, Chief Strategist Steven Bannon, White House Counsel Don McGahn, Energy and Environmental Policy Advisor Mike Catanzaro, and National Economic Council Director Gary Cohn and Deputy Director Jeremy Katz, according to documents assembled by the Energy and Policy Institute.

    To save FirstEnergy’s power-generating subsidiary from bankruptcy, then-Energy Secretary Rick Perry in September 2017 proposed to allow special subsidies for coal and nuclear plants.

    The Federal Energy Regulatory Commission rejected the proposal in early 2018, saying allowing it would upend wholesale markets for electricity generation. In other words, the regulator said it would give unfair special treatment to FirstEnergy and other companies that missed the boat on fracking and renewables.

    In June 2018, Trump ordered Perry to use a provision in the Defense Production Act to prop up coal and nuclear energy — a step that could cost as much as $11 billion a year. That effort also collapsed as the (correct) public perception grew that both measures proposed by the Trump administration were corporate bailouts, the Energy and Policy Institute report said.

    In 2018, Perry called on the states to bail out their own coal and nuclear plants.

    Ohio did just that with the corrupt House Bill 6. Householder shepherded it through Ohio’s gerrymandered legislature and Gov. Mike DeWine signed it immediately.

    Prosecutors haven’t accused them of wrongdoing, but DeWine, Lt. Gov. Jon Husted, Attorney General Dave Yost and Secretary of State Frank LaRose all played roles in the passage and protection of the billion-dollar bailout that they haven’t fully explained.

    For its part, FirstEnergy entered into a deferred prosecution agreement with the Justice Department, admitted wrongdoing and paid a $230 million fine. It fired Jones and Dowling and now says it has new ethical standards.

    However, a group of institutional investors suing the utility accuse it of trying to limit accountability to the two former top executives, Jones and Dowling.

    FirstEnergy spokeswoman Jennifer Young was asked whether FirstEnergy thought it was proper to enrich Trump-aligned groups and Trump personally as it sought taxpayer bailouts from his administration. She was also asked whether it was proper for a regulated utility to — as Jones claimed — play political kingmaker for the ratepayers the utility serves.

    “While we’re unable to respond to your specific questions due to ongoing litigation, it’s important to note that in early 2022, FirstEnergy Corp. adopted a new Political & Public Engagement Policy and Practice grounded in integrity and transparency to ensure principled political and public policy engagement by its Board of Directors, officers, employees, and those acting on the company’s behalf,” Young said in an email. “Positions we take will align with the company’s core values and responsibilities to shareholders and other stakeholders.”

    She added, “Led by a reconstituted Board of Directors and executive team, FirstEnergy has taken significant steps to move the company forward and put past issues behind us. Today, FirstEnergy is a different, stronger company with a sound strategy, a highly effective compliance program and a companywide culture of ethics, integrity and accountability.”

    Marty Schladen
    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.

    Ohio Capital Journal is part of States Newsroom, the nation’s largest state-focused nonprofit news organization.

    MORE FROM AUTHOR

  • Ohio Attorney General Dave Yost settles with FirstEnergy for $20 million

    Ohio Attorney General Dave Yost settles with FirstEnergy for $20 million

    Ohio Governor Mike DeWine (left) and Ohio Attorney General Dave Yost (right) answer questions during a press conference. (Photo by WEWS).

    Unannounced amount dwarfed by scale of epic utility ripoff that featured more than $61 million in bribes and a $1.3 billion bailout

    By:  – Ohio Capital Journal

    Ohio Attorney General Dave Yost has agreed to settle the largest bribery and money laundering scandal in state history with the massive utility that funded it.

    At just $20 million, the settlement amounts only to less than a third of the bribes Akron-based FirstEnergy paid and it is dwarfed by the benefits Ohio utilities have received from ratepayers as a consequence of the corrupt legislation those bribes paid for.

    Yost’s office sends out frequent press releases, but not one regarding Monday’s settlement, which was first reported by the Cincinnati Enquirer, citing an SEC filing by FirstEnergy.

    In response to questions, his office said Yost had “voluntarily walled himself off from the case months ago to avoid any suggestion that the case was politically driven or any outcome was influenced by politics or political decision making.” But it didn’t explain how.

    The statement comes after more than a year of questions about the attorney general’s own involvement in the fight to pass and protect the $1.3 billion ratepayer bailout that mostly went to FirstEnergy.

    Yost’s office added that the company was cooperating in state prosecutions of two former executives, and that the company had reformed in the years since the scandal.

    “The non-prosecution agreement signed between FirstEnergy, the Ohio Attorney General’s Office and the Office of the Summit County Prosecuting Attorney requires FirstEnergy to provide evidence, access to witnesses and testimony in the ongoing criminal cases against (former CEO) Chuck Jones and (former Vice President) Michael Dowling, as well as in civil proceeding relating to the passage of” the corrupt bailout bill, spokesman Steve Irwin said in an email.

    By agreeing to the pact, FirstEnergy won’t be charged criminally. The company paid the federal government $230 million in 2021 to get criminal charges dropped in that instance.

    In dropping the charges, the state and federal governments allowed FirstEnergy to dodge a big financial hit. Consultants told the company it could face nearly $4 billion in fines if indicted, the Cleveland Plain Dealer reported Tuesday.

    According to weeks of testimony in federal court in Cincinnati last year, FirstEnergy executives began wooing Larry Householder and other state leaders in late 2016. The executives had bet heavily on coal and nuclear generation that was losing money because they failed to anticipate that the fracking boom would make gas-fired electricity generation cheaper.

    So the executives — CEO Jones and Vice President Dowling — undertook a frantic search for a bailout.

    They flooded $61 million in corporate money into 501(c)(4) dark money groups. From there, the money went to elect friendly Republicans who would vote to make Householder speaker of the Ohio House at the start of 2019.

    From that perch, Householder shepherded the corrupt bailout, House Bill 6.

    Sam Randazzo, Gov. Mike DeWine’s pick to chair the Public Utilities Commission, helped write and lobby for the bailout even though he was supposed to be a neutral regulator. FirstEnergy later said it paid a $4.3 million bribe to Randazzo, who died by suicide in April.

    DeWine, whose administration had several senior officials connected to FirstEnergy, signed the bill the same day that it passed. But it ran into instant opposition in the form of a fierce campaign to repeal the bailout.

    The FirstEnergy executives — who are now under state indictment — were so alarmed at the repeal effort that they put up $36 million to stop it. The resulting campaign included false, xenophobic TV commercials, bullying people gathering signatures to put a repeal on the ballot and even allegations of assault.

    Yost gave HB 6 supporters a big assist in the heat of the repeal fight.

    Before a repeal could go on the ballot, supporters had to gather 1,000 valid signatures from registered voters and submit a ballot summary to the attorney general. Yost had to approve that before repeal advocates could start gathering the necessary 265,000 additional voter signatures. And they had just 90 days after DeWine signed the corrupt bailout on July 23, 2019 to do it.

    The summary and 1,000 signatures were submitted within 10 days. But then Yost rejected the ballot language on the first go-round. By the time they had submitted different language and more signatures — and Yost approved it — their time to gather more than a quarter-million signatures had been cut by 40% and the repeal failed.

    While Yost — a hopeful to become governor in 2026 — hasn’t commented on his conduct during this period, some of the conspirators did.

    During last year’s trial, federal prosecutors presented messages between former Ohio GOP Chairman Matt Borges, who is serving a five-year prison sentence for his involvement, to Juan Cespedes, who has pleaded guilty to his.

    In one, Borges said the attorney general told him that he thought the bailout was a bad law, but he wasn’t speaking publicly as a favor to Borges and FirstEnergy. Yost “‘would be out front (in opposition) if not for (FirstEnergy) support and your involvement,’” Borges quoted Yost as supposedly saying.

    In another, Borges — who had run some of Yost’s past campaigns — said of the repeal summary, “If there’s any way the law will allow him to reject the language, he will do it.”

    Irwin, Yost’s spokesman, justified the settlement by saying FirstEnergy had reformed.

    “FirstEnergy today is not the company it was five years ago – the corporation has undertaken, and continues to undergo, reforms to strengthen its internal ethics programs, to increase transparency, and promote reporting of questionable conduct by its employees and leadership,” Irwin said. “It has also restructured its board and leadership to remove the individuals responsible for the conduct that gave rise to the House Bill 6 scandal. This is an important step in bringing the disgraced corporate leaders who used their positions of power to betray FirstEnergy’s ratepayers and employees and the people of Ohio to account for their crimes.”

    However, institutional investors are in court arguing that FirstEnergy is trying to limit the blast radius of the scandal. They accuse the company of trying to protect other executives and board members who might have been culpable — or at least might have known of the scheme.

    Indeed, the company is battling furiously not to turn over an internal investigation it commissioned in the wake of the scandal. After being denied an attempt to appeal an order to turn it over, the company filed a risky petition for a writ of mandamus on July 30.

    After the HB 6 scandal broke in 2020, Yost donated $24,000 in contributions from FirstEnergy and Cespedes to charity. It’s an open question when he’ll explain what he knew and did in a scandal that imprisoned Householder for 20 years and led to two suicides — including that of indicted lobbyist Neil Clark.

    Meanwhile, ratepayers are still paying big money as a consequence of HB 6. Its provisions solely benefitting FirstEnergy were repealed after the scandal broke. But the state’s leadership has refused to repeal the rest of the bill.

    It includes a measure that has so far paid $343,000,000 to subsidize two aging coal plants owned by a group of Ohio utilities. One’s not even in Ohio.

    Marty Schladen
    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.

    Ohio Capital Journal is part of States Newsroom, the nation’s largest state-focused nonprofit news organization.

    MORE FROM AUTHOR

  • Moreno blasted rivals over scandal. Now he’s welcoming a big player’s support

    Moreno blasted rivals over scandal. Now he’s welcoming a big player’s support

    (From left) Sec. of State Frank LaRose, Bernie Moreno, and state Sen. Matt Dolan, R-Chagrin Falls, on the debate stage before the March primary. (Debate pool photo courtesy of WCMH-TV.)

    BY:  – U.S. Sen. Sherrod Brown

    During the GOP U.S. Senate primary, Cleveland businessman Bernie Moreno went after his opponents over their connections to the biggest bribery and money-laundering scandal in Ohio history.

    But now he’s welcoming the support of a man who brokered what was perhaps the key relationship in a scheme in which Akron-based FirstEnergy paid $61 million to purchase a $1.3 billion bailout that fell on the backs of ratepayers — which is to say everyday Ohioans.

    The supporter, Cleveland businessman Tony George, invited a now-convicted lawmaker to travel on FirstEnergy’s private jet to Donald Trump’s 2017 inaugural, and booked the lawmaker and FirstEnergy executives into the same hotel for days of events during which federal prosecutors say the conspiracy began. George was still communicating with the central players in 2020, when the FBI started making arrests.

    When asked to comment on the seeming hypocrisy, Moreno’s campaign didn’t respond directly. It instead attacked his Democratic opponent, incumbent Sen. Sherrod Brown.

    Crooked bailout

    A political newcomer, Moreno in March sailed past his more-experienced opponents buoyed by the endorsement of former President Donald Trump.

    Moreno was once a harsh Trump critic, calling him a “lunatic” and a “maniac.” But as with Ohio Sen. — and vice-presidential hopeful — J.D. Vance, Moreno got into politics and turned into an ardent supporter of Trump, who is now a convicted felon.

    Moreno might have experienced a similar conversion when it comes to 2019’s corrupt bailout law, House Bill 6.

    In a Spectrum News 1 debate on Feb. 19, Moreno went after his Republican opponents, State Sen. Matt Dolan and Secretary of State Frank LaRose.

    Dolan in 2019 voted for HB 6, but then later said he supported a full repeal.

    LaRose, Ohio’s top elections official, provided “private” information to FirstEnergy CEO Chuck Jones during a brutal-but-successful war to stop a repeal of the bailout, according to text messages from Jones that were presented during a criminal trial last year. LaRose at first refused to comment on the messages. Then last July, he said he didn’t recall conversations with Jones and others involved in the scandal.

    As a result of the bailout conspiracy, former House Speaker Larry Householder, R-Glenford, last year received a 20-year prison sentence and former Ohio Republican Party Chairman Matt Borges was sentenced to five years. Jones and former FirstEnergy Vice President Michael Dowling were charged by state authorities earlier this year.

    About 19-and-a-half minutes into February’s GOP Senate debate, LaRose attacked Moreno over what LaRose said was Moreno’s support for government subsidies of wind and solar energy. Moreno swung back with HB 6, the corrupt bailout law.

    “I was against HB 6,” Moreno said. “These guys weren’t. They’re going to have to answer for their involvement in that scandal to a different audience than the one that’s here tonight.”

    Moreno took another swing at Dolan on April 30, when he took to X to say.

    “@dolan4ohio was the most helpful member to pass the CROOKED and CORRUPT FirstEnergy Bailout Bill! Matt is a GUARDIAN for the Left Woke Mob and the Swamp but not the people of Ohio,” he said.

    Support from “Individual B”

    That last sentence was an apparent swipe at the Dolan family’s ownership of Cleveland’s baseball team. In 2021 it changed its name from the Indians to the Guardians in response to Native American protests — to the fury of some of its fans.

    But as for Moreno’s problems with figures who were involved in the bailout scandal, they appear to extend only to his political opponents — not his supporters.

    On May 16, his campaign held a Bourbon With Bernie fundraiser in Mentor. Cleveland businessman Tony George was a host, a privilege for which George paid $2,500.

    In addition to being a Moreno supporter, George has had a long and lucrative relationship with FirstEnergy. Entities linked to George received nearly $11 million from FirstEnergy over the years, according to a state audit.

    Unlike FirstEnergy’s two top executives, Gov. Mike DeWine’s nominee to the Public Utilities Commission, Householder, Borges and three others, George has not been charged in the conspiracy, and there’s been no public indication that state or federal authorities plan to.

    But George’s role was substantial enough that he was called “Individual B” in FirstEnergy’s deferred prosecution agreement — a document in which the utility copped to its culpability for the bribery scandal, along with paying out $230 million. It lays out Individual B’s close relationship with FirstEnergy’s top executive and to Householder from the fall of 2016, when Householder was plotting his return to the House and then to regain the speaker’s gavel.

    During his trial, Householder implausibly testified that during the 2016 World Series, he randomly wandered into the FirstEnergy luxury box at Cleveland’s Progressive Field. Raising doubts that his visit was just happenstance, the deferred prosecution agreement includes a message from Jones, the FirstEnergy CEO, to George on Nov. 5, 2016 — just three days after Game 7 of the World Series.

    “Pass on to (Householder),” Jones said. “When we were talking on (Wednesday) I told him there was gonna be a sense of urgency (for a bailout) but couldn’t tell him all the details. If we don’t move on some type of supplant (sic) in (the) first half of 2017 it will be too late. These (nuclear) plants will be shut, sold, or bankrupt. I don’t have any contact info for him.”

    George responded, “He’s more than ready to craft something,” federal prosecutors said in closing arguments in Householder’s trial.

    Expensive junket

    The following January, George invited Householder — and flew with him, Householder’s son and FirstEnergy Vice President Michael Dowling — on the FirstEnergy jet to the Trump inaugural. George also booked Householder and then-CEO Jones into the same DC hotel.

    What followed were days of swanky steak dinners and other events during which prosecutors said the bailout scheme was hatched.

    FirstEnergy’s deferred prosecution agreement, or DPA, says that George continued as a conduit between Householder and Jones until 2020, when Householder was arrested.

    Before the feds brought the hammer down, Jones, George and Householder were plotting to change the Ohio Constitution so Householder could continue as speaker for another 16 years. That would have allowed them to continue to increase electricity rates and use the resulting dark money to dominate Ohio government in ways not calculated to benefit ratepayers, or the public at large.

    The DPA includes messages between Jones and George on Feb. 28, 2020. Jones referred to Householder as “an expensive friend,” but said it would be valuable to keep him in his position of power because, as Householder said, he could “get a lot done in 16 years.”

    George agreed, saying, “Probably more than 5 previous Speakers combined.”

    Then, George added, “He will make Ohio great again.”

    Response

    The Moreno campaign this week declined to answer questions about these matters on the record.

    It was asked whether Moreno was aware of George’s involvement in the HB 6 affair when Moreno accepted George’s support. It was also asked if Moreno would return George’s money and decline support in the future.

    Communications Director Reagan McCarthy responded by asking in an email, “When is Sherrod Brown going to return the donations made to his campaign over the years including when FirstEnergy admitted it was bribing public officials?”

    In fact, Brown donated the $21,000 he’d received from FirstEnergy over the years to Ohio food banks within 10 days of Householder’s 2020 arrest, according to Federal Election Commission records provided by the Brown campaign.

    “While Bernie continues to actively fundraise with key players of the FirstEnergy bribery scandal, days after the FirstEnergy scandal was revealed, the Friends of Sherrod Brown campaign donated FirstEnergy contributions to local food banks across the state,” a spokesperson said in an email.

    Marty Schladen
    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.

    Ohio Capital Journal is part of States Newsroom, the nation’s largest state-focused nonprofit news organization.

    MORE FROM AUTHOR

  • FirstEnergy gave $1 million to boost Ohio Lt Gov Husted’s campaign before scandal, document shows

    FirstEnergy gave $1 million to boost Ohio Lt Gov Husted’s campaign before scandal, document shows

    Records show Jon Husted worked behind the scenes to bail out the company’s nuclear power plants. The million dollar donation was secret — until now.

    BY:  AND 

    Versions of this story were published by Floodlight, Energy News Network and the Ohio Capital Journal.

    A surge in FirstEnergy political spending ahead of the utility’s push to secure a legislative bailout for its nuclear power plants included a $1 million dark money contribution to support the campaign of Ohio Gov. Mike DeWine’s eventual running mate.

    The previously unreported gift linked to Lt. Gov. Jon Husted’s 2017 primary bid was revealed as part of a raft of documents obtained under Ohio’s public records law by a coalition of news organizations, including Floodlight, Energy News Network, and the Ohio Capital Journal.

    Among the documents are company emails describing behind-the-scenes efforts by Husted to persuade DeWine to support House Bill 6, the utility-backed legislation at the heart of the state’s ongoing $60 million public bribery scandal.

    Neither Husted nor DeWine, whose campaign also benefited from a previously reported $1 million in dark money from the utility, has been implicated in the scheme in which eight people, including the state’s former House Speaker Larry Householder, have been indicted.

    Two of those charged in the multi-million-dollar scandal surrounding the passage of HB 6 may have taken their own lives, including Sam Randazzo, the former chairman of the Public Utilities Commission of Ohio, who was found dead earlier this week of an apparent suicide.

    ‘Confidential’ email details campaign gift

    One of the documents from the Office of the Ohio Consumers’ Counsel Office is a spreadsheet attached to a January 2020 message labeled “confidential.” It shows $1 million went from FirstEnergy to the conservative group Freedom Frontier in 2017, with “Husted campaign” noted as the reason.

    That group backed Husted during his 2017 primary campaign for governor. The group then supported DeWine after Husted dropped out of the race to become his running mate.

    Husted is considered among possible front runners for the Republican nomination for governor in 2026. A January report by the Jon Husted for Ohio campaign committee shows it got roughly $1.7 million last year.

    Husted was also dubbed the “‘Golden Boy’ for FirstEnergy” by lobbyist Neil Clark, a co-defendant with Householder and others in the federal government’s criminal corruption case. Clark died by suicide in 2021.

    In several of the recently released records, Husted is mentioned in the same breath as Householder, the convicted House speaker, and Randazzo, the former PUCO commissioner, by FirstEnergy leadership as they sought to pass and then defend HB 6, the nuclear and coal bailout law at the heart of Ohio’s ongoing corruption scandal.

     FirstEnergy records released via public records request show how executives at the power company relied on Ohio Lt. Gov John Husted and convicted former House Speaker Larry Householder to help them pass a $1.3 billion nuclear bailout bill. 

    Husted has maintained that his support for the 2019 law stemmed from his belief that nuclear energy is an important part of Ohio’s energy portfolio. Parties in HB 6-related shareholder litigation have subpoenaed Husted to answer questions under oath, although a new date needs to be set.

     FirstEnergy records released via public records request show how executives at the power company relied on Ohio Lt. Gov John Husted and convicted former House Speaker Larry Householder to help them pass a $1.3 billion nuclear bailout bill. 

    “The Husted campaign never received this donation and is not affiliated with any of these groups,” said spokesperson Hayley Carducci. By law, candidate campaigns are not supposed to coordinate with groups like Freedom Frontier, which can spend unlimited amounts to support or attack them.

    The document and others reflect a major commitment by FirstEnergy to Husted’s political future. Before 2017, the company’s reported political spending to support Husted was less than $25,000 per campaign, according to data from OpenSecrets.

    Dark money spending rises sharply

    More broadly, the document also indicates a major increase in FirstEnergy’s political spending through nonprofit groups exempt from taxes under Section 501(c)(4) of the Internal Revenue Code. Those, along with privately held corporations, are common structures for dark money organizations — groups that aren’t required by law to disclose the ultimate source of their funding.

    The company’s giving to such groups jumped to more than $12 million in 2017, after much lower levels of $200,000 in 2016 and $100,000 in 2015, according to the spreadsheet.

    Starting in 2014, FirstEnergy had sought bailouts for noncompetitive coal and nuclear plants. And in late 2016, regulators approved a $456 million consumer surcharge that ultimately was held unlawful. Yet the company claimed it needed more.

    The document details once-secret contributions to groups supporting “everyone from the mayor of Akron to President Trump that FirstEnergy made to secure bailouts for its soon-to-be bankrupt coal and nuclear plants and to gain influence on other key issues,” said Dave Anderson, policy and communications manager for the Energy and Policy Institute.

     A spreadsheet details dark money expenditures by northeastern power company FirstEnergy as it sought to secure a $1.3 billion bailout for its struggling nuclear power plants. The sheet reveals a previously unreported $1 million donation to benefit the candidacy of Ohio Lt. Gov. Jon Husted. 

    Anderson added that the spreadsheet also “provides some key new evidence for utility regulators and consumer advocates to use to ensure that every dollar of ratepayer money that FirstEnergy misused to fund its secret political spending is publicly disclosed and refunded, with interest and ideally serious financial penalties.”

    At the time, the author of the document that details the donations, Kristina Housley, was executive assistant to FirstEnergy’s Mike Dowling, who is now a defendant in a state criminal case along with former CEO Chuck Jones.

    Finding out all the details about the dark money spending behind HB 6 is like peeling back the layers of an onion, said Catherine Turcer, executive director of Common Cause Ohio.

    “The reason that transparency matters so much is that money that is spent in the shadows influences elections, and it influences really important policy decisions that impact us every day,” Turcer said. “And we have the right to know what is going on in government and how decisions are being made and who’s attempting to influence those decisions.”

    The ‘Golden Boy’ for FirstEnergy

    A December 2017 email from former FirstEnergy lobbyist Joel Bailey said Husted was working to get DeWine on board with FirstEnergy’s “issues.” FirstEnergy also supported other pro-DeWine/Husted efforts during the election cycle.

     Former FirstEnergy CEO Chuck Jones (top left), former FirstEnergy VP Michael Dowling (top right), former PUCO Chair Sam Randazzo (bottom middle). Graphic by WEWS. 

    After the election, Husted and DeWine dined with Jones and Dowling on December 18, 2018. Later that night, FirstEnergy agreed to pay $4.3 million to energy lawyer Randazzo, who went on to become DeWine’s first pick for chair of the Public Utilities Commission of Ohio. FirstEnergy later identified Jones and Dowling as the two people responsible for paying alleged bribes.

    Husted’s office has been evasive about his recollections, despite Jones noting in texts to Randazzo that the PUCO chair position was discussed in at least general terms. Another text by Jones in 2019 said the DeWine/Husted team was forced “to perform battlefield triage” to secure Randazzo’s nomination after a 198-page dossier provided to DeWine’s staff threatened to derail it.

    Evidence from last year’s criminal trial of Householder, the former Ohio House speaker, and lobbyist Matt Borges also included messages between former FirstEnergy executives Jones and Dowling about Husted working behind the scenes to build support for the bill. Among the actions were efforts to extend the bailout period for the company’s former nuclear power plants in Ohio.

    Husted long a friend of utilities

    Husted had been Ohio’s secretary of state immediately before becoming lieutenant governor. Before that, he served as House speaker in the General Assembly. In that role, he played a pivotal part in securing passage of another major energy bill, Senate Bill 221.

    At the time, Husted supported the law’s clean energy standards that were ultimately gutted by HB 6. However, SB 221 set the stage for so-called electric security plans. Those have let FirstEnergy and other utilities avoid full rate cases for more than a decade, while allowing cross-subsidies and adding multiple additional charges to consumers’ bills.

    “That bill upset the balance” of energy regulation in Ohio, said Ashley Brown, a former PUCO commissioner. “It was a humongous gift for the utilities.”

    Lawmakers repealed HB 6’s $1 billion-plus in subsidies for FirstEnergy’s former nuclear power plants and its recession-proofing provisions in 2021, eight months after the arrests of Householder and others.

    Earlier this year, Husted told NBC4 in Columbus the rest of HB 6 “needs to be completely removed.” He did not respond to Energy News Network questions this week about whether that includes both the law’s subsidies for two 1950s-era coal plants and its gutting of Ohio’s renewable energy and energy efficiency standards.

    FirstEnergy spokesperson Jennifer Young declined to comment on the company’s 2017 donation to Freedom Frontier due to ongoing litigation. However, she added, “FirstEnergy will post information regarding its support of 501(c)(4) social welfare organizations on the company’s website on a quarterly basis.”

    Those disclosures are currently required under the company’s July 2021 deferred prosecution agreement. That agreement expires later this year.

    Meanwhile, FirstEnergy still has not disclosed its dark money spending for the years 2018 through 2020. And proposals for reforms that would require such disclosures from all electric utilities remain stalled in the General Assembly.

    “It’s incredibly frustrating that Ohioans can be aware that dark money impacted decision-making at the statehouse,” Turcer said, “and yet we still haven’t gotten the legislators to create greater transparency.”

    The Energy News Network is a nonprofit news site dedicated to keeping influencers, policymakers and citizens informed of the important changes taking place in the transition to a clean energy system. Floodlight is a nonprofit newsroom that investigates the powerful interests stalling climate action. 

    This article first appeared on Energy News Network and is republished here under a Creative Commons license.

    _____________

    Mario Alejandro Ariza, Floodlight
    MARIO ALEJANDRO ARIZA, FLOODLIGHT

    Mario Alejandro Ariza is an investigative reporter and a Dominican immigrant. His byline has appeared in publications like the South Florida Sun Sentinel, The New Republic, and The Atlantic. Mario wrote a book called “Disposable City: Miami’s Future on the Shores of Climate Catastrophe,” which was published by Bold Type Books. His essays have been featured in The Believer and selected for Best American Essays. He lives in South Florida with a cat, a dog, and a sturdy pair of waterproof boots.

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    Kathiann M. Kowalski, Energy News Network
    KATHIANN M. KOWALSKI, ENERGY NEWS NETWORK

    Kathi is the author of 25 books and more than 600 articles, and writes often on science and policy issues. In addition to her journalism career, Kathi is an alumna of Harvard Law School and has spent 15 years practicing law. She is a member of the Society of Environmental Journalists and the National Association of Science Writers. Kathi covers the state of Ohio.

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  • Ohio indictments provide a better picture of squalid relationships that spurred massive scandal

    Ohio indictments provide a better picture of squalid relationships that spurred massive scandal

    Former Public Utilities of Ohio Chair Sam Randazzo at court. (Photo by WEWS.)

    BY:  – Ohio Capital Journal

    An Ohio grand jury has handed up a 44-count indictment against three players in what is likely the biggest bribery scandal in state history. And when the 50-page indictment was unveiled Monday, it provided new details about a decade of payoffs and conflicts as one of them — who became the state’s top regulator — allegedly did a huge electric utility’s bidding.

    The indictment concerns a $1.3 billion dollar bailout that Akron-based FirstEnergy has already admitted to the federal government that it paid more than $60 million in bribes to purchase.

    Former Ohio House Speaker Larry Householder, R-Glenford, and former state GOP Chairman Matt Borges are serving federal prison sentences for their roles in the 2019 passage of the bailout and the dirty-but-succesful fight to thwart a voter-led repeal.

    When federal prosecutors in 2021 charged those two and three others, they said their investigation continued. But it wasn’t until December that they charged another in the case — Sam Randazzo, a lawyer and longtime energy consultant whom Gov. Mike DeWine nominated to chair the state’s top regulator, the Public Utilities Commission of Ohio.

    That left the people who paid the alleged bribes — FirstEnergy’s top executives — uncharged in a scheme that took place more than four years ago.

    Double dealing

    All that changed Monday when Ohio Attorney General Dave Yost announced state charges against Randazzo and former First Energy CEO Chuck Jones and former Vice President Michael Dowling for their alleged roles in the criminal conspiracy. The three were arraigned in Akron on Tuesday and each pleaded not guilty.

    They were charged in an indictment that alleged shady dealings between the them stretching back 13 years.

    “It all began with a well-lawyered theft in 2010,” the indictment said.

    It went on to describe how Randazzo was general counsel for a group of large FirstEnergy customers — the Industrial Energy Users of Ohio — while also working as a FirstEnergy consultant. Only, the Industrial Energy Users didn’t know that Randazzo was also being paid by the company they were paying him to fight, the indictment said.

    It accuses Randazzo of settling the industries’ claims against FirstEnergy on terms acceptable to FirstEnergy and running the settlements through Randazzo-controlled shell companies where he took a skim — again, unknown to the industrial energy users.

    “His clients, the industrial members of IEU-Ohio, did not know he was a consultant for FirstEnergy,” the indictment said. “Randazzo did not tell them. Years later, some of the money would make its way to IEU-Ohio. Some of it would end up in Randazzo’s pocket.”

    The Industrial Energy Users appear to have engaged in some cynical conduct of their own, however. The indictment describes a 2015 agreement in which FirstEnergy was to pay Randazzo’s company $8.5 million for “consulting services.”

    It was really a cash “side deal” in which FirstEnergy paid the industrial users to drop their objections to a rate hike FirstEnergy wanted, supposedly in the name of “energy security,” the indictment said. In other words, prosecutors said that with Randazzo’s facilitation, FirstEnergy paid off a wealthy, powerful group of electricity users in order to raise rates on everybody else.

    Such arrangements proved quite profitable for Randazzo.

    “Between 2016 and 2019, FirstEnergy paid… $13,152,639.94 to Randazzo’s two shell companies,” the indictment said. “Of that total, Randazzo gave $7,756.903.84 to his IEU-Ohio Client and kept $5,395,736.10 for himself.”

    Cozy relationships

    This is the guy the incoming DeWine-Husted administration thought would be a good candidate to regulate utilities — companies to which Ohioans have little choice in paying their billions.

    The state indictment describes how, on Dec. 18, 2018, FirstEnergy execs Jones and Dowling met with Gov.-elect DeWine and Lt. Gov.-elect Jon Husted at the Columbus Athletic Club and discussed whether the executives wanted Randazzo to regulate their massive electric utility.

    The notion that a governor would ask a huge utility who might be acceptable as a regulator might itself seem startling. But after the dinner, according to the indictment, Jones and Dowling did something even more brazen.

    They went to Randazzo’s German Village condo and pursuant to that, Randazzo solicited a $4.3 million payment from Jones and Dowling, the indictment said. FirstEnergy paid the money “without ever having received an invoice for the payment and without any work or consulting services being performed,” the indictment said. It added that the executives made the payment over the objections of a company lawyer.

    Randazzo told Laurel Dawson, DeWine’s chief of staff, about the payment, calling it a “consulting agreement.” But he didn’t tell her of the other millions he’d gotten from the utility he was seeking to regulate, the indictment said. Randazzo also never told the Ohio Ethics Commission about any of the money he’d gotten from FirstEnergy, the indictment said.

    In Dawson, Randazzo might have had a sympathetic audience. Her husband, Michael Dawson, was a “paid FirstEnergy lobbyist” in 2016, when he’d gotten a $10,000 loan from Randazzo, the indictment said.

    But if his chief of staff told DeWine about the huge payoff Randazzo got from FirstEnergy, it must not have fazed the new governor. DeWine nominated Randazzo to be chairman of the Public Utilities Commission — the ratepayers’ supposed protector — on Feb. 4, 2019.

    Versatile player

    During Householder’s six-week trial in Cincinnati last year, federal prosecutors put on exhaustive evidence of how the FirstEnergy executives financed Householder’s bid to become speaker and to pass the notorious bailout known as House Bill 6.

    “Together, Jones, Dowling, Randazzo and his shell companies worked in concert to steal the power of government and bend it to the will of FirstEnergy,” was the way the state indictment unveiled on Monday put it.

    Most of the details of Randazzo’s involvement in the creation and passage of HB 6 are already known from the federal trial. They show him acting in multiple, conflicting, often-undisclosed capacities — similar to those the state indictment alleges he had already played with FirstEnergy and the industrial energy users.

    Even though he was supposed to be a regulator, Randazzo drafted portions of the bailout legislation and passed them between FirstEnergy officials and a Householder employee who had recently worked for the PUCO. They sometimes only shared printed copies of the huge bill, out of an apparent apprehension about leaving electronic fingerprints.

    According to text messages between Jones and Dowling, Randazzo went so far as to actively lobby for passage of the bailout — which would seem a big departure from the traditional duties of a disinterested regulator.

    Jones and Dowling discussed a meeting about HB 6 that Randazzo had with Sen. Steve Wilson, R-Maineville, and the Senate’s counsel. “We have a good plan to help,” Dowling told his boss.

    Other officials

    Despite the fact that DeWine had reason to know Randazzo was connected to FirstEnergy, the governor made him the state’s top utility regulator and he signed the billion-dollar bailout that benefitted the company the day it passed. And on July 21, 2021 — the day Householder was arrested — DeWine said he wasn’t in favor of repealing the measure.

    The governor subsequently walked that back, but HB 6 is still on the books and Ohio utilities are still getting hundreds of millions in ratepayer subsidies as a result.

    DeWine wasn’t the only state official to act at least peripherally in the scandal.

    Secretary of State Frank LaRose has refused to explain the “private” updates that FirstEnergy CEO Jones said the state’s chief elections official was providing during an attempt to gather signatures to put an HB 6 repeal on the ballot.

    And Yost himself dealt a mortal blow to the signature gathering when he initially rejected the ballot language — cutting nearly in half the time HB 6 opponents had to gather a quarter-million valid signatures. And in text messages presented in the federal trial, Borges told a co-conspirator that Yost thought HB 6 was a bad law, but wouldn’t speak up because of help he’d gotten from FirstEnergy in the past.

    Beyond the bailout

    Randazzo’s alleged help to FirstEnergy wasn’t limited to HB 6. He also thwarted a PUCO look into the company’s books that was likely to force a cut in electricity bills. That would have caused falling stock prices and a hit to Jones’ and Dowling’s portfolios, the indictment said.

    The erstwhile regulator was apparently so helpful that Jones at one point told a FirstEnergy subordinate to back off for fear of being too obvious. In a text message included in the indictment, Jones told Dennis Chack that Randazzo’s pro-FirstEnergy conduct “has a lot of talk going on in the halls of PUCO about does he work there or for us?”

    Even so, Randazzo’s behavior at the PUCO continued to be shameless, urging fellow regulators to join him in lobbying for the corrupt bailout, the indictment said.

    Randazzo “began internally lobbying PUCO staff members between July 2020 and September 2020 to generate strategies to save HB 6, despite facing internal objections about the inappropriateness of the effort to save HB 6,” it said.

    The indictment included a Sept. 15, 2020 email in which Randazzo told subordinates, “One option (and I really think we need to get other commissioners and staff into a proactive mode): We could, on our own initiative, issue a show-cause order to (FirstEnergy) directing (FirstEnergy) to show that no costs associated with HB 6 have been included in any riders or base rates.”

    Had such an order been issued, the result would have been misleading. While the bill didn’t raise consumer costs through riders or base rates, it included a provision that ensured FirstEnergy would collect at least as much as it did in one of its best years and it created a massive subsidy for money-losing coal plants.

    Randazzo’s efforts seemed finally to end two months later, when the FBI searched his condo.

    Marty Schladen
    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.

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  • Ohio Gov. Mike DeWine and Lt. Gov. Jon Husted subpoenaed in civil suit over bailout scandal

    Ohio Gov. Mike DeWine and Lt. Gov. Jon Husted subpoenaed in civil suit over bailout scandal

    COLUMBUS, OH — MAY 03: Ohio Gov. Mike DeWine joined on stage by First Lady Fran DeWine, grandson Calvin, Lt. Gov. Jon Husted and Second Lady Tina Husted to celebrate DeWine winning the Republican Party nomination for governor in the Ohio primary election, May 3, 2022, at the DeWine-Husted campaign headquarters, Columbus, Ohio. (Photo by Graham Stokes for the Ohio Capital Journal. Republish photo only with original article.)

    BY:  –

    Plaintiffs in a civil suit related to a massive bribery and money-laundering scandal have subpoenaed documents from Ohio Gov. Mike DeWine and they’re scheduling a sworn deposition with Lt. Gov. Jon Husted.

    There have been four criminal convictions so far in the scandal and U.S. Attorney Kenneth L. Parker has said the investigation is continuing. However, there is no indication that DeWine or Husted is an object of it.

    Even so, members of the DeWine-Husted administration were significant players in the scandal and DeWine’s nominee to head up the Public Utilities Commission of Ohio could be a target of the probe.

    The demands for documents and testimony come in a class-action suit that big investors in Akron-based FirstEnergy filed against the company over its involvement in the scheme. Between 2017 and 2020, the company paid out more than $60 million to gain a $1.3 billion ratepayer bailout that was mostly intended to prop up two failing nuclear plants in Northern Ohio.

    Among those already convicted are former Ohio House Speaker Larry Householder, R-Glenford, who was sentenced to 20 years in prison for his role in what federal authorities said might be the biggest bribery and money-laundering scheme in Ohio history. Former state Republican Chairman Matt Borges in June was sentenced to five years for his role.

    However, others who played prominent roles in the scandal are yet to be charged.

    They include former FirstEnergy CEO Chuck Jones and former Vice President Michael Dowling, who directed the money to make Householder speaker in 2018 and then pass and and protect House Bill 6, the corrupt bailout legislation. They also include Sam Randazzo, DeWine’s first nominee to chair the Public Utilities Commission of Ohio.

    Jones, Dowling and Randazzo deny wrongdoing, but in a deferred prosecution agreement, FirstEnergy said Jones and Dowling paid Randazzo a $4.3 million bribe just as DeWine was selecting Randazzo to be FirstEnergy’s top regulator. In that post, Randazzo helped write the corrupt bailout bill and he helped FirstEnergy avoid a scheduled audit known as a “rate case” that was slated for 2024.

    Large investors such as pension and investment funds are suing FirstEnergy over the scandal, arguing that the company violated securities laws by not disclosing its reckless conduct. And then, when the feds made arrests in July 2020, its stock value plummeted — as did their investments.

    The plaintiffs in the civil case have been battling with Randazzo — who is not a defendant — since April over whether he has complied with judges’ orders to produce documents relevant to the $4.3 million in FirstEnergy money he received just before he began regulating the company.

    A magistrate judge and a special master in the case have consistently rebuked Randazzo for not cooperating more fully, with the most recent instance coming last week. Randazzo appealed up the food chain, asking Magistrate Judge Kimberly Jolson not to hold him to a disclosure order from the special master, Shawn K. Judge.

    The plaintiffs in the civil case asked Jolson to make Randazzo comply with Judge’s order to cough up more information. As part of the filing, they provided a table of depositions they’ve scheduled or are in the process of scheduling. To prepare for some, they presumably could use the information and documents they’re demanding of Randazzo.

    One deposition they’re scheduling is of Randazzo himself, which has a “target period” of March 4 to March 29.

    Another is of Husted, the lieutenant governor, which has a target period of Feb. 28 to March 19. Dave Anderson of the Energy and Policy Institute first flagged the document that listed Husted’s deposition.

    Hayley Carducci, Husted’s spokeswoman, on Tuesday said Husted is cooperating.

    “We’re aware of the civil investor lawsuit against First Energy,” she said in an email. “The Lt. Governor has already provided public records pertaining to this, and we will continue to comply as we have done in the past. There’s no new information to disclose.”

    As with Randazzo, Husted is not a defendant in the civil case.

    DeWine also has recently received a subpoena for documents in the civil case.

    “We’re reviewing it with counsel for what can be provided,” Press Secretary Dan Tierney said in an interview. “Our office is subject to the public records act and in a sense this is no different.”

    Tierney pointed out a distinction between the class-action suit and the case which has already convicted Householder and Borges and proceedings that could charge others.

    “This is a civil case and anybody has a right to bring a civil case if they want,” Tierney said of the proceeding in which the governor’s documents had been subpoenaed. “The civil process is where people say they’ve been damaged and they want the court to award damages. That is far different than the criminal case in which the federal government said public integrity laws had been violated.”

    He added, “It still remains in the criminal case that nobody in our office or the lieutenant governor’s office has been questioned or subpoenaed or had any legal filings like that.”

    Even in the absence of such requests, DeWine and his administration were involved several ways in the drafting and passage of the corrupt utility bailout:

    • He nominated Randazzo to head up the PUCO a day after it was publicly revealed that FirstEnergy had paid a group controlled by Randazzo millions of dollars over the years. “Forced DeWine/Husted to perform battlefield triage,” FirstEnergy CEO Jones said in a text message to Dowling. “It’s a rough game.”
    • While he was still a FirstEnergy lobbyist, Dan McCarthy set up Partners for Progress, a 501(c)(4) “dark money” group through which Jones, Dowling and others funneled millions into the conspiracy. DeWine hired McCarthy as his legislative affairs director and kept him in that post for a year after Householder and the others were arrested.
    • HB 6, the bailout legislation, was highly controversial as Householder jammed it through the legislature, other lawmakers testified at his trial. Even so, DeWine signed it the day it passed and when Householder was arrested, the governor’s first position was to keep the law in place — and part of it still is. DeWine reversed himself a day later, calling to repeal and replace the subsidies.

    Morgan Trau contributed to this report.

    Marty Schladen
    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.

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  • Utility refunds top priorities list for new Ohio consumers’ counsel

    Utility refunds top priorities list for new Ohio consumers’ counsel

    Getty Images

    BY: 

    Refunds for unlawful utility charges are a top priority for Maureen Willis, the veteran litigator who became Ohio’s new consumers’ counsel this month.

    The Office of the Ohio Consumers’ Counsel is a state-funded agency that represents ratepayer interests in gas and electric utility cases, including matters relating to House Bill 6, the 2019 law at the heart of Ohio’s nuclear and coal bailout scandal. The office also works for legislative reform to promote competition, eliminate subsidies and protect energy affordability for vulnerable groups.

    Ohio Consumers' Council Maureen Willis.
     Ohio Consumers’ Counsel Maureen Willis. 

    The Energy News Network spoke with Willis about her agenda as Ohio’s official advocate for residential ratepayers.

    Why are refunds from utilities a big issue?

    “If consumers are charged and there’s a decision by the court or even a federal agency that the charges were unlawful or unreasonable, we think they should get the refund all the way back to when they paid it,” Willis said.

    Instead, a majority on the Ohio Supreme Court has held that a 1957 case against “retroactive rulemaking” forbids refunds of charges, called riders. That’s the case even if the court holds the charges are otherwise unlawful or unreasonable and even if the riders were not part of a full ratemaking case.

    So, even though the Ohio consumers’ counsel has helped consumers avoid $433 million in charges since 2009, they’re still out $1.5 billion in refunds. That makes the wins something of a “hollow victory, because you’re not getting that money back,” Willis said. “But we will continue to fight.”

    What is OCC’s position on renewable energy in Ohio?

    “We want to advocate for consumers to get energy at the least cost,” Willis said, noting the agency generally considers itself agnostic on the source of electricity. Nonetheless, “renewables are becoming more and more economic, and that certainly is something that we take into account in the mix,” Willis said.

    A 2023 report by Energy Innovation Policy & Technology found that 99% of U.S. coal plants are more costly to keep running than replacing them with new solar, wind or energy storage.

    Yet HB 6 and regulatory rulings before it require Ohio ratepayers to subsidize costs for two 1950s-era coal plants. OCC continues to contest those charges.

    “To the extent that there are subsidies built into the rate and those subsidies are attached to monopoly rates, it creates a problem” by undermining the market, Willis said. “In Ohio, we do rely on the competitive market to bring consumers lower prices and greater innovation.”

    Ohio’s law and rules on utility energy efficiency programs have changed over the past decade. What is OCC’s current position on energy efficiency?

    “From our perspective, energy efficiency is a good thing,” Willis said, noting that it can help reduce people’s utility bills. Ten years ago, Ohio law required utilities to meet an energy efficiency standard. Back then, OCC was among parties pushing regulators to require FirstEnergy to bid that energy efficiency into a capacity market auction, which lowered costs to consumers. But in 2019, HB 6 gutted Ohio’s energy efficiency standard.

    Now, though, consumers can get energy efficiency products and services from competitive suppliers, Willis said. So, “we would say that the utility really has no business to be in the energy efficiency business anymore.” OCC also objects to “shared savings,” which it views as extra profits for utilities.

    A bipartisan bill to let utilities run voluntary energy efficiency programs is pending in the General Assembly. Supporters say utility-run programs can make savings simpler for consumers and can produce benefits for all ratepayers by reducing system-wide demand.

    What is OCC’s position on ratemaking reform?

    OCC has “always battled” electric security plans, or ESPs, Willis said. “We believe they are crony capitalism.”

    A traditional ratemaking case requires utilities to show all their projected costs and revenues, based upon actual data from a representative test year. ESP cases don’t require that detailed scrutiny. They allow utilities to raise rates for isolated issues, without presenting those charges in the context of all of a company’s financial activities. And utilities can reject any change regulators might try to make to a plan — effectively giving them unequal, outsized bargaining power, Willis said.

    Along those lines, OCC supports Senate Bill 143, which would get rid of ESPs and strengthen corporate separation between utilities and their affiliates.

    OCC opposes Senate Bill 102, which would require periodic rate cases but still allow multiple riders. And the bill would let utilities use projections instead of actual data from test years in full ratemaking cases. Challengers also would have fewer opportunities to conduct pre-hearing discovery from utilities and others.

    Discovery procedures are “truth-finding tools,” Willis explained. “To the extent you put limits on those, you’re saying, ‘We don’t really want you to get to the truth; you’re just going to have to accept what the utility has filed.’”

    Four HB 6-related cases remain frozen at the PUCO, while FirstEnergy seeks more rider money through another ESP. What’s OCC’s position on that?

    “It’s really an unfair situation where we’re stayed when it comes to protecting consumers,” Willis said. “But when it comes to charging consumers rate increases, there’s no stay on those.”

    A Sept. 22 filing by OCC asked the PUCO to lift the stay in the four HB 6-linked cases. An Oct. 2 filing by FirstEnergy opposed ending the stay but did not address the argument that it’s unfair to continue the stay while the company has a separate case seeking more money from ratepayers.

    What is OCC working on at the federal level?

    OCC filed a complaint with federal regulators last month, asking them to review utilities’ “supplemental” transmission projects. As things stand, neither the Federal Energy Regulatory Commission nor the grid operator PJM reviews charges for those projects before utilities ask state regulators to let them pass along the costs to ratepayers. Nor does the PUCO scrutinize the charges, Willis said.

    Since 2017, Ohio utilities have added more than $6 billion for “supplemental” projects to their local transmission plans in Ohio, according to the complaint. By filing its complaint, OCC hopes “that someone starts looking at these projects for need, cost-effectiveness and prudence,” Willis said.

    OCC is also concerned about the pending transfer of the Energy Harbor (formerly FirstEnergy Services) nuclear plants to Vistra for one of that company’s subsidiaries to run. “We want to make sure that the competitive market is protected,” Willis said.

    Where does grid modernization fit in OCC’s agenda?

    While the grid needs to be updated, Willis doesn’t want it done through “gold-plating.” Generally speaking, that involves adding pricey equipment that’s not really necessary. The added spending increases the base on which a utility earns a return on investment.

    Instead, Willis wants regulators to scrutinize any grid modernization plan carefully: “Is it really needed? And who is benefitting? Is it really to the benefit of residential consumers?” she asks.

    What special concerns come into play for consumers with low incomes?

    “Payment assistance is something we’re always going to be looking at,” along with the prices charged to low-income customers, disconnection data and more, Willis said. “Part of our advocacy must certainly be to protect the at-risk consumers.”

    This article first appeared on Energy News Network and is republished here under a Creative Commons license.

     

    __________________

    Kathiann M. Kowalski, Energy News Network
    KATHIANN M. KOWALSKI, ENERGY NEWS NETWORK

    Kathi is the author of 25 books and more than 600 articles, and writes often on science and policy issues. In addition to her journalism career, Kathi is an alumna of Harvard Law School and has spent 15 years practicing law. She is a member of the Society of Environmental Journalists and the National Association of Science Writers. Kathi covers the state of Ohio.

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  • Money paid, favors done. Messages detail relationship between Ohio regulator and energy executives

    Money paid, favors done. Messages detail relationship between Ohio regulator and energy executives

    FBI agents remove boxes of materials from PUCO Chairman Sam Randazzo’s condo in Columbus Nov. 17, 2020. Photo courtesy of Daniel Konik/Statehouse News Bureau.
    BY:  – Ohio Capital Journal

    In early 2019, news of financial ties between Akron-based FirstEnergy and the man incoming-Gov. Mike DeWine had named to lead the Public Utilities Commission of Ohio began to spread. And as it did, FirstEnergy’s top executives feared they wouldn’t have a regulator they could control, according to documents filed in federal court late last week.

    “Great. Now we have none on the list” of nominees, then-CEO Chuck Jones texted Vice President Michael Dowling. Jones later added, ruefully, “Always need a backup plan.”

    As it happened, the nominee, Sam Randazzo, ended up being appointed to the commission after being paid $4.3 million by FirstEnergy. He proceeded to help draft a law providing the utility with a $1.3 billion bailout. The company spent another $60 million to pass and then to protect it from a citizen-initiated repeal in what law-enforcement officials have called one of the biggest bribery and money-laundering scandals in state history.

    Randazzo, Jones and Dowling haven’t been charged in the scandal, but after a jury trial that convicted two others, two guilty pleas, and a suicide, the three men could be the next targets as federal authorities continue their probe.

    If authentic, the communications filed on Friday indicate that the three met in Randazzo’s Columbus condo in December 2018. And they appear to show that the FirstEnergy executives agreed to pay Randazzo a large sum in exchange for favors when Randazzo became the state’s chief regulator.

    Another communication 23 months later — just after the FBI searched the condo in November 2020 — shows Randazzo providing a friend “the number for my home which the FBI does not have.”

    Demanding records

    Lawyers for Randazzo, Jones and Dowling didn’t immediately respond to requests for comment Monday, but attorneys for the former executives have said in separate court filings that they believe the feds are investigating their clients.

    The documents filed in federal court on Friday are part of a huge class-action suit against FirstEnergy, Jones, Dowling and a number of other defendants.

    In a deferred prosecution agreement, FirstEnergy in 2021 agreed to pay $230 million and admitted wrongdoing, including by bribing Randazzo. But the class-action plaintiffs — large pension and investment funds — are arguing that the company violated securities law by not disclosing its corrupt conduct. And, they argue, the company lost much of its value when that conduct came to light, leaving investors holding the bag.

    Randazzo has denied wrongdoing and he isn’t a defendant in the case, but the class-action plaintiffs want him to produce all communications relating to how he spent the $4.3 million he got from FirstEnergy just as he was poised to become its most powerful regulator.

    The plaintiffs have been accusing Randazzo since April of foot-dragging. They obtained the messages they filed Friday from a third party and are pointing to them as examples of Randazzo’s lack of cooperation.

    Early arrangements

    The earliest of the messages was on Dec. 18, 2018, and it appears that the three men had recently met in the residence that the FBI later searched.

    “Got it, Sam,” Dowling, then the FirstEnergy vice president, texted Randazzo. “Good seeing you as well. Thanks for the hospitality. Cool condo.”

    The “got it” was in response to a column of numbers Randazzo sent that appear to indicate that he was expecting payments from FirstEnergy through 2024:

    • 2019 — 1,633,333
    • 2020 — 600,000
    • 2021 — 600,000
    • 2022 — 600,000
    • 2023 — 600,000
    • 2024 — 300,000

    A seventh entry said “Total 4,333,333” — an amount equal to what FirstEnergy said was a bribe.

    The following day, Jones, the CEO, told Randazzo that he wouldn’t have to wait that long for the money, according to the filings. Jones also made it clear that he expected access to Randazzo.

    “We’re going to get this handled this year, paid in full, no discount,” the message says. “Don’t forget about us or Hurricane Chuck may show up on your doorstep! Of course, no guarantee he won’t show up sometime anyway.”

    Randazzo’s response seemed to be meant to reassure — and he linked the money to favors.

    “Made me laugh — you guys are welcome anytime and anywhere I can open the door,” he said. “Let me know how you want me to structure the invoices. Thanks.”

    Connections

    But on Jan. 30, 2019, problems popped up with Randazzo’s nomination.

    FirstEnergy’s nuclear-owning subsidiary, FirstEnergy Solutions, was going through bankruptcy and it had listed the Sustainability Funding Alliance of Ohio on one of its disclosures. Randazzo controlled the group and FirstEnergy had paid him millions through it in the past. Now the press was on to the matter.

    “Chuck — Sam Randazzo is going to pull out of the PUCO process ASAP and it’s related to a disclosure on a (FirstEnergy Solutions) bankruptcy filing,” Dowling texted Jones, according to the documents filed Friday. “Reporters called (FirstEnergy) today inquiring about the relationship between (FirstEnergy Solutions) and a group called the Sustainability Funding Alliance of Ohio. You can guess the rest.”

    That’s when Jones lamented not having a “backup plan” in the event that Randazzo was not seated on the utility commission. Dowling agreed.

    “This is awful,” he wrote. “The FirstEnergy Solutions bankruptcy filing names that group and Sam names the same group on a financial disclosure statement. Unreal. I don’t know why it was listed in the (FirstEnergy Solutions) bankruptcy filing. The payments we made year-end ’18 came from (FirstEnergy) Corp. Services.”

    Dowling was ready to throw Randazzo under the bus if the connection proved to be an embarrassment to the incoming DeWine administration.

    “They’re going to be mad at Sam (and hopefully not us) for not disclosing the financial relationship,” Dowling wrote. “That’s Sam’s responsibility.”

    A day later, however, the financial connection between FirstEnergy and Randazzo apparently wasn’t sufficiently embarrassing and he was picked to head up the PUCO.

    “A bullet grazed the temple,” Dowling told Jones, according to one of the texts filed last week.

    “Forced DeWine/Husted to perform battlefield triage,” Jones responded, referring to Lt. Gov. Jon Husted. “It’s a rough game.”

    A still rougher game

    In a trial held in Cincinnati from late January to mid-March, prosecutors put on witnesses and displayed communications describing Randazzo’s 2019 role in drafting House Bill 6, the bailout bill. Not only did it provide $1 billion to prop up two failing nuclear plants FirstEnergy was spinning off, it charged ratepayers about $100 million a year to insulate the company from an economic downturn. For FirstEnergy, it was easy money, in other words.

    In June, U.S. District Judge Timothy Black sentenced former Ohio House Speaker Larry Householder, R-Glenford, to 20 years in prison for orchestrating the racketeering scandal. Former state GOP Chairman Matt Borges got five years for his role.

    By November of 2019, HB 6 was on the books after FirstEnergy and a subsidiary plowed $36 million into a brutal, dishonest effort to turn back a citizen-initiated repeal. But the FirstEnergy executives weren’t done with Randazzo.

    On Nov. 10, 2019, Jones texted a coal executive that another cloud loomed for FirstEnergy.

    “And the (FirstEnergy) rescue project is not over,” Jones said, according to documents filed as part of the class-action suit. “At (Edison Electric Institute) financial conference. Stock is gonna get hit with Ohio 2024. Need Sam to get rid of the ‘Ohio 2024’ hole.”

    That was an apparent reference to a requirement that FirstEnergy file a “rate case” with the PUCO in 2024. In such a proceeding, regulators assess a utility’s operations and make a judgment about whether its rates and revenues are reasonable.

    FirstEnergy was apparently afraid they wouldn’t be. On Nov. 21, 2019, just 11 days after Jones expressed his concerns, the PUCO under Randazzo’s leadership issued an order saying it was “no longer necessary or appropriate” to require FirstEnergy to file a rate case.

    The next day, Jones wanted to express his appreciation to Randazzo. He did so by sending the erstwhile regulator a list of prices for six energy stocks that day. FirstEnergy stocks were up 1.5%. The next highest was Avangrid, which was up 0.86%.

    “Thank you!!” Jones wrote.

    Randazzo replied, “Ha — as you know, what comes up may come down… Thanks for the note. Spoke to Mike (Dowling) last night.”

    Then Jones said, “My Mom taught me to say Thank you.”

    Flying high

    By the start of 2020, things seemed to be going well for those who orchestrated the bailout.

    FirstEnergy Solutions would emerge from bankruptcy in February as a separate company, Energy Harbor. The class-action plaintiffs argue that one of FirstEnergy’s major goals in the scheme was to prop up the nuclear plants, get them off their books and shed the liability of having to pay for a decades-long process to close and clean up after them.

    At the same time, FirstEnergy was funneling millions more dark-money dollars into an effort to get the state’s legislature to put a constitutional amendment on the ballot. It would change the state’s term-limits so Householder could stay speaker for another 16 years — and presumably continue to do the utilities’ bidding.

    But then in July 2020, it all crashed down.

    On July 21, the FBI arrested Householder, Borges and other conspirators. By the next day, FirstEnergy stock had lost 34% of its value, the class-action plaintiffs contend.

    FirstEnergy fired Jones and Dowling the following October. And then in November, 2020, Randazzo was forced to resign from the PUCO after the FBI searched his condo.

    “Pretty stressful few days which started Monday at 6:00 when 10-12 FBI agents with their guns drawn announced their arrival at our home,” Randazzo emailed a friend on Nov. 21, according to the documents filed by the class-action plaintiffs. “But, Carol and I are handling it and doing better each day. Neighbors, friends (like you) family, PUCO staff and people I have worked for over the years have been great. Roger Sugarman (his attorney) is my new hero. So onward!”

    Then Randazzo encouraged the friend to call him on the number he believed that the FBI didn’t have.

    _________________________

    Marty Schladen
    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.

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  • Federal judge blasts disgraced Ohio House speaker as a “bully,” sends him straight to jail

    Federal judge blasts disgraced Ohio House speaker as a “bully,” sends him straight to jail

    Former House Speaker Larry Householder, R-Glenford. Source: Ohio General Assembly.

    BY:  – Ohio Capital Journal

    CINCINNATI — Former Ohio House Speaker Larry Householder spent possibly his last moments as a free man around 2:30 p.m. Thursday and they couldn’t have been pleasant.

    U.S. District Judge Timothy Black gave the Glenford Republican the maximum possible sentence of 20 years and then ordered blue-shirted U.S. Marshals to immediately take him into custody. He rose, put his hands behind his back, the marshals cuffed him and led the once-powerful pol away.

    But before that humiliation, the judge blistered Householder for being the ringleader of a racketeering scandal in which Akron-based FirstEnergy paid him more than $59 million in bribes in exchange for a $1.3 billion bailout, most of which was intended to save two failing nuclear plants in Northern Ohio.

    Ratepayers could have used that money for things like education, health care or to start businesses, the judge said.

    “You handed that money to suits in private jets,” Black said.

    The judge made the speech and imposed the sentence after saying Householder clearly perjured himself during his criminal trial, which lasted from late January until mid-March.

    In it, Householder claimed to barely know FirstEnergy executives as federal prosecutors put on a mountain of evidence that Householder flew on their corporate jets, sat in their luxury boxes and dined in fancy restaurants as they plowed tens of millions of the corporation’s dollars into dark-money accounts.

    “You conned the people of Ohio and you tried to con the jury, too,” Black said in his gravely voice as Householder, clad in a gray suit and red tie, slumped his bulk back in his chair.

    The money from FirstEnergy and one of its subsidiaries was used to elect fellow Republicans in 2018 who would vote to make Householder speaker in early 2019. More than $500,000 of it was used to pay off Householder’s credit card bills, settle a lawsuit and to repair a house he owned in Florida.

    Tens of millions more went to pass the corrupt bailout — House Bill 6 — and to fund a thuggish campaign to thwart a citizen-initiated repeal.

    Earlier in the hearing, Assistant U.S. Attorney Emily Glatfelter said Householder used FirstEnergy’s dark money to crush a “citizen veto” and “because of this House Bill 6 remains in effect today.”

    That’s also because Republican supermajorities in Ohio’s gerrymandered legislature have refused to repeal the corrupt law even after arrests were made, and as they try to make it virtually impossible for citizens to initiate amendments to the Ohio Constitution.

    Also arrested in the scandal were lobbyists Juan Cespedes and Jeffrey Longstreth — who cooperated with prosecutors within days of their arrests — and Neil Clark, who died by suicide. Former Ohio GOP Chairman Matt Borges is slated for sentencing at 11 a.m. today, Friday.

    Steven Bradley, Householder’s attorney, sought leniency for his client. Referring to the possibility of a 20-year sentence, he said “That is effectively a life sentence for Larry Householder given his age and health situation.”

    Householder is 64 and overweight.

    Bradley argued that his client was around 60 when the racketeering conspiracy began in late 2016 and that prior to that, Householder did “innumerable” good deeds “for decades.” A 20-year sentence would “effectively give no consideration” to those good deeds, Bradley said.

    But when he spoke on his own behalf, Householder appeared to do more to harm his case than to help it, just as he did at trial.

    “My greatest commitment is to my creator… My next commitment is to my family,” he read from a prepared statement as he stood at the podium.

    Householder said that in the course of 38 years of marriage, “I can count on one hand” the number of nights he spent away from his wife, Taundra. Householder also described the crushing pain they suffered when they lost a four-year-old daughter.

    But then he pushed his claims past the point of plausibility.

    He said Taundra was planning to retire from her teaching position and next year, when he turns 65, he wanted to retire as well, saying he planned to “hang up my suit and tie.”

    Householder made that statement in the same courtroom where, only three months earlier, prosecutors put on testimony and displayed bank records and written messages from early 2020 that showed FirstEnergy and AEP putting money into dark money groups intended to fund an effort to change the state’s term limits so Householder could stay in office for as long as 16 more years.

    The former House speaker also implied that he wanted a lenient sentence not for himself, but for his family. Taundra, he said, would be alone while “I’ll be in a cold cell hours away.”

    But what might really have set Judge Black off was Householder’s profession of selfless public service.

    “My life has been a total and full dedication to making life better for those I serve,” he said.

    Black described voters who put out Householder yard signs, donated their hard-earned money to his campaigns, and pushed a button for him in the voting booth.

    “I’m not talking about some corporation or the (former FirstEnergy CEO) Chuck Joneses of the world,” Black said. Householder’s constituents who supported him “were saying, ‘I’m choosing to trust you,’ and you betrayed that trust,” the judge said.

    Black used Householder’s own words to give the lie to his claims. He quoted several recordings of Householder that were surreptitiously made during the conspiracy and played at trial.

    “If you’re going to fk with me, I’m going to fk with your kids,” Householder said in one of them.

    “Bottom line, you were a bully,” the judge said.

    If the federal racketeering statute didn’t cap sentences for a single count at 20 years, sentencing guidelines would have recommended life for the former House speaker, Black said. One reason for that is because Householder’s use of a mountain of hidden corporate money to elect a legislature, pass an exponentially bigger bailout for the company, and to crush a citizen repeal is “an assault on democracy,” the judge said.

    Black explained the special harm done by public corruption like that committed by Householder and his co-conspirators. To do so, he quoted former President Theodore Roosevelt, who ironically advocated the citizen-initiated amendment process in Ohio that Householder’s former Republican colleagues in state government are now trying to gut.

    “There can be no crime more serious than bribery,” Roosevelt said in a 1903 message. “Other offenses violate one law while corruption strikes at the foundation of all law.”

    When Borges, the former GOP chair, is sentenced today, it’s unclear what he’ll face. His involvement in the conspiracy was considerably less than Householder’s, but Judge Black showed that he’s not much in the mood for leniency when it comes to Ohio’s corrupt political culture.

    Also uncertain is when — or if — others might be charged.

    Former FirstEnergy CEO Chuck Jones and Vice President Micheal Dowling — as well as former FirstEnergy Solutions President John Kiani — directed the flood of corporate dollars into the Householder-controlled dark money groups, according to prosecutors.

    And FirstEnergy admitted in a deferred prosecution agreement that it paid  a $4.3 million bribe to Sam Randazzo just as Gov. Mike DeWine was appointing him to chair the Public Utilities Commission. Randazzo the helped draft the corrupt bailout law, according to trial testimony.

    On the steps of the Potter Stewart U.S. Courthouse just after the sentencing, U.S. Attorney Kenneth Parker was asked when or whether those men or others might be charged.

    “We continue to look through evidence and we continue to listen to recordings and speak to individuals, so if something’s there we’re going to go there, too, and address it,” he said.

    Marty Schladen
    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.

    MORE FROM AUTHOR

  • Former Ohio speaker, GOP chair found guilty of racketeering

    Former Ohio speaker, GOP chair found guilty of racketeering

    Former Ohio House Speaker Larry Householder gives the thumbs up as he enters the courthouse where he is expected to testify Wednesday, March 1, 2023. Photo from WEWS.

    BY: MARTY SCHLADEN – MARCH 9, 2023 2:03 PM Ohio Capital Journal

    CINCINNATI — After more than nine hours of deliberation, a jury on Thursday found former Ohio House Speaker Larry Householder and state Republican Chairman Matt Borges guilty of felony racketeering charges in connection with a billion-dollar utility bailout that was passed in 2019.

    Both men face maximum sentences of 20 years in what prosecutors said was likely biggest bribery and money laundering scandal in Ohio history. U.S. District Judge Timothy Black will schedule a sentencing hearing.

    After the verdict, one of Householder’s attorneys, Steven Bradley, confirmed what observers have suspected almost from the start of testimony.

    “Of course we’re going to appeal the verdict,” he told reporters minutes after the jury left the courtroom. Householder stood off to the side in a blue business suit, clutching a camouflage trucker cap.

    He affirmed that he would continue to fight the charges.

     Convicted felon Larry Householder outside the federal courthouse in Cincinnati where a jury found him guilty of racketeering. Photo by Marty Schladen, Ohio Capital Journal.

    “This is just the first step in the process,” Householder said. “Stay tuned.”

    As part of the racketeering scheme, Akron-based FirstEnergy and other utilities paid tens of millions into an effort to elect friendly lawmakers in 2018 who would vote to make Householder speaker the following year. Immediately after taking the speaker’s gavel, Householder worked furiously to pass a $1.3 billion bailout, the vast majority of which benefited FirstEnergy subsidiary FirstEnergy Services.

    The company was being dragged down by losses from its nuclear and coal plants and executives were seeking a bailout. While it got more than $1 billion out of the deal, Householder got political power as well as more than $500,000 personally, jurors found. Borges played a smaller role, but he paid a $15,000 bribe to help defeat an attempt to repeal the bailout and he received more than $100,000 in funds that originated with FirstEnergy, prosecutors said.

    The verdict could have far-reaching implications for the use of “dark money” — funds paid into 501(c)(4) organizations that don’t have to reveal the sources of their funding. In the wake of the 2010 U.S. Supreme Court decision Citizens United v FEC, the use of such funds has become ubiquitous in state and national politics.

    Thursday’s verdict might start to start to draw some boundaries around such expenditures.

    In the case of the Ohio bailout, a financially strapped Householder found common cause with a financially ailing FirstEnergy. After paying billions to prop up a subsidiary with failing and nuclear and coal plants, the parent corporation in 2016 decided to send the subsidiary into bankruptcy. They wanted a ratepayer subsidy for the failing nuclear and coal plants so they could be sold off after the subsidiary emerged from bankruptcy.

    FirstEnergy’s top executives were seeking a bailout at the same time a financially strapped Householder was seeking a return to the Ohio speakership. Their relationship grew in luxurious settings that belied the financial problems besetting both.

    Householder attended a World Series game in November 2016 in the FirstEnergy box in Cleveland with CEO Chuck Jones. Two months later, Householder flew to Donald Trump’s inauguration aboard FirstEnergy’s private jet and stayed in the same $500-a-night hotel as Jones. Prosecutors showed the jury photos of Householder’s son and a FirstEnergy executive in the back of a limousine just outside a fancy steakhouse dinner.

    Within weeks of the inauguration, Householder’s underling set up Generation Now, a 501(c)(4) dark money group into which FirstEnergy almost immediately started pouring what would become tens of millions of dollars.

    The money was used to fund support staff for candidates who would vote to make Householder speaker and to finance attack ads against their opponents.

    When opponents started gathering signatures to repeal the bailout law, House Bill 6, FirstEnergy poured $36 million into an effort to block it. Householder took control of the push to block the repeal, while Borges assisted — both by pressuring Attorney General Dave Yost and by paying $15,000 for inside information about the petition campaign.

     Center, former Ohio Republican Party chair, and statehouse lobbyist, Matt Borges with his attorneys outside of the federal courthouse. Photo courtesy of WEWS.

    That money was used to finance a torrent of misleading, anti-China ads and a petition-blocking effort that in some cases devolved into outright battery, witnesses testified.

    And because it was dark money, the public couldn’t know that it was FirstEnergy that was financing the gargantuan fight to pass and protect a much larger bailout from which it benefited — until federal law enforcement stepped in. During the trial, investigators from the FBI described how they used accountants, informants, subpoenas and wiretaps to unravel the tangle of dark money groups and political-action committees that were used to obscure the origins of the funds that were used in the scheme.

    “Today was a victory for the people of Ohio,” U.S. Attorney Kenneth L. Parker said on the steps of the Potter Stewart U.S. Courthouse shortly after the verdict. Parker declined to answer whether further indictments can be expected in the case — including for Jones and other FirstEnergy executives who paid the money that the jury on Thursday determined to be bribes.

    Also unknown is whether Gov. Mike DeWine’s first appointee to chair the Public Utilities Commission of Ohio, Sam Randazzo, will be charged. Randazzo took $4.3 million from FirstEnergy shortly before being nominated to the post and once nominated, he helped write the bailout law, House Bill 6. He resigned shortly after the FBI searched his Columbus condo in 2020.

    The verdict might be sending shock waves around Capitol Square and other power centers because defense attorneys for Householder and Borges argued that the conduct described by prosecutors was perfectly legal — politics as usual.

    In a statement, Parker offered a different take.

    “As presented by the trial team, Larry Householder illegally sold the statehouse, and thus he ultimately betrayed the great people of Ohio he was elected to serve,” the U.S. attorney said. “Matt Borges was a willing co-conspirator, who paid bribe money for insider information to assist Householder. Through its verdict today, the jury reaffirmed that the illegal acts committed by both men will not be tolerated and that they should be held accountable.”

    Outside the courthouse, Householder said that he will go back to his Perry County farm to plant a garden and fish with his kids while federal authorities complete a pre-sentence report and a sentencing hearing is scheduled.

    That his attorneys plan to appeal has been suspected almost since testimony began on Jan. 23. On Feb. 1, they undertook the risky gambit of accusing Judge Black of being biased against their client in open court.

    They also took a risk by placing Householder on the stand to testify in his own behalf. During cross examination, Assistant U.S. Attorney Emily Glatfelter confronted Householder with numerous inconsistencies and apparent falsehoods.

    Householder was asked just after the verdict if he thought the decision to testify was a mistake. He said it wasn’t

    “I waited two-and-a-half years to tell my story,” he said. “I wanted the opportunity to speak.”