Tag: Larry Householder

  • FirstEnergy admits it controlled dark money group started by DeWine aide

    FirstEnergy admits it controlled dark money group started by DeWine aide

    BY: MARTY SCHLADEN and Ohio Capital Journal

    Columbus, Ohio – The mammoth scandal surrounding a 2019 energy bailout appeared to creep closer on Thursday to the administration of Ohio Gov. Mike DeWine.

    FirstEnergy said in a deferred prosecution agreement that the man DeWine appointed to lead the Public Utility Commission of Ohio took a $4.3 million payment and then acted on behalf of the Akron-based power company instead of as the state’s top regulator. 

    That man, Sam Randazzo, has resigned. 

    But FirstEnergy also helped control a 501(c)(4) “dark-money” group started by a senior DeWine aide while he was still a FirstEnergy lobbyist, the agreement showed. The company passed a torrent of money through the secretive group as part of a successful $61 million effort to buy a $1.3 billion, ratepayer-funded bailout, the document FirstEnergy signed off on said.

    While Acting U.S. Attorney Vipal J. Patel slammed the dark money group, DeWine and the aide, Legislative Affairs Director Dan McCarthy, didn’t respond to requests for comment. DeWine has staunchly defended McCarthy since the scandal broke almost exactly a year ago.

    Patel held a press conference in Cincinnati on Thursday to announce that his office had entered into a deferred prosecution agreement with FirstEnergy. The company will pay $230 million and, if it lives up to the terms of the agreement, will have a charge of conspiracy dismissed.

    Former Ohio House Speaker Larry Householder, R-Glenford, has been charged in the case. He was stripped last year of his speakership and he was ejected from the House earlier this year.

    Two of Householder’s associates charged in the case have pleaded guilty and a third, Neil Clark, took his own life in March.

    For its part, FirstEnergy fired CEO Chuck Jones and two other executives and is conducting an investigation of its own.

    In Cincinnati Wednesday, Patel stressed that the investigation is continuing. But he wouldn’t comment on matters other than the agreement with FirstEnergy. 

    DeWine aide McCarthy hasn’t been charged and last summer, he denied wrongdoing. But Partners for Progress, the dark-money group he founded, was a topic of the prosecution agreement.

    Then still a FirstEnergy lobbyist, McCarthy founded it, “weeks after certain FirstEnergy Corp. senior executives traveled with (Householder) on the FirstEnergy Corp. jet to the presidential inauguration (of Donald Trump)  in January 2017,” the agreement said.

    The prosecution agreement added, “Although Partners for Progress appeared to be an independent 501(c)(4) on paper, in reality, it was controlled in part by certain former FirstEnergy Corp. executives, who funded it and directed its payments to entities associated with public officials. 

    “For example, FirstEnergy Corp. executives directed the formation of Partners for Progress and decided to incorporate the entity in Delaware, rather than Ohio, because Delaware law made it more difficult for third parties to learn background information about the entity. Certain FirstEnergy Corp. executives were also involved in choosing the three directors of Partners for Progress, two of whom were FirstEnergy Corp. lobbyists.”

    Millions would flow through Partners for Progress while McCarthy was its president and tens of millions more would later run through it and into the furious effort to pass the bailout after McCarthy resigned to become DeWine’s legislative affairs director in early 2019.

    The prosecution agreement also appears to refer to McCarthy as “Official Aide 1”  as he worked on DeWine’s behalf to help pass the bailout that DeWine would sign later that year.

    It cites emails among energy executives saying that Official Aide 1 and others were “fighting” to extend the term of a bailout of two failing nuclear reactors in Northern Ohio.  It also cites a text-message discussion between a FirstEnergy executive and the aide about language that would make the bailout harder to challenge in a referendum.

    And in the press conference, Patel said the scandal would never have happened if not for the dark-money group of which McCarthy was president and another, Generation Now, which has pleaded guilty.

    “This effort would not have been possible — both in the nature and the amount of the money provided — without the use of 501(c)(4)s,” Patel said.

    The acting U.S. attorney called the scheme, and even the name of McCarthy’s former dark-money group, dishonest.

    “These are supposed to be, according to the (tax) code, social welfare organizations. You all see a lot of social welfare going on? I don’t,” Patel said, adding, “What about these names? Partners for Progress? What are the partners here? The conspirators? What’s the progress? Passage of (the energy bailout) through bribery?”

    While DeWine’s office didn’t respond to questions on Thursday, the governor in February defended his legislative affairs director.

    “As far as I know, Dan McCarthy has been well-respected for many, many years, long before he started working for me as our legislative director and I have faith in his integrity,” DeWine said.

    For Dayton Mayor Nan Whaley, a Democrat challenging DeWine in the 2022 election, that’s not good enough.

    “Today’s charges make clear that this corruption case reaches the highest levels of government in Ohio,” she said in a statement. “Enough is enough. It’s time for Gov. DeWine to come clean about his knowledge and involvement in this scandal.”

  • Nearly a year after a racketeering indictment, Ohio House expels Larry Householder

    Nearly a year after a racketeering indictment, Ohio House expels Larry Householder

    By Jake Zuckerman and Ohio Capital Journal

    Larry Householder addresses reporters June 16 after lawmakers voted to expel him from the General Assembly. Photo by Jake Zuckerman.

    Federal prosecutors accused the men of secretly accepting $61 million from FirstEnergy Corp

    The Ohio House voted Wednesday to expel Larry Householder, arrested on charges of public corruption nearly one year ago, from the chamber his Republican — and even some Democratic — colleagues thrice elected him to control.

    The expulsion could mark the end of Householder’s decades-long political career, which has included a previous tenure as speaker of the House in the 2000s that was derailed by a separate FBI investigation. No charges were filed.

    The House voted 75-21 to eject Householder. All but one Democrat voted in support.

    Wednesday’s vote extinguishes Householder’s political flame, but he remains innocent until proven guilty as his criminal trial draws nearer. Both he and former Ohio Republican Party chairman turned lobbyist Matt Borges await trial.

    Jeff Longstreth, Householder’s former political adviser, and Juan Cespedes, a lobbyist, both pleaded guilty to racketeering charges. Neil Clark, a lobbyist and once a towering figure in Ohio politics, was charged as well but pleaded innocent. He died by suicide before trial.

    Federal prosecutors accused the men of secretly accepting $61 million from FirstEnergy Corp via a dark money, pass-through entity. They allegedly used the funds for personal enrichment and to engineer the passage of House Bill 6, a coal and nuclear bailout worth an estimated $1.3 billion to the company.

    After his July 2020 arrest, House lawmakers quickly dethroned Householder as speaker. However, all but a handful of Republicans voted down an effort from Democrats to expel him. Speaking to House leadership on Tuesday, a confident Householder denied the allegations against him. On Wednesday, he listened from the House floor in silence as lawmakers publicly debated his fate.

    Those seeking his ouster emphasized the House is not a courtroom and thus can apply its own professional standards. They said the 43-page indictment and the plea deals entered into by two allies (and one dark money political entity) warrant his ouster from public office.

    “If selling legislation does not count as disorderly conduct, then frankly, nothing does,” said Rep. Brian Stewart, R-Ashville, who sponsored the expulsion resolution along with Rep. Mark Frazier, R-Newark.

    Rep. Kyle Koehler, a Republican who voted against HB 6, dismissed those trying to reduce Householder’s indictment as “allegations.” He identified himself as the anonymous “Representative 6” in the indictment itself, which describes the unnamed lawmaker subjected to political pressure funded by FirstEnergy for his vote.

    “These things occurred,” Koehler, one of few who have publicly demanded Householder’s ouster in recent months. “They’re not accusations. They’re not speculations.”

    Householder’s defenders argued it’s premature to punish Householder before he faces trial. Some argued that the allegations against him don’t qualify as “disorderly conduct,” the undefined Constitutional threshold for expulsion.

    “This is about due process. It’s about the Constitution. It’s not about that man sitting right over there,” said Rep. Al Cutrona, R-Canfield, pointing at Householder.

    What’s more, he won reelection in November, despite the indictment against him.

    “We do not get to choose who represents someone else’s district,” said Rep. Nino Vitale, R-Urbana, who chaired a committee specially created by Householder to review HB 6.

    At around 3 p.m., Householder began what would be his last floor speech of the 134th General Assembly.

    He reiterated a claim of his innocence, said that the allegations against him do not qualify as disorderly conduct, and criticized lawmakers for banishing from a chamber without gathering any evidence of their own.

    “I have not, nor have I ever, took a bribe, or provided a bribe,” he said. “I have not, nor have I ever, solicited a bribe. And I have not, nor have I ever, sold legislation.”

    After the vote, Householder approached the clerk and walked out from the chamber. He reiterated claims of his innocence to reporters gathered outside. There, he left open the possibility of a return to public office, and issued a warning to those who he feels crossed him.

    “Fellow elected officials who didn’t like public citizen Householder, are really not going to like private citizen Householder,” he said.

    This is a developing story and will be updated.

  • Utility and fossil fuel influence in Ohio goes beyond passage of bailout

    Utility and fossil fuel influence in Ohio goes beyond passage of bailout

    Dark money loopholes remain, while people linked to utilities and fossil fuels hold public office or enjoy ongoing access to government officials.

    by Kathiann M. Kowalski

    Dark money loopholes remain in Ohio law, despite last month’s surgical repeal of part of the law at the heart of a $60 million corruption scandal. Meanwhile, more evidence has emerged in recent months, detailing the flow of money by groups engaged in the House Bill 6 scandal and showing close ties between current and former utility lobbyists and Gov. Mike DeWine, as well as various lawmakers.

    “We need to learn from our mistakes,” said Catherine Turcer, executive director of Common Cause Ohio, a group that advocates for more transparency and accountability in politics. She noted that the House Bill 6 case is just the latest in a line of corruption scandals that have rocked state politics in the past two decades.

    A federal complaint released last July alleged an unlawful conspiracy to elect lawmakers who would favor Rep. Larry Householder as House speaker, secure passage of House Bill 6 and defend it against a referendum. A court filing by FirstEnergy in March admits that millions of dollars went from one of its subsidiaries either directly or indirectly to Generation Now, the primary dark money group at the center of the alleged scheme, or to other entities alleged to have played roles. Some funds were paid at the direction of FirstEnergy Solutions, the document claims.

    In addition to promptly repealing the whole law, legislators should have pursued action to prevent such a situation from happening again, Turcer said. Instead, “there was not any indication in place during the summer of a path of how to make sure we don’t create a space for misdeeds.”

    Efforts by FirstEnergy and others to make political contributions through dark money organizations — 501(c)(4) nonprofits and some political for-profits that are not required to disclose their donors — have touched numerous entities with connections throughout the Ohio government, according to data from various sources.

    The Accountability Project is a national database that collects records of federal campaign contributions, grants from nonprofits, expenditures by political action committees and more. The database also identifies shared addresses and other links among individuals and organizations.

    Among other things, the database reveals that Generation Now’s address shown on a 2017 corporate filing was the same as that for co-defendant Jeff Longstreth and his business JPL & Associates. JPL & Associates was shown as the president and secretary on an October 2019 IRS filing by Generation Now.

    The Accountability Project information also indicates that in 2018 Generation Now and JPL & Associates did business at a Capitol Square office tower. The same suite address was used at various times that same year for Friends of Larry Householder, the Committee to Elect Bill Roemer, Harris for Ohio and  Barhorst for Ohio.

    In earlier years the same suite address had been used by the Coalition for Growth and Opportunity, which received money from an American Electric Power-funded group. The office suite is unoccupied now, but at some earlier point the suite also had been the office address for a bespoke tailoring business. (The company moved out of the space years ago, Eye on Ohio and the Energy News Network learned.)

    Nonetheless, utilities and fossil fuel interests seek to continue to tailor Ohio energy policies to their benefit. Among other things, most candidates elected in 2018 whose campaigns got money from the alleged HB 6 scheme were reelected in 2020. Their incumbent statuses would have given them a bump, according to David Anderson, policy and communications director for the Energy and Policy Institute. Federal filings indicate substantial additional spending for the last election cycle as well, he added.

    FirstEnergy and its political action committee reported more than $1.1 million in campaign donations for 2019 and 2020, primarily to Republicans, the National Institute on Money in Politics reports. Nearly half a million of that went to candidates in Ohio.

    Those reported amounts don’t include spending by any dark money groups the company or other energy companies with utilities in Ohio might have donated to. The Growth & Opportunity political action committee had spent money in early 2020 to influence several Ohio primaries, Anderson noted.

    Close ties

    DeWine signed HB 6 into law within hours of its passage in July 2019. Even after HB 6 passed, close ties have remained between utilities and fossil fuel interests, on the one hand, and leadership in Ohio’s legislative and executive branches.

    Since the federal complaint was released last July 21, DeWine has stood by Dan McCarthy, whom he appointed as his director of legislative affairs in early 2019. As a lobbyist at the Success Group in Columbus, McCarthy had long been active in state politics and has contributed to a variety of campaigns, as data from the Accountability Project shows.

    McCarthy was a registered lobbyist representing FirstEnergy in 2017 and 2018, when the events alleged in the HB 6 conspiracy began, according to data from the Ohio Lobbying Activity Center. He also was president of Partners for Progress, the FirstEnergy-funded “Energy Pass-Through” organization that allegedly funneled millions of dollars into efforts to pass and preserve HB 6.

    The bio released by DeWine’s office when he appointed McCarthy in 2019 shows that he had previously managed several political campaigns in addition to working for the Success Group. McCarthy resigned from Partners for Progress before assuming his current government position. 

    His former Success Group colleague McKenzie Davis was a director for Partners for Progress through at least 2019, according to a November 2020 IRS filing by the group. The report also shows R. Scott Davis as president and secretary, and lawyer Michael Van Buren at Calfee, Halter & Griswold in Cleveland as treasurer. 

    The IRS filing showed that $13 million went from Partners for Progress to Generation Now in 2019, plus additional amounts to other organizations for “political campaign intervention,” lobbying and “educating the public about utility options.” Funds from two of those dark money groups supported DeWine’s campaign, as well as an unsuccessful campaign by his daughter Alice DeWine, the Cincinnati Enquirer has reported.

    Other lawyers at Van Buren’s firm represented FirstEnergy in cases before the Public Utilities Commission of Ohio, including one begun after news of the HB 6 scandal broke, for the purpose of determining if funds from FirstEnergy’s utility ratepayers were spent on HB 6 activities. Attorneys from Jones Day are now counsel in some of those cases.

    “It looks a bit different when the lawyers who defend you work for the firm that was part of that political spending,” Anderson said. Van Buren and a colleague did not respond to an inquiry about the reason for the change.

    On call

    FirstEnergy was not the only utility with ongoing links to the governor’s office. An October 2019 email recently released by Common Cause Ohio last month shows that the DeWine-Husted campaign held a weekly finance call, even though they’re not up for reelection until next year. The call list included multiple people with ties to utilities and fossil fuels, including FirstEnergy lobbyist Josh Rubin of the CJR Group, Duke Energy Business Services lobbyist Chip Gerhardt of Government Strategies Group, and Ohio Coal Association lobbyist Richard Hillis of Governmental Policy Group. The Governmental Policy Group’s address has been used by several political action committees throughout the years, Accountability Project data show.

    Also on the DeWine-Husted finance call list was J.B. Hadden, who has been president of Empowering Ohio’s Economy, one of the dark money groups that had also paid money to Generation Now. As of last summer, American Electric Power had contributed a total of $8.7 million to Empowering Ohio’s Economy since 2015, including $700,000 in 2019, according to company spokesperson Scott Blake. “We will continue to legally and ethically advocate on behalf of our customers and our company,” Blake said.

    AEP’s vice president for external affairs, Tom Froehle, also has been a board member of Empowering Ohio’s Economy, dating back to 2016, Blake confirmed.

    Froehle and AEP Director of Government Affairs Maria Haberman met with Householder in February 2020, after HB 6 was law but before the scandal broke last summer, Anderson noted. Householder’s calendar didn’t indicate what the meeting was about.

    As for Empowering Ohio’s Economy, its 2019 tax filing showed more than half a million dollars going to Generation Now. Donations to several other organizations included a $25,000 contribution to the Ohio Governor’s Residence & Office Fund, which is yet another dark money group. It has spent nearly $200,000 on meetings at the residence “to promote better and more efficient government.”

    Another $2 million went from Empowering Ohio’s Economy to another dark money group, Open Road Path, in 2019 “to promote economic and business development within Ohio.” Hadden did not respond to a request for additional information for this article.

    Regulatory connections

    Anne Vogel, former managing director of AEP’s government affairs office, became DeWine’s assistant director for energy and natural resources starting in March 2019. By July, HB 6 was passed. 

    In December 2020, Vogel became a finalist to replace Sam Randazzo as chair of the Public Utilities Commission of Ohio. Randazzo resigned the day after a FirstEnergy government filing stated that the company had paid $4 million in early 2019 to an entity apparently linked to Randazzo. After criticisms surfaced about last December’s list of PUCO nominees, DeWine ultimately asked for additional names and appointed Jenifer French to the post.

    The PUCO nominating council likewise has connections to utilities and fossil fuel interests. Chair Michael Koren was a registered lobbyist for FirstEnergy through 2019. He chaired the committee that nominated Randazzo for the PUCO in 2019. Ohio Lobbying Activity Center data shows Koren also has been a lobbyist for Columbia Gas and Boich Companies, which made its fortune in the coal industry.

    Randazzo’s calendar for the time he was PUCO chair shows multiple meetings with people from utility companies or their parent corporations, as well as with coal fleet lobbyist Michelle Bloodworth

    “I am unaware of any meeting in which a commissioner held a discussion of pending proceedings,” said PUCO spokesperson Matt Schilling, noting that meetings otherwise “could have been regarding any number of general energy or commercial transportation matters relative [to] the delivery of adequate, safe and reliable utility service.”

    Nonetheless, the Energy and Policy Institute’s Anderson said, the absence of detailed notations in the calendar presents “definitely a lot of potential conflicts.”

    Accountability Project data also shows that AEP’s Froehle, Randazzo and Scott Elisar, the PUCO’s current legislative and policy director, all had worked at the same law firm, McNees, Wallace & Nurick. The firm has long represented Industrial Energy Users-Ohio, which has pushed for limiting clean energy standards, and whose members have long enjoyed favorable rates from utilities.

    Still ahead

    Dark money loopholes made the alleged HB 6 scheme possible. “Dark money is a breeding ground for corruption,” former U.S. attorney David DeVillers said when the indictment was filed last July. The federal investigation continues, although the pandemic delayed some grand jury proceedings, he told the Ohio Consumers’ Counsel Governing Board on March 16. In-person meetings of the grand jury have recently resumed, he noted.

    “[For] a lot of these cases that have been on the back burner, you can expect to see a lot more indictments coming,” DeVillers said.

    This year, House Bill 13 aims to address some dark money issues. A hearing will be held in the coming week, so there’s at least some potential for lawmakers to take action this session. But so far, Turcer said, “it’s just that they have completely dragged their feet.”

    __________________________________

    This story is part of a collaborative journalism project produced by the Energy News Network and Eye on Ohio, the Ohio Center for Investigative Journalism. Funding is provided by the Cleveland Foundation, the George Gund Foundation, and the Accountability Project at American University’s Investigative Reporting Workshop.

    This article first appeared on Eye on Ohio and is republished here under a Creative Commons license.


    This article provided by Eye on Ohio, the nonprofit, nonpartisan Ohio Center for Journalism in partnership with the nonprofit Energy News Network. Please join our free mailing list or the mailing list for the Energy New Network as this helps us provide more public service reporting.


  • DeWine refuses to explain aide’s role in bailout scandal

    DeWine refuses to explain aide’s role in bailout scandal

    By Marty Schladen and Ohio Capital Journal

    If you asked most people to start up a dark money group and then funnel more than $1 million through it and into another such group, they’d probably want to know what it was going to be used for.

    But now that the second 501(c)(4) dark-money group, Generation Now, has pleaded guilty to being at the heart of one of the biggest bribery and money laundering scandals in Ohio history, Gov. Mike DeWine is refusing to discuss what one of his top aides was told when he formed the first dark money group, Partners for Progress.

    Generation Now pleaded guilty earlier this month to being the major conduit of money between Akron-based FirstEnergy and related organizations and the effort to pass House Bill 6, a $1.3 billion bailout that mostly went to two nuclear plants FirstEnergy started spinning off in 2016. DeWine signed the bill into law in 2019.

    Last summer, federal authorities arrested then-Speaker Larry Householder and four associates as part of the scandal and two of the associates later pleaded guilty.

    As he announced the arrests, U.S. Attorney David DeVillers stressed that the dark money made the massive scandal possible.

    “I don’t see how (the conspiracy) could possibly have happened” without it, DeVillers said.

    The feds haven’t accused DeWine’s aide, Legislative Affairs Director Dan McCarthy of wrongdoing, but they refer to his dark-money group in an affidavit supporting Householder’s arrest as “Energy Pass-Through.”

    Among the activities Generation Now pleaded guilty to was engaging in transactions “designed to conceal the nature, source, ownership and control of the payments” from FirstEnergy and associated companies.

    But DeWine and McCarthy don’t want to discuss whether McCarthy intended to obscure that FirstEnergy was bankrolling an effort to prop up nuclear plants it was spinning off.

    Asked last week about the matter, DeWine Press Secretary Dan Tierney pointed to a statement McCarthy issued last summer when The Cincinnati Enquirer first reported that he’d started a dark money group that helped fund the HB 6 effort.

    In it, McCarthy explained that in addition to his lobby work for FirstEnergy, he had also worked with people who had adversarial relationships with Householder and one of his indicted associates, Neil Clark, so “any insinuation I was involved in this disgusting scheme is without merit.” 

    But he didn’t explain why he founded Partners for Progress two days after the founding of Generation Now, or why a week later his dark money group got $5 million from FirstEnergy and within a month it was forwarding some of that money to Generation Now. 

    In early 2019, McCarthy stopped lobbying for FirstEnergy and resigned as president of Partners in Progress to become DeWine’s legislative affairs director. The following October, while McCarthy was advocating for HB 6 in that capacity, FirstEnergy and associates wired $20 million to McCarthy’s former money group and it forwarded $10 million of that to Generation Now the same month, the federal affidavit said.

    Despite these and other revelations about DeWine appointees, DeWine on Tuesday declined to give a more complete explanation of what McCarthy believed he was doing when he started Partners for Progress and began funneling money into a now-guilty dark money group.

    “As far as I know, Dan McCarthy has been well-respected for many, many years, long before he started working for me as our legislative director and I have faith in his integrity,” DeWine said.

  • Untitled post 64629

    by  Tyler Buchanan and Ohio Capital Journal

    David DeVillers, the U.S. Attorney whose office has led the prosecution of former Ohio House Speaker Larry Householder, will soon be replaced, Sen. Sherrod Brown confirmed on Thursday.

    DeVillers was appointed to the position by President Donald Trump and confirmed by a Republican-led U.S. Senate in 2019. Brown told reporters that both U.S. Attorney positions in Ohio would be replaced with Democrats regaining control of the White House and U.S. Senate.

    The U.S. Attorney for the Northern District of Ohio already resigned earlier this month. DeVillers will be staying on until a successor is appointed and confirmed, according to Brown’s office. 

    While it is common for presidents to replace federal attorneys upon taking office, some had called for the Biden administration to keep DeVillers in his post. 

    “Every president is entitled to, with Senate approval, his own team of federal prosecutors,” wrote Mark Weaver, a former deputy attorney general of Ohio, in a Columbus Dispatch guest column last month. “However, as Ohioans know, DeVillers is leading an aggressive and much-needed effort to stem the tide of pernicious public corruption that shatters faith in government.”

    Brown has issued a call for applicants to the U.S. Attorney position, with the web page stating he “will be working to recommend candidates to the Biden Administration.”

    DeVillers became the face of the Householder prosecution when he appeared at a press conference to announce racketeering charges against the speaker and four of his political operatives. The five were arrested July 21 as part of an alleged $61 million bribery scheme to get a $1.3 billion nuclear bailout bill enacted in 2019, which DeVillers described as being “likely the largest bribery and money-laundering scheme ever in the state of Ohio.”

    Two of those charged have since pleaded guilty, while the others (including Householder) have pleaded not guilty and await trial. 

    More recently, DeVillers pledged justice would be served against anyone from the Southern District of Ohio who committed crimes during the attempted U.S. Capitol insurrection:

  • Investigation of $460M in FirstEnergy charges back on, but why was it stopped in the first place?

    Investigation of $460M in FirstEnergy charges back on, but why was it stopped in the first place?

    By Marty Schladen and Ohio Capital Journal

    The Public Utility Commission of Ohio has restarted an audit of $465 million that Akron-based FirstEnergy collected from ratepayers in 2017 and 2018, supposedly to modernize the utility grid.

    The state’s official watchdog, the Office of the Ohio Consumers’ Counsel, wants to know whether any of the money was used in a $61 million bribery scandal. That affair so far has resulted in a $1.3 billion nuclear bailout, the indictment of then-House Speaker Larry Householder and the guilty pleas of two of his associates.

    But why the audit was called off in the first place also raises serious questions.

    Leading the commission in voting to shut down the audit was Chairman Sam Randazzo. He resigned in November after FirstEnergy disclosed that it paid $4 million to someone just before he started regulating the utility in early 2019. Gov. Mike DeWine later said that Randazzo received the payment, but DeWine said he was unaware of it when he appointed the former FirstEnergy lobbyist to chair the PUCO.

    For its part, FirstEnergy fired its CEO, Chuck Jones, when news of the payment came to light.

    The Randazzo-led utility commission’s timing in stopping the audit might seem strange. It came just after the Ohio Supreme Court ruled in January 2020 that the charge FirstEnergy had been collecting was unlawful — seemingly a time when a regulator would want to know more about what happened with the funds.

    A big reason why the court struck down the distribution-modernization charge: Despite allowing FirstEnergy to collect almost a half-billion extra dollars from ratepayers, the PUCO didn’t implement effective rules to ensure that FirstEnergy used the money to update the utility grid.

    “Utility companies can be expected to respond to financial motivations, but not if the commission awards them money up front with no meaningful conditions attached,” the decision said. “The PUCO staff’s wishful thinking cannot take the place of real requirements, restrictions, or conditions imposed by the commission for the use of (distribution-modernization) funds.”

    Not only did the PUCO call off the audit just as the charge was declared illegal, it did so as the auditors were making some interesting findings.

    For example, it found that instead of using all the funds to improve its Ohio distribution system, FirstEnergy was placing some in a “Regulated Utility Money Pool,” from which out-of-state utilities could borrow.

    To justify ending the audit — for which PUCO staff wanted more time — Randazzo and the other commissioners claimed that’s what the Supreme Court wanted.

    “The court directed the commission to eliminate” the distribution-modernization charge, the PUCO wrote in its dismissal. “In support of this ruling, the court specifically objected to the usefulness of the proposed final review, questioning the lack of an effective remedy resulting from such review.”

    However a reading of the Supreme Court’s opinion doesn’t mention any “specific objection” to the audit.

    The relevant passage says that the auditors final report wouldn’t be available until after FirstEnergy had collected and spent the money.

    “Thus, it is not clear what remedy would be available should the commission (or this court on appeal) find that FirstEnergy has misused DMR funds,” the ruling said.

    One reason there’s no remedy, the court noted, is because when it allowed FirstEnergy to jack up its rates, the PUCO didn’t create any mechanism to refund the money to ratepayers if the charge is later declared unlawful or if it is shown the  money was misused.

    “FirstEnergy has been recovering (distribution-modernization) revenue since January 1, 2017, and the commission did not make the (revenue) subject to refund if FirstEnergy does not meet the required conditions,” the court wrote.

    The $465 million FirstEnergy collected from the upcharge isn’t the only such money collected — and kept — by Ohio utilities. The consumer’s counsel reports that since 2009, $1.5 billion has been collected from Ohio ratepayers in upcharges that were later struck down by the courts. 

    As with the FirstEnergy charge, the PUCO didn’t create a mechanism to force other utilities to pay back the extra money they got back, either. 

    FirstEnergy objected to reopening that audit, but wouldn’t comment further Monday. 

    “Due to the ongoing PUCO audits, FirstEnergy is unable to provide additional information at this time,” spokeswoman Jennifer Young said in an email.

    In a filing, the consumers’ counsel slammed the company’s objections.

    “In an unfortunate display of corporate arrogance, the FirstEnergy Utilities are opposing an investigation by their state regulator, the PUCO, into utility consumer protection issues surrounding what has been described by a prosecutor as ‘likely the largest bribery scheme ever perpetrated against the state of Ohio,’” it said. “The PUCO has the authority under Ohio law to investigate the FirstEnergy Utilities and their owner, FirstEnergy Corp. FirstEnergy should get out of the PUCO’s way and cooperate.”

  • Unfinished business: 5 legislative priorities in Ohio pushed to 2021

    Unfinished business: 5 legislative priorities in Ohio pushed to 2021

    By Tyler Buchanan and Ohio Capital Journal

    Columbus, Ohio – The 133rd Ohio General Assembly wrapped up its term with a flurry of lame-duck activity last week, closing out a challenging year of legislating amid a global pandemic. 

    Lawmakers hurried to get priority bills passed and sent to Gov. Mike DeWine’s desk for a signature before the two-year term ended. There were, however, a number of major legislative projects that did not get passed.

    Here are some of the priorities falling to the 134th General Assembly, which starts in January:

    What to do with House Bill 6?

    After months of deliberation about House Bill 6, lawmakers have decided to punt any repeal or replacement effort to 2021.

    HB 6 is the $1.3 billion nuclear bailout bill at the center of what has been called the largest corruption scheme in state history. 

    In the days after Speaker Larry Householder and four other political operatives were arrested in July, one thing was clear: Ohio lawmakers needed to do something about the tainted bill. 

    DeWine, who signed the bill into law in 2019, called for its repeal. Householder was removed as House Speaker. His replacement, Rep. Robert Cupp, R-Lima, said one of the first priorities of his speakership would be addressing HB 6. 

    Davis Bees Nuclear Power Station with electricity pylons, Ohio. Getty images.

    Cupp did create a new “House Select Committee on Energy Policy and Oversight,” which met nine times between September and December to hear testimony on various attempts to repeal HB 6.

    Members could not come to an agreement on how to best approach HB 6; some wanted a full repeal, others wanted only certain portions replaced and a few defended the whole bill as being good public policy, even if it did come about through sordid means. 

    Two of those involved have already pleaded guilty in federal court; the cases against Householder and two others are ongoing.

    Householder was reelected to another term and it remains to be seen if the chamber will take a vote in 2021 to expel him. When Cupp was elected as speaker in July, he indicated such a vote would wait until after the new term starts.

    School spending reform will take more time

    The Ohio Supreme Court ruled the state’s school funding model was unconstitutional back in 1997. Decades later, lawmakers are still working to figure out a constitutional and equitable substitute.

    A bipartisan funding overhaul passed the House in early December, but did not make it through the Senate. 

    Sen. Matt Dolan, R-Chagrin Falls, who chairs the Senate Finance Committee, wrote in a December letter “there is not enough time in the legislative session for the Senate to have the in-depth hearings this bill deserves.” Dolan suggested the new formula could be passed as a piece of the next state budget, which will be decided in the first half of 2021.

    Republicans still concerned about pandemic authority

    For all the condemnation leveled against Ohio’s pandemic response by Republican lawmakers in 2020, the legislature achieved little this year in the way of curbing the government’s executive powers.

    Between May and December, Republicans introduced numerous bills targeting the pandemic authority of the governor and the Ohio Department of Health (ODH). Only a few of them passed, and DeWine followed through on a pledge to veto any bill restricting ODH’s ability to issue health orders meant to stem the spread of COVID-19.

    DeWine vetoed a bill over the summer which would have reduced the penalties for violating a public health order. Lawmakers did not seek a veto override. 

    Gov. Mike DeWine is pictured during his statewide address on Wednesday, Nov. 11. Photo courtesy Ohio Channel.

    More recently, DeWine vetoed a bill to prevent ODH from issuing widespread quarantine orders (it also would’ve given lawmakers authority to vote down any public health orders). Despite protests and pressure from conservative lawmakers to override the veto, such a vote was not taken during the lame-duck session.

    Late in the term, lawmakers debated efforts to make future health orders more fair to business owners, should they be necessary. At other points this year, legislators said they wanted to address the state’s pandemic authority for future crises beyond the coronavirus. Those efforts may come up again in 2021.

    Campaign finance and election reform

    These were two hotly-debated topics this year in large part because of the presidential election cycle and the House Bill 6 scandal.

    As the Ohio Capital Journal has reported, lawmakers proposed a wide array of improvements to the state’s election system over the past term — from automated voter registration to online absentee ballot requests. Some legislators expressed worry about approving reforms during an election year, which may provide an opportunity for reforms to be heard during an “off year” like 2021. 

    The HB6 scandal involved allegations of bribery money being funneled through “dark money” groups in order to influence Ohio elections and public policy. These groups are registered nonprofits which are not required to disclose who funds them. 

    Ohio Secretary of State Frank LaRose, whose office oversees campaign finance in the state, came out in favor of improved transparency when it comes to “dark money groups.” He supported legislative efforts which followed Householder’s arrests to require such groups to publicly disclose their financial activity. 

    Secretary of State Frank LaRose is flanked by state Reps. Gayle Manning and Jessica Miranda during a press conference in support of HB 737.

    A bipartisan bill proposing reforms to the state’s campaign finance system did not receive a hearing in 2020, but these efforts may carry over to the new term.

    Split opinions on criminal justice reform

    There was much attention paid to the legislature’s work to reform the Ohio criminal justice system, with plenty of disagreements leading to mixed results.

    Lawmakers passed Senate Bill 1, which expands access to drug treatment programs in lieu of convictions and broadens the description for criminal records that may be sealed. 

    A separate bill to reclassify low-level drug offenses from felonies to misdemeanors passed the Senate last June, but was not taken up for a vote during the House’s lame-duck session. The bill sought to divert drug offenders into treatment rather than criminal punishment.

    Despite bipartisan support in the Statehouse and among civil rights groups, the bill remained controversial among law enforcement groups and prosecutors. The Ohio State Bar Association came out against the bill, arguing in testimony that some drug offenders “must have serious consequences hanging over their heads like the threat of a felony and prison time” in order to commit to a treatment program. 

    Rep. Bill Seitz, R-Green Twp., a supporter of the bill who will serve as Majority Floor Leader next term, told The Cincinnati Enquirer that work will continue in 2021 on criminal justice reform.

  • What can be done to reduce the influence of dark money on Ohio energy policy?

    What can be done to reduce the influence of dark money on Ohio energy policy?

    Any changes in the wake of the alleged $60 million Householder conspiracy will ultimately depend on voters, policy experts say.

    This article provided by Eye on Ohio, the nonprofit, nonpartisan Ohio Center for Journalism in partnership with the nonprofit Energy News Network. Please join their free mailing list or the mailing list for the Energy New Network as this helps us provide more public service reporting.

    The arrest of former Ohio House Speaker Larry Householder and others in July revealed how the use of dark money organizations enabled an alleged $60 million conspiracy to sway elections and provide costly bailouts to noncompetitive nuclear and coal plants.

    As federal and state court cases move forward, questions remain about what can be done to restore confidence in the legislature and to prevent similar situations in the future.

    “Dark money is really how special interests win right now,” said Jay Costa, executive director at Voters’ Right To Know. When corporations use shell groups to hide their political spending, they “gain a level of credibility they wouldn’t otherwise have,” he explained. “I like to think of it as the ‘Wizard of Oz’ effect.”

    In other words, voters don’t get to see who’s behind the curtain.

    Two months after the federal government’s criminal complaint and indictment in July, Ohio Attorney General David Yost has filed a state court lawsuit. The complaint alleges a “pattern of corrupt activity,” and seeks injunctive relief to prevent FirstEnergy, FirstEnergy Solutions, Energy Harbor and others from reaping benefits from the bailouts under House Bill 6. A hearing on a preliminary motion for that relief is currently scheduled for Friday, Oct. 2.

    Meanwhile, it’s unclear whether Ohio lawmakers will actually repeal House Bill 6, the bailout law passed as a result of the alleged conspiracy. Both Democratic and Republican lawmakers called for a swift repeal in late July and early August. However, leadership in the Ohio House has so far refused to allow a full House vote on any pending repeal bills.

    ‘Dragging their feet’

    Rep. David Leland, D-Columbus

    “They’re just dragging their feet,” said Rep. David Leland, D-Columbus. “We have 58 members of the legislature who are willing to repeal HB 6 right now.”

    Instead, Speaker Robert Cupp, R-Lima, has referred the bill to a House Select Committee on Energy Policy and Oversight. So far, those hearings have largely been a general review of the pros and cons of HB 6, rather than a focused oversight of the alleged corruption that led to its passage and whether it should be repealed in order to repair any claimed harm to public trust in the legislature’s integrity.

    “The only way that we can prove that Ohio is not for sale is by repealing HB 6,” Leland said. “The polling we’ve seen shows that people by an overwhelming margin are going to punish those people who have voted for HB 6 and have done nothing to repeal it.” Early and absentee voting in Ohio begins on Oct. 6.

    “Our legislators are supposed to act in the public interest,” said political scientist Leah Stokes at the University of California at Santa Barbara. Corporations’ interests may sometimes conflict. But, she adds, “it’s really politicians’ and regulators’ job not to be listening to those special interests. That basic responsibility of democracy has failed in Ohio with House Bill 6.”

    A straight repeal would mostly restore Ohio energy law to before HB 6 became effective, subject to some follow-up regulatory matters before the Public Utilities Commission of Ohio. A quick replacement could potentially reenact all or much of the law, which also gutted the state’s clean energy standards.

    Advocates say that rushing to ram through anything more than a simple repeal this year would either just repeat bad policy or create more problems, even aside the alleged conspiracy’s past influence on the current makeup of the Ohio House of Representatives. Even at that, a repeal bill would now need either an emergency clause or an injunction sought by the state attorney general in order to stop the nuclear subsidies slated to start in January. The committee adjourned on Sept. 30 and no additional meetings are currently scheduled.

    HB 6 “is so questionable at this moment. The vehicle itself and the way it was sold is all just a pack of lies,” said Rachael Belz, executive director of Ohio Citizen Action. “We need them to repeal it, and then we need to go from there.” And that second step will take time, she said.

    “It’s complicated and complex legislation and policy. And we have to get it right,” said Chris Neme, a principal and co-founder of Energy Futures Group. “Passing a bill in less than a couple of months like the way HB 6 was just leads us down the road of unintended consequences.”

    Shining a light on dark money

    The bigger question is how to prevent similar abuses in the future. Utilities and fossil fuel interests have given heavily to Ohio political campaigns since the state enacted a 1999 law calling for competition in electricity generation. And the level of giving went up dramatically once a competitive market actually began to develop in the state.

    Utilities’ political spending has continued during this election season. FirstEnergy spokesperson Jennifer Young said that its political action committee has since canceled campaign donations it had originally reported as going out in July shortly before Householder’s arrest.

    Campaign donations shown for August have in fact been sent out, Young said. FirstEnergy has denied any wrongdoing in connection with its political donations or the alleged Householder scandal.

    Meanwhile, a 2010 Supreme Court case, Citizens United, “really opened up the floodgates of fossil fuel and electric utility influence over politics,” Stokes said. Utilities’ political spending is “particularly pernicious,” in her view, because customers “have to buy from these companies” to get electricity delivered to their homes.

    At the same time, reporting requirements currently apply only to immediate spenders on political issues and campaigns. They don’t reach all the way up the chain to the original source of the money.

    “It’s basically this Russian nesting doll scenario, where you have one donor giving to another donor, giving to another donor, to get to the person who finally spends the money to influence the voters,” Costa explained.

    In the case of HB 6, money flowed into Generation Now from multiple sources, with a lion’s share allegedly originating with Company A — understood to be FirstEnergy — and its subsidiaries, according to the federal complaint.

    Some of the money in turn then went to a political action committee. Or, it went to other organizations that directly funded pro-HB 6 ads. One such ad claimed a debunked Chinese conspiracy was behind last year’s failed effort to put a referendum on the law on the ballot this fall. A for-profit group called Ohioans for Energy Security paid for that ad. When asked last year, lawyers at the firm that set up the corporation, Isaac Wiles, would not answer questions about the source of its funding.

    “The notion that dark money is something some people don’t like is not part of the elements of the crime,” Mark Weaver, an attorney at that firm, said at a Columbus Metropolitan Club forum after news broke about the Householder arrest.

    Asked if there was too much money sloshing around at the statehouse, he said it’s “a lot of money, no doubt,” but it “pales in comparison” to the amount that Americans spend on Halloween candy and costumes every year. And he said that the First Amendment protects the right to conduct political speech anonymously.

    “Of course, state and local governments may (depending on how they draft) pass additional 501(c)4 disclosure requirements that could meet constitutional scrutiny,” Weaver later added.

    Ian Vandewalker, Ian
    PHOTO CREDIT: Courtesy of Brennan Center for Justice

    “There is no absolute right to anonymous speech,” said attorney Ian Vandewalker at the Brennan Center for Justice at New York University School of Law. Elections are treated differently from general speech, because of the overriding interest in making sure elections function properly, he explained at a panel organized by the League of Women Voters of Ohio.

    “That requires informed voters. And it requires policies to not be able to cheat the public,” Vandewalker said. “And so those interests require that there be a level of transparency.”

    “No regulation, no law, no set of ethical rules substitutes for American voters paying attention to who’s running for office — pressing them hard on what they stand for, looking closely at the issues, and going into the ballot box having done your homework,” Weaver said.

    “The reason that information is important and transparency is important is so that voters are educated,” said Catherine Turcer, executive director of Common Cause Ohio. “You can’t make the argument that voters need to be better educated but you shouldn’t give them actual education. It doesn’t make any sense.”

    Moreover, disclosure needs to be timely, said Heather Taylor-Miesle, executive director for the Ohio Environmental Council. In the case of HB 6, Generation Now didn’t report its 2017 spending to the Internal Revenue Service until late 2019. By then, millions more had been spent to influence the 2018 elections, the passage of HB 6, and the failed referendum effort against it.

    Pending bills

    Several bills introduced by Democratic and Republican lawmakers could make a strong start toward improved disclosure, including HB 737, HB 739, and SB 347. Those bills should be broadened to include digital media, as well as more traditional campaign spending, Turcer said.

    The bills should also call for disclosure not only of the name of an organization, but the identity of the top three original donors of funding, Turcer added in her Sept. 16 testimony in support of SB 347. “Otherwise, wealthy special interests will attempt to avoid disclosure by creating pop-up shell groups,” she said.

    And while Ohio voters won’t know who’s behind all the groups funding attack ads or other political spending this election season, information is available about how lawmakers voted on HB 6. The Akron Beacon Journal has also compiled some information on how some funds were used in the 2018 Ohio House campaigns.

    “People should contact their legislators about HB 6” if they want to speak out about the issue, Stokes said, noting that the law passed with support from a mix of both Republicans and Democrats.

    “When the public is outraged about an issue and really shows up, these issues get reversed,” Stokes added. “There’s a lot of leverage right now.”

    [Note: the original version of this story took additional comments made by Mr. Weaver and summarized them to help the story flow better and to highlight the most relevant points. Mr. Weaver contacted Eye on Ohio and the Energy News Network after publication expressing his concern that the summary was not an accurate representation of his public comments. While we do not share that view, we are happy to share the full text from which that summary was taken. We know our readers are smart and can draw their own conclusions regarding their meaning. Beneath this article is that text, as well as a link to the entire video.]

    Partial Transcript of: “Statehouse Rocked by Corruption

    Columbus Metropolitan Club, August 5, 2020

    Mark Weaver: Blaming Citizens United for this I think is wrongheaded. The New York Times, it’s sort of been proven that their collusion story about Russia has fallen completely apart and yet I don’t blame the First Amendment for the right to print what they printed. I think they had a right to print all that. I think it was substantively wrong, but I wouldn’t go after their ability to print that stuff.

    And so what the Supreme Court said in Citizens United was, if a few of us get together and want to form a group to communicate, we ought to have a right to do that under the First Amendment.

    And a lot of donors are looking at what’s happening in America right now with the doxxing, or  the releasing of personal information and targeting people for shame. So that’s why some donors don’t want to give. Now some may have less noble notions for wanting to keep their money and their name private. But we saw what happened to Amy Acton for example where her personal home was targeted by protesters– that’s just wrong.

    The notion that- I disagree with you so I’m going to personally vilify you and show up at your house where your family or your children are- so many donors see that as part of 2020 current affairs and so many of them want to avoid that. And I know not everyone has that reason.

    Mike Thompson: But the problem comes in not just that somebody gives $500 to a candidate or a cause they believe in. It’s that somebody gives– $61 million or $35 million, let’s be conservative, and we don’t know that’s happening. Is there a middle ground where we can say, okay I can protect your identity, your First Amendment rights, but you can’t have THAT much influence?

    Weaver: Well, not Constitutionally, no. It’s not just Citizens United. There was a case out of Ohio called McIntyre vs. the Ohio Elections Commission. This is the 7-2 Supreme Court case that said it’s legal to keep yourself anonymous when spending politically, based out of Ohio, in Westerville, Mrs. McIntyre. I used to teach the case. This morning I looked at it again and I had forgotten about this quote. This is not a close call. 7-2. This is Supreme court on anonymous speech: “It’s not a pernicious, fraudulent practice but an honorable tradition of advocacy and of dissent.”

    And they pointed to the Federalist Papers that were written anonymously, to avoid scrutiny of the authors and focus on the ideas. So this notion of anonymous speech is one that’s protected by Supreme Court precedent.

    Thompson: Laura, there are efforts at the statehouse to make it more transparent. Is it just lip service or are they serious efforts?

    Laura Bischoff: You know it’s interesting. I do think the conditions are probably better now for reform than they were six months ago. So, there’s a couple of different bills pending. One is House Bill 737, which is sponsored by Gayle Manning, a Republican from North Royalton, and Jessica Miranda, a Democrat from Cleveland. And it’s got the support of the Ohio Secretary of State, Frank LaRose. And it would require, if you’re going to have a 501c(4) that’s spending in Ohio on political matters then it would require reporting through the state. Louis Brandeis said that the best disinfectant is sunshine. And so, this kind of works on that premise– transparency and disclosure will help clean it up.

    Thompson: Derrick, It comes down to the Supreme Court. And the courts have said money equals speech. How much money? We have unlimited amounts of Free Speech. We can stand on a street corner, 24 hours a day, 7 days a week, and as long as we don’t yell fire in a crowded theatre we can do all we want. Should that same apply to the amount of money someone can give to a campaign? Or to a political cause?

    Derrick Clay: Well you know if you have the money to give it, that’s your discretion whether you want to give that money to a c(4). You know, right now we’re under the law from that Citizens United case where people can give unlimited amounts of money to a c(4) nonprofit. So until that court case is overturned or challenged, then that’s the law of the land that we all have to abide by unfortunately.

    Thompson: Is it too much money sloshing around at the statehouse? And you guys [points at Weaver and Clay]  have both advocated for groups, and helped raise money and spent money that’s been raised. I mean, you’re part of the system-

    Weaver: It’s a lot of money, no doubt. But when you look at what America spends on Halloween candy and costumes every year it pales in comparison. There’s lots of money done for lots of things.

    Halloween candy and costumes don’t have the protection of the First Amendment. Remember, the Supreme Court has been very clear: the speech that aggravates us the most gets the most protection. And when you’re laying out what’s protected, political speech is the highest. And so whatever laws get passed, and I’m interested to read the details, and I’m interested in whatever laws are being put out there, they will have to withstand First Amendment scrutiny just like the news organizations represented today.

    This article first appeared on Eye on Ohio and is republished here under a Creative Commons license.

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

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

    cccc

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


    Marty Schladen

    Marty Schladen has been a reporter for decades, working in Indiana, Texas and other places before returning to his native Ohio to work at The Columbus Dispatch in 2017. He’s won state and national journalism awards for investigations into utility regulation, public corruption, the environment, prescription drug spending and other matters.
  • Common Cause: Strong campaign finance disclosure rules would have stopped Householder in his tracks

    Common Cause: Strong campaign finance disclosure rules would have stopped Householder in his tracks

    In reaction in Ohio’s Speaker of the House Larry Householder being arrested by the FBI as part of a $60 million pay-to-play scheme, Common Cause Ohio Executive Director Catherine Turcer released the following statement:

    “This pay-to-play scandal would have been stopped in its tracks if Ohioans were able to see who was behind efforts to influence their opinions and votes — if they could “follow the money.”  We shouldn’t need an FBI investigation to connect the dots. If we had strong campaign finance disclosure rules,  Larry Householder would not have been able to pervert our political system the way that he did.

    This scheme began with his quest for power — his election as Speaker of the Ohio House of Representatives — and revolves around the passage of the nuclear and coal bailout of a FirstEnergy subsidiary, House Bill 6.

    Householder allegedly took millions of dollars at the same time he pushed legislation to bail out non-competitive coal and nuclear plants with more than $1 billion in public money, gut subsidies for renewable energy, and roll back clean energy standards.

    Ohioans have a right to an accountable government and to know who is trying to influence lawmakers, their votes, and opinions. The federal investigation into Generation Now and today’s arrest of Speaker Householder are just the latest example of why the Ohio legislature needs to take immediate action to increase campaign finance disclosure. 

    It’s past time for the Ohio legislature to take action to increase transparency of political spending and stop allowing ‘dark money’ to distort the democratic process. The source of campaign funding information helps voters examine the motivation of ads they see on TV and the internet. Shining the light on ‘dark money’ will also encourage those funding these egregious ads to be more accountable.

    Common Cause and its members will work with Republican and Democratic allies to find a path for strong money in politics transparency reform. Ohio voters deserve nothing less.”

    xxxxx

    Common Cause Ohio is a non-profit, non-partisan advocacy organization that works to strengthen public participation in our democracy and ensure that public officials and public institutions are accountable and responsive to citizens. Through a powerful combination of coalition building, lobbying and litigation, grassroots organizing, policy development, research and public education, we spotlight local, state and national issues that affect every Ohioan.