LOVELAND MAGAZINE

News and Events from the Loveland, Ohio Area

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Since 2004

Tag: public corruption scandal

  • Ohio’s new U.S. Senator Jon Husted has a history of connections to energy and charter scandals

    Ohio’s new U.S. Senator Jon Husted has a history of connections to energy and charter scandals

    Ohio’s next U.S. Senator, Jon Husted. (Photo by Graham Stokes for the Ohio Capital Journal. Republish photo only with original story.)

    Commentary

    The same day Jon Husted was tapped to be Ohio’s next U.S. Senator, former FirstEnergy executives were indicted on federal racketeering charges

    Marilou Johanek
    Marilou Johanek is a veteran Ohio print and broadcast journalist who has covered state and national politics as a longtime newspaper editorial writer and columnist.

    “No comment.” That’s all Ohio Gov. Mike DeWine said and walked away. Only at the tail end of DeWine’s press conference last Friday, to announce Lt. Gov. Jon Husted as his pick to replace J.D. Vance in the U.S. Senate, was the elephant in the room even acknowledged. What was the governor’s response to the federal indictments handed down (the same day) against two former FirstEnergy executives tied to the biggest public corruption scandal in state history?

    DeWine’s response was no response. His briefing was about Husted’s promotion not the stain of malfeasance on their watch that the federal indictments underscored. Both men revert to a predictable default setting when it comes to questions about their knowledge of or involvement in the FirstEnergy scheme to bribe lawmakers into giving it a massive state subsidy. Deny. Deflect. Dismiss. No comment.

    The pair insists, despite mounting evidence to the contrary, that they knew nothing about anything corrupt in the legislation written by and for FirstEnergy that they were instrumental in passing and signing into law. DeWine and his LG maintain they conducted themselves properly and did right by Ohio with energy policy that just happened to include an extravagant gift from the state to a utility that donated richly to their campaigns.

    They either outright refute the logged meetings, phone calls, emails and text messages shared with FirstEnergy brass before, during, and after the company’s billion-dollar nuclear plant bailout was enacted — or feign amnesia about their chumminess with generous GOP donors even as FirstEnergy’s devious pay-to-play arrangement was underway to enrich investors and hose ratepayers.

    But as court documents indicate — in the state and federal trials of defendants who got caught up in the nuclear bailout scam — DeWine, and especially Husted, had their fingerprints all over the dodgy FirstEnergy legislation while it was being created and passed through the legislature to benefit the utility and Republican sugar daddy. Like many Ohio Republicans, DeWine and Husted had lengthy relationships and intricate business dealings over the years with the head honchos at FirstEnergy.

    Their coziness with ex-FirstEnergy CEO Chuck Jones and Senior VP Mike Dowling appeared to reach its peak in 2019 with passage of House Bill 6 to prop up the utility’s two aging and uncompetitive nuclear power plants in Ohio. So when federal prosecutors announced that Jones and Dowling — at the center of a $60 million bribery plot to buy off state officials for a $1.2 billion bailout — had been slapped with federal racketeering charges, the top state officials who made that bailout happen must have squirmed.

    Their political patrons, already facing related charges on the state level, could well implicate the guv and his Senate-appointee in the developing federal cases. No wonder Husted is hightailing it out of Ohio before the boom lowers. But the senator-to-be, who has managed to skate around his deep entanglements in some of the state’s biggest scandals, (e.g., the notorious ECOT online charter school he championed without accountability that ripped-off a ton of taxpayer money for phantom students) may not be able to slide so deftly around his role as a pivotal player in the FirstEnergy scandal.

    Publicly released court records suggest Husted, in close contact with FirstEnergy execs, was leading the behind-the-scenes efforts to push the tainted HB6 through the legislature and onto the governor desk ASAP. Detailed evidence contains a slew of FirstEnergy texts referencing “State Official 2,” confirmed as Husted, that show how involved the LG was in not only lobbying for arguably the most corrupt piece of state energy legislation ever, but for making the nuclear bailout bill even beefier by extending the FirstEnergy payouts in the legislation a few extra years.

    Although Husted had to trim his sails on that front, FirstEnergy leaders chortled in text messages that the LG was in their corner “fighting to the end” to give the company everything it wanted and more. Who cared if Ohio ratepayers were on the hook for hundreds of millions in new monthly surcharges on their electricity bills? Husted wasn’t working for them. He was helping FirstEnergy boost its profit margin in an unprecedented bribery and money laundering fraud perpetrated on everyday Ohioans.

    Of course, Husted defaults to denial about any knowledge of the corruptness that permeated FirstEnergy’s bid for bloated state subsidies from the very beginning. It’s a dance he and DeWine do whenever pervasive state scandal threatens to puncture the governor’s folksy persona or the LG’s image as the telegenic GOP Golden Boy who checks off every box that matters to deep-pocketed powerbrokers lining up to make a killing on custom-made government policy.

    As Husted heads to Washington he takes a political skills set honed in shameless service to: an unscrupulous utility that tried to buy a gravy train ticket from the state with secretly-funded legislation, to a crooked for-profit charter that bilked taxpayers out of hundreds of millions of dollars, to a billion-dollar voucher boondoggle funding private religious schools in a scandal waiting to explode, to the fossil fuel industry’s anti-wind and anti-solar propaganda machine after publicly supporting renewable energy.

    Husted will fit right in with the Republican Senate majority carrying water for the highest bidder waving a campaign check, capitulating to the tyrant trashing the Constitution with impunity, and brushing aside telling stains of gathering malfeasance with “no comment.”

     

  • Utility regulators block watchdog’s requests for info about a buried audit of a $460 million fund

    Utility regulators block watchdog’s requests for info about a buried audit of a $460 million fund

    Photo by Getty Images.

    BY: JAKE ZUCKERMAN – Ohio Capital Journal

    An administrative judge blocked a watchdog’s attempt to obtain an audit that the Ohio utility regulatory agency’s former chairman, who has been accused of taking a $4.3 million bribe, allegedly tried to squash before publication.

    The ruling, released Friday evening, is a setback for the Ohio Consumers’ Counsel, a state funded agency representing residential ratepayers in utility cases. The OCC has pushed for investigations of FirstEnergy, especially since the company admitted to playing a central role in a massive public corruption scandal.

    The OCC asked the Public Utilities Commission of Ohio to grant it a subpoena to obtain a copy of any draft audit into a $458 million charge from FirstEnergy that started in 2017 collected called the “Distribution Modernization Rider.” The OCC also sought to depose an auditor who worked on report.

    The Ohio Supreme Court blocked FirstEnergy from continuing to charge customers for the DMR, two years after it was first applied on monthly bills. The court said the PUCO unlawfully failed to ensure the money is actually spent on modernizing the grid. A subsequent PUCO investigation was inconclusive as to whether the DMR monies were used to fund the bribery operations.

    The Supreme Court’s order questioned the value of leaving intact the audit when it overturned the rider, finding the reviews fail to properly protect ratepayers from the “possible misuse of DMR funds.” Additionally, the justices reasoned that any findings of misuse of the funds would be moot given the court had already blocked the charge and a state law blocked the court from ordering refunds unless PUCO explicitly allows for them, which it did not. The PUCO later nixed the audit, citing the court’s thinking.

    The OCC has previously obtained a text message from FirstEnergy’s CEO referencing former PUCO Chairman Sam Randazzo “burning the DMR final report.”

    The text partially came to light when FirstEnergy entered into a deferred prosecution agreement with the U.S. Department of Justice to possibly avert a charge of wire fraud. The company agreed to pay a $230 million penalty. It also admitted to paying Randazzo $22 million over nine years, including $4.3 million just before he started as PUCO chairman. The company also admitted to a separate $60 million bribery scheme ran through the state Legislature to pass House Bill 6 in 2019.

    Randazzo has not been charged with a crime and has maintained his innocence. The PUCO has received two subpoenas in connection with the investigation.

    PUCO Attorney Examiner Gregory Price denied both the OCC’s requests. He said the facts are clear that no such draft report exists in any form. Additionally, the question of FirstEnergy’s political spending is being “thoroughly addressed” in other PUCO cases.

    Price ruled OCC’s reliance on the Randazzo text shows its “obvious interest in investigating potential wrongdoing” as opposed to matters it “actually has jurisdiction over.”

    In December 2020, about two months after federal agents raided Randazzo’s home, the PUCO opted to resume the audit into the DMR. However, this time it hired Daymark Energy Advisors. That audit, released earlier this year, was inconclusive as to whether the DMR funds were used to fund the HB 6 campaign. FirstEnergy, the auditors said, pooled funds from all its 11 utilities in one pot, creating an “inability” for the auditors to track the funds.

    Price, however, said the final report “appears to fully address whether [FirstEnergy] properly expended the DMR funds.”

    In records the PUCO provided to federal prosecutors, Price is copied onto email threads regarding policy meetings before and after the passage of House Bill 6. As was first reported by Cleveland.com, one email shows Price was invited to one such meeting days before the House passed the bill.

    Other investigations into FirstEnergy, Randazzo and other alleged conspirators continue. Former House Speaker Larry Householder is expected to stand trial on a racketeering charge in connection with the scandal this fall. He recently asked a court to dismiss the charge against him. That motion has not yet received a ruling.

    Meanwhile, FirstEnergy shareholders have filed a class action lawsuit against the company as well.