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Tag: Sam Randazzo

  • 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

  • Ohio AG Yost is prosecuting others in utility scandal, but he won’t discuss his own involvement

    Ohio AG Yost is prosecuting others in utility scandal, but he won’t discuss his own involvement

    Ohio Attorney General Dave Yost. (Photo by Morgan Trau, WEWS.)

    BY:  – Ohio Capital Journal

    Ohio Attorney General Dave Yost this year brought criminal charges against four figures who were involved in the biggest bribery scandal in state history.

    Many thought they were long overdue. That’s especially true of cases filed against men accused of funding the conspiracy, but who still hadn’t been charged by federal prosecutors four years after the last of the alleged wrongdoing took place — and almost a year after two others began lengthy prison sentences.

    But Yost’s own name came up several times in the federal trial and his office last week again ignored detailed questions about the matter.

    The attorney general played an important role in the defeat of an attempted repeal of the corrupt bailout. And there were claims that he believed that the bailout was a bad law, but kept his mouth shut out of loyalty to one of the conspirators — and to the law’s major beneficiary.

    The issue is politically fraught for Yost because the state charges he filed this year have raised new questions about Lt. Gov. Jon Husted’s involvement in the scandal. Yost and Husted are widely expected to face each other in the 2026 race to be Ohio’s Republican nominee for governor.

    New charges

    Former House Speaker Larry Householder, R-Glenford, was sentenced to 20 years in federal prison last June for his role in a scheme in which Akron-based FirstEnergy paid more than $60 million to make him speaker in 2018 and to pass and protect a $1.3 billion ratepayer bailout the following year. It’s one of the biggest scandals in Ohio history, and so far it has also sent former GOP Chairman Matt Borges to prison for five years, resulted in two more guilty pleas — and seen two defendants die by suicide.

    But U.S. Attorney Kenneth Parker sidestepped a pretty important question last June when he stood in front of the federal courthouse in Cincinnati and boasted to the press about the convictions and sentences his assistants had just won. He was asked, what about the people who paid the bribes? Would they be charged? If so, when?

    All Parker would say was that the investigation was ongoing.

    In December, his team indicted Sam Randazzo, Gov. Mike DeWine’s nominee to be Ohio’s top utility regulator. In a deferred prosecution agreement, FirstEnergy said it paid Randazzo a $4.3 million bribe just before he became regulator. From that post, he did a number of lucrative favors for the company related to the bailout and he improperly helped with other matters as well, according to the indictment.

    But still uncharged by the feds are former FirstEnergy CEO Chuck Jones and Vice President Michael Dowling, the executives alleged to have directed truckloads of company money into 501(c)(4) dark money groups that financed the scandal.

    In February, a team of state prosecutors led by Yost stepped into the void by securing a grand jury indictment against Jones, Dowling and Randazzo. The charges relate to the bailout scandal, and also to a decade’s worth of shady dealings that allegedly paid Randazzo more than $10 million and ripped off industrial energy users and residential customers alike.

    In April, Randazzo died by suicide.

    Other questions

    The state indictment also raised new questions about the cozy relationships between the DeWine/Husted administration, FirstEnergy and Randazzo.

    Weeks before they were inaugurated, DeWine and Husted had dinner in downtown Columbus with Jones and Dowling — FirstEnergy’s top leadership — and discussed whether Randazzo would be acceptable to regulate the company. Jones and Dowling then drove about a mile to Randazzo’s German Village residence and negotiated the $4.3 million payoff, according to text messages that are being used in multiple court proceedings.

    The state indictment alleges that DeWine’s chief of staff, Laurel Dawson, knew about the payoff before the governor appointed Randazzo to chair the Public Utilities Commission of Ohio. But Dawson — whose husband was a FirstEnergy lobbyist who allegedly received a $10,000 loan from Randazzo — isn’t talking publicly about what she knew or what she told her boss.

    DeWine also continues to stand behind his former governmental affairs director, Dan McCarthy, who lobbied the legislature on DeWine’s behalf to pass the bailout law.

    Just before taking that job, McCarthy, too, was a FirstEnergy lobbyist — a job in which he set up a dark-money group that became a conduit for tens of millions in funding for the scandal. In last year’s trial, the prosecution presented evidence that FirstEnergy VP Dowling in 2019 ordered a subordinate to keep the then-DeWine aide’s name off of a $10 million infusion into the corrupt bailout even after being told that it would violate IRS rules to do so.

    DeWine and his staff haven’t explained what McCarthy and Dawson knew about the corrupt machinations as the bailout law was in the works — or when DeWine signed it mere hours after its passage.

    DeWine, Husted and their administration also haven’t explained what they knew about the long, shady relationship between Randazzo and FirstEnergy described in the state indictment. The governor’s spokesman has tried to suggest that it was common knowledge, but extensive evidence shows that Randazzo and FirstEnergy went to great lengths to conceal it.

    DeWine also has said he didn’t know about millions in dark money contributions FirstEnergy made in 2018 to support his gubernatorial bid. But a University of Cincinnati political scientist said it’s simply not believable that a company would make that kind of an expenditure and not make sure the beneficiary knew about it. That seems especially true for a company that subsequently admitted that it paid millions more in outright bribes.

    For his part, Husted won’t comment on the $1 million in dark money FirstEnergy spent supporting his 2018 bid for governor, or whether he  promoted Randazzo for the regulatory job when he dropped his bid and joined DeWine’s ticket.

    The two had history. As House speaker in 2007, Husted appointed Randazzo to the PUCO Nominating Council — a position he held until DeWine nominated him to chair the agency.

    Questions for the Attorney General

    Husted and Yost, the attorney general, are widely regarded as the frontrunners for the 2026 GOP gubernatorial nomination in a state that hasn’t elected a Democrat to that job since 2006.

    There hasn’t been any suggestion that Yost brought charges in the bailout scandal as a way of embarrassing his likely opponent. But at the same time, Yost’s office has avoided questions about his own involvement in the bailout controversy.

    According to text messages presented at last year’s federal court trial, Yost was drawn into the fight at a critical time. The bailout passed the Householder-run House at the end of May 2019, but a month later, opposition was growing in the state Senate.

    Borges, the former GOP chair who had run some of Yost’s political campaigns, had a June 26, 2019 text conversation with Juan Cespedes, who was also being paid to push the corrupt bailout law. Borges intimated that Yost believed that the law was a bad one.

    The AG “‘would be out front (in opposition) if not for (FirstEnergy) support and your involvement,’” Borges quoted Yost as saying.

    A spokesperson for Yost declined to comment at the time, citing the fact that he’d been subpoenaed in the case.

    Regardless of the AG’s view, so many people agreed that the bailout was a horrible law that an effort to undertake the cumbersome repeal process was getting underway even before it passed. Borges noted to Cespedes that Yost would have to give his approval before a repeal could get on the ballot. The AG would try to help them there, too, Borges said.

    “If there’s any way the law will allow him to reject the language, he will do it,” Borges texted.

    Regardless of why, Yost ended up doing just that.

    Crucial lost time

    DeWine signed the bailout, House Bill 6, the day the Senate passed it — July 23, 2019. Six days later, repeal advocates had gathered 1,000 signatures from registered voters and submitted a summary of the repeal to Yost for his approval.

    Time was of the essence because under Ohio law, repeal advocates had to gather another 265,000 voters’ signatures within 90 days of the law’s passage to get it on the ballot. But first they had to wait for Yost to approve the ballot summary.

    The attorney general waited the full 10 days allotted him and then issued a rejection letter that seems at odds with any concept of “summary.”

    It was a six-page, 1,535-word document that picked apart the summary in excruciating detail.

    “He listed a lot of different things,” said Rachael Belz, CEO of Ohio Citizen Action, which was strongly opposed to the bailout. “It seemed like a lot to overcome. It didn’t seem very neutral.”

    The repeal was a referendum — the only one for which Yost has considered summary language since he’s been attorney general. Of the 26 other summaries he’s rejected, the vast majority were for proposed constitutional amendments and the rest were for initiated statutes.

    His rejection of the summary for the bailout repeal stands out for its length. It’s more than twice as long as his other rejections are on average, according to information available on the attorney general’s website.

    In the event, Yost’s initial rejection did heavy damage to the repeal effort.

    Proponents on Aug. 16, 2019 submitted a new summary, which Yost certified on Aug. 29, 2019. But by that time, the repeal team had only 54 days left of the original 90 to gather and submit more than a quarter-million valid signatures. Their time to complete the gargantuan task was cut almost in half, in other words.

    What followed was a lying, xenophobic and sometimes-violent campaign to defeat the repeal into which FirstEnergy plowed $36 million in dark money. Perhaps unsurprisingly, the repeal couldn’t get enough signatures and parts of the corrupt bailout law are still on the books.

    Yost’s office didn’t respond to questions about his role in the repeal — or Borge’s statements that were presented at the former political boss’s criminal trial. But for Belz of Citizen Action, there’s plenty of blame to spread among Ohio’s statewide leaders.

    “I don’t think Yost’s hands are clean,” she said. “I don’t think Husted’s hands are clean. I don’t think DeWine’s hands are clean. I don’t know whose hands are clean. Frankly, that’d be a shorter list.”

    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

  • DeWine says Randazzo’s ties to First Energy were well known, but the evidence of this is lacking

    DeWine says Randazzo’s ties to First Energy were well known, but the evidence of this is lacking

    BY:  – Ohio Capital Journal

    The office of Gov. Mike DeWine has for months been saying that connections between the guy he picked to be the state’s top regulator and a utility at the center of an epic bribery scandal were well known around Capitol Square when DeWine nominated him in January 2019.

    If the relationship were common knowledge, it might seem more innocent that some in DeWine’s administration knew the utility had paid the regulator $4.3 million just before the governor nominated him. However, the administration has provided scant evidence that the claim is true — and there’s considerable evidence suggesting it isn’t.

    The regulator, Sam Randazzo, died by suicide earlier this month and the utility, Akron-based FirstEnergy, has admitted to its role in a scandal that has sent one public official to prison for 20 years and seen yet another defendant die by suicide.

    Meanwhile, DeWine’s lieutenant governor, Jon Husted, won’t talk about a $1 million FirstEnergy contribution to a group supporting him. And DeWine himself hasn’t explained what senior people in his administration with FirstEnergy connections knew about the scheme — in which $61 million in bribes were paid for a $1.3 billion ratepayer bailout.

    Multiple ties

    Among them is Laurel Dawson, who was chief of staff of the incoming DeWine administration at the beginning of 2019. At the same time, her husband, Mike Dawson, was a lobbyist for FirstEnergy.

    A few weeks before, on Dec. 18, 2018, Gov.-elect DeWine and Lt. Gov.-elect Jon Husted had dinner at the Columbus Athletic Club with FirstEnergy CEO Chuck Jones and Vice President Micheal Dowling. At the dinner, they discussed whether Randazzo would be acceptable to head up the Public Utilities Commission of Ohio — the agency that was supposed to regulate the executives’ utility, according to a state indictment of Randazzo, Jones, and Dowling that was filed in February.

    After the dinner, the FirstEnergy executives drove about a mile to Randazzo’s condo and negotiated a $4.3 million payment to Randazzo, the indictment said. FirstEnergy later said the payment was a bribe in a deferred prosecution agreement with the U.S. Justice Department.

    As PUCO chairman, Randazzo helped draft and lobby for the bailout law and did several other lucrative favors for FirstEnergy. His indictment said it capped off a decade-long relationship in which he was a paid “consultant” for FirstEnergy unbeknownst to his law firm or a group of industrial energy users on whose behalf Randazzo was supposed to be negotiating concessions.

    The indictment says at least one person in the DeWine administration — Laurel Dawson — knew that Randazzo had gotten a huge payment from FirstEnergy in the weeks before DeWine nominated him to chair the PUCO at the beginning of February 2019.

    Randazzo told “the Governor-elect through his incoming Chief of Staff that he had received $4.3 million from FirstEnergy, which he claimed was final payment of a ‘consulting agreement,’” Randazzo’s indictment said.

    For her part, Laurel Dawson is cooperating with the state prosecution, but she isn’t commenting publicly.

    Common knowledge?

    In the months since the state indictment of Randazzo and the FirstEnergy executives, DeWine Press Secretary Dan Tierney has been saying that Randazzo’s ties to FirstEnergy weren’t news even at the time the governor was considering him in early 2019 to head the PUCO.

    In February, he told Cleveland’s News Channel 5, “it was well known that Randazzo was a paid consultant for FirstEnergy.”

    Tierney modified that somewhat, telling the Capital Journal earlier this month, “it was well known to our staff that Mr. Randazzo was an energy consultant, and it was well-known to them and many people that Mr. Randazzo was a consultant employed by First Energy.”

    However, it appears that Randazzo and FirstEnergy’s top leadership went to great lengths to keep their relationship secret.

    Many of the counts Randazzo was charged with have to do with his failure to report income from FirstEnergy on state ethics disclosures while he was PUCO chairman. A bill of particulars accompanying the indictment adds that Randazzo didn’t disclose a 2015 consulting agreement with FirstEnergy to the members of his own law firm, McNees, Wallace and Nurick. Randazzo’s membership agreement in the firm barred barred him from outside employment, the filing said.

    Pressed on the matter this week, Tierney said in an email, “Mr. Randazzo testified numerous times at the General Assembly prior to his appointment to the PUCO. In addition, Mr. Randazzo served on the PUCO Nominating Council, which requires ethics disclosures. These were among the reasons Mr. Randazzo’s relationships with utilities and FirstEnergy were well known at the Statehouse and on Capitol Square.”

    The Capital Journal obtained Randazzo’s disclosures from the Ohio Ethics Commission for the period he served on the PUCO Nominating Council — 2007 to 2017. “FirstEnergy” doesn’t appear on any of them.

    Tierney was informed of that and asked whether DeWine’s office could point to any testimony Randazzo gave to the General Assembly in which he divulged his long, profitable relationship with FirstEnergy. Tierney didn’t answer that question, saying instead, “My understanding is that Mr. Randazzo’s business entities are listed on the ethics form(s), and those business entities not only were well known to be associated with Mr. Randazzo on Capitol Square, but also well known to have First Energy as clients.”

    Shell game

    The entity that appears on Randazzo’s ethics disclosures is the Sustainability Funding Alliance of Ohio — a group prosecutors accused Randazzo of using as a shell corporation to skim millions in FirstEnergy money earmarked for his industrial clients. The group’s relationship with FirstEnergy was so secret that the corporation’s top executives feared that a partial disclosure would tank Randazzo’s nomination to the PUCO.

    FirstEnergy Solutions — a subsidiary Jones and Dowling desperately wanted ratepayers to bail out — was going through bankruptcy. One of its filings mentioned the Sustainability Funding Alliance, which Randazzo had also listed on his ethics disclosures.

    The FirstEnergy executives were in a panic about it and their communications show that the connection between their company and Randazzo’s entity was far from well known.

    The DeWine administration is “going to be mad at Sam (and hopefully not us) for not disclosing the financial relationship,” Dowling texted Jones on Jan. 30, 2019, less than a week before DeWine nominated Randazzo. “That’s Sam’s responsibility.”

    When the nomination went through anyway, Dowling told Jones, “A bullet grazed temple,” to which the FirstEnergy CEO replied, “Forced DeWine/Husted to perform battlefield triage.”

    “Secret for-profit entity”

    In his email Monday, Tierney also said, “What media has described as the ‘dossier’ regarding Randazzo’s relationship with First Energy, which is a collection of public domain documents from the time in 2019, shows that much of this was colloquially known on Capitol Square and within the energy advocacy community.”

    The “dossier” Tierney referred to was a 198-page document from a former aide warning DeWine about Randazzo’s murky relationships. It was delivered to Laurel Dawson on Jan. 28, 2019 — about a week before her boss nominated Randazzo.

    Tierney said the document shows that Randazzo’s ties to FirstEnergy were well known. But the first page of the dossier says something quite different.

    “Publicly available documents suggest that PUCO applicant Sam Randazzo has opaque, undisclosed financial ties to FirstEnergy that should be fully examined and made public,” it says. “The enclosed evidence demonstrates that Randazzo personally profits from a secret for-profit entity funded by FirstEnergy Solutions.”

    Catherine Turcer, executive director of Common Cause Ohio, said that it’s past time for DeWine, Husted and their staffs to be much more forthcoming about their involvement in the bailout and about what DeWine and Husted did to investigate whether any member of the administration acted improperly.

    “It makes sense to be as clear as possible about what actually happened,” she said. “And I don’t just want to hear from the governor. I want to hear from the lieutenant governor.”

    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 Lt. Gov. Husted won’t say if he knew about $1M dark-money contribution

    Ohio Lt. Gov. Husted won’t say if he knew about $1M dark-money contribution

    Donation came from utility behind massive bribery scandal

    BY:  – Ohio Capital Journal

    Ohio Lt. Gov. Jon Husted is refusing to say whether he was aware of a $1 million contribution in 2017 to a political group that was supporting his bid for governor. Instead, his office is only reiterating that the group wasn’t affiliated with the Husted campaign.

    The massive donation came from Akron-based FirstEnergy, which over the next two years ponied up more than $60 million in bribes in exchange for a $1.3 billion ratepayer bailout — a law that Gov. Mike DeWine signed just hours after it passed.

    The donation was discovered among a trove of documents that a group of news organizations including the Capital Journal requested from the Office of Ohio Consumers’ Counsel.

    As reported last week by the Energy News Network and Floodlight, the documents also contained emails indicating that Husted was lobbying DeWine to support the bailout. The lobbying came just 11 days after Husted abandoned his gubernatorial bid and joined DeWine’s ticket on Dec. 1, 2017.

    “Jon Husted called me to say he was meeting with DeWine on our issue to try and get him aligned to help keep the plants open,” a Dec. 12, 2017 email by FirstEnergy lobbyist Joel Bailey said.

    The plants were money-losing nuclear and coal plants that FirstEnergy wanted to prop up with the bailout and then spin off.

    FirstEnergy in 2021 signed a deferred prosecution agreement in which it admitted to paying bribes to elect a friendly Republican majority to the state House, which would elect a friendly speaker who would pass and protect the corrupt bailout.

    The company also admitted to paying a $4.3 million bribe to Sam Randazzo, DeWine’s pick to chair the Public Utilities Commission of Ohio, who died by suicide last week. A state indictment said that FirstEnergy executives arranged the bribe with Randazzo the same night they discussed his suitability as a regulator at a dinner meeting with Gov.-elect DeWine and Lt. Gov.-elect Husted on Dec. 18, 2018.

    The ensuing scandal has landed former House Speaker Larry Householder, R-Glenford, in federal prison for 20 years, and former Ohio GOP Chair Matt Borges for five. Two others have pleaded guilty and await sentencing. Another defendant, lobbyist Neil Clark, also died by suicide — clad in a “DeWine for Governor” T-shirt.

    DeWine and Husted haven’t been charged in case, and they adamantly deny wrongdoing.

    However, they haven’t publicly discussed just what they knew about Randazzo’s long-standing relationship with FirstEnergy, or what they knew about the torrent of dark money flooding from FirstEnergy into Capitol Square to pass and protect the bailout. They also haven’t discussed what senior administration officials with close ties to FirstEnergy might have known.

    Among the documents turned over once FirstEnergy made its agreement with federal prosecutors was a spreadsheet listing 501(c)(4) political contributions the company made in 2017.

    Such donations are called “dark money” because recipients don’t have to disclose their sources. By law, dark-money contributions can’t go directly to candidates, but they can go to groups that support them, but aren’t supposed to directly coordinate with them.

    The FirstEnergy spreadsheet is only now becoming public because the FBI investigated the scandal and the U.S. Department of Justice brought a prosecution. During the battle over the bailout law in 2019, there were suspicions that FirstEnergy was bankrolling the effort, but the press and public couldn’t know because the money was being funneled through dark-money groups — without which U.S. Attorney David DeVillers said the conspiracy would have been impossible.

    Now that FirstEnergy’s 2017 donation to a Husted-aligned group is known, it raises new questions.

    Special interests sometimes piously claim that they spend millions on politics solely in the interests of “good government.” But as was shown in Householder’s lengthy trial last year, corporate political donations are often — if not usually — intended to buy influence with people in government.

    In order for that to happen, a government official would have to know that a special interest had contributed on his or her behalf. But Husted — who is eyeing a 2026 gubernatorial run — won’t say whether he knew that FirstEnergy in 2017 gave a million bucks to a group supporting his earlier bid.

    His spokeswoman, Hayley Carducci, was asked if Husted knew of the contribution and if he did, when he learned of it. She was also asked if Husted persuaded DeWine to support the FirstEnergy bailout; what Husted knew about Randazzo’s links to FirstEnergy when he was picked to regulate the company; and whether he knew that FirstEnergy was flooding Cap Square with dark money in its effort to pass and preserve the bailout.

    In an email, Carducci repeated her earlier statement: “The Husted campaign never received this donation and is not affiliated with any of these groups.”

    She added, “As for your other questions, we will not be commenting.”

    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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  • Indicted former Ohio utility chair Sam Randazzo reported dead by suicide

    Indicted former Ohio utility chair Sam Randazzo reported dead by suicide

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

    BY:  – Ohio Capital Journal

    Sam Randazzo, Gov. Mike DeWine’s first pick to chair the Public Utilities Commission of Ohio, has died by suicide, the Columbus Dispatch is reporting.

    Randazzo’s body was found Tuesday in a Franklin County warehouse he owned, the paper reported. A spokesman for Franklin County Coroner Nathaniel Overmire couldn’t immediately be reached.

    Randazzo — a 74-year-old energy consultant turned regulator — was charged both in state and federal court over his role in a massive utility scandal that broke in July 2020, along with other alleged misdeeds. In the bribery scandal, Akron-based FirstEnergy paid more than $60 million in bribes between 2017 and 2020 in exchange for a $1.3 billion ratepayer bailout.

    DeWine picked Randazzo to be the state’s top regulator after a decade of shady dealings between Randazzo and FirstEnergy, his state indictment says. They include secretly being a paid consultant for FirstEnergy while also serving as general counsel to industrial energy users who were trying to get a better deal from FirstEnergy, the document says.

    Randazzo also secretly skimmed millions from settlements FirstEnergy paid the big users to get them to go along with rate hikes for everybody else, the indictment says.

    Just before DeWine nominated Randazzo to chair the PUCO in early 2019, FirstEnergy’s top executives paid him $4.3 million — a payment that FirstEnergy later conceded was a bribe.

    DeWine’s chief of staff reportedly knew about the payment before Randazzo was nominated, but it’s unclear how much she, DeWine, and others in the administration knew about the more than $10 million Randazzo was paid by FirstEnergy over the years. She was slated to testify at the former regulator’s state trial.

    As PUCO chairman, Randazzo helped draft the bailout legislation and did a number of other lucrative favors for FirstEnergy, court documents and testimony have shown.

    After a lengthy federal trial last year, former House Speaker Larry Householder, R-Glenford, was sentenced to 20 years in prison for his role in the scandal. Former Ohio GOP Chairman Matt Borges was sentenced to five years for his.

    Two others pleaded guilty and await sentencing. Another defendant, lobbyist Neil Clark, died by suicide.

    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.

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  • Further questions about DeWine administration’s involvement in Ohio bribery scandal

    Further questions about DeWine administration’s involvement in Ohio bribery scandal

    File photo of Ohio Gov. Mike DeWine and advisor Laurel Dawson at a press conference. (Photo from WEWS.)

    New court filing gives new details about aide, husband

    BY:  –

    As Gov. Mike DeWine in 2019 nominated Sam Randazzo to be Ohio’s top utility regulator, Randazzo went to great lengths to hide a decade-long relationship with FirstEnergy that had paid him more than $10 million. Those payments included $4.3 million just as DeWine was picking Randazzo, according to court documents filed last week.

    Yet DeWine Press Secretary Dan Tierney in February said it “was well known that Randazzo was a paid consultant for FirstEnergy.” On Tuesday, Tierney modified that statement to say “it was well known to our staff that Mr. Randazzo was an energy consultant, and it was well-known to them and many people that Mr. Randazzo was a consultant employed by First Energy.”

    DeWine’s appointee to chair the Public Utilities Commission of Ohio, Randazzo went on to help write and lobby for a $1.3 billion bailout that Akron-based FirstEnergy paid more than $60 million in bribes to pass, according to a federal jury and the indictments of Randazzo and two former FirstEnergy executives.

    The scandal broke into the open in July 2020, when the FBI arrested former House Speaker Larry Householder, R-Glenford, and four others. Householder and former Ohio GOP Chairman Matt Borges were convicted, two others pleaded guilty, and lobbyist Neil Clark died by suicide.

    DeWine, who signed the bailout law, and his staff haven’t been accused of illegal activity in the case. But with the administration’s many connections to FirstEnergy, questions continue to linger about exactly what DeWine and his team knew about the conspiracy and what they did with that knowledge.

    A big question relates to the period when the governor was picking Randazzo to be the state’s top utility regulator. Did DeWine or top members of his staff know that Randazzo had a long, lucrative relationship with FirstEnergy, one of the biggest utilities he’d be regulating?

    A state indictment of Randazzo said that he had a shady relationship with FirstEnergy stretching back to 2010. It included hiding his work for FirstEnergy from industrial energy users Randazzo served as general counsel as he secretly skimmed from settlement payments FirstEnergy made to the industrial users, the indictment said.

    Big money, big favors

    On Dec. 18, 2018, Gov.-elect DeWine and Lt. Gov.-elect Jon Husted had dinner at the Columbus Athletic Club with FirstEnergy CEO Chuck Jones and Vice President Michael Dowling.

    The executives would be indicted along with Randazzo in February 2024. At the dinner, the men discussed with DeWine and Husted whether to make Randazzo the chief regulator of the executives’ company, the indictment said.

    The executives drove from the dinner to Randazzo’s German Village condo for another discussion. The same evening, Randazzo texted Dowling a column of figures ending with “Total 4,333,333.”

    The indictment said that within weeks, the executives paid Randazzo that amount without an invoice and over a company lawyer’s objections. DeWine nominated him to chair the PUCO a few weeks after that.

    Over the next 18 months, Randazzo labored to draft, pass, and protect the company’s massive bailout and did a number of additional, highly lucrative favors besides, the indictment said. It all ended with his resignation after the FBI searched his condo four months after Householder and the others were arrested.

    But what DeWine and his staff knew about Randazzo’s relationship with FirstEnergy as they were considering whether to make him its regulator appears to be a matter of dispute.

    “In January 2019, FirstEnergy agreed to pay out in full Randazzo’s consulting services contract just before he was nominated to run the PUCO,” a bill of particulars that was filed last week to accompany the indictment says. “It was not a gift: Randazzo would work hard for FirstEnergy from inside the government. He did not disclose his relationship, going so far as to lie about it in testimony to the General Assembly and failing to disclose to the Ohio Ethics Commission the massive sums of money he’d received from the company he would soon regulate.”

    Who knew?

    Randazzo’s indictment says Randazzo did, however, “tell the Governor-elect through his incoming Chief of Staff that he had received $4.3 million from FirstEnergy, which he claimed was final payment of a ‘consulting agreement.’” It added that Randazzo didn’t disclose the other millions he made as a FirstEnergy consultant or his work lobbying for the electricity giant.

    Tierney, DeWine’s press secretary, on Tuesday said that Randazzo’s consulting work for FirstEnergy was well known — at least inside the administration.

    “I note our office is not a party to the prosecution, so we cannot vouch for any claims made by the prosecution or defense in these cases,” he said in an email. “Speaking for the staff of the Governor’s office, it was well known to our staff that Mr. Randazzo was an energy consultant, and it was well-known to them and many people that Mr. Randazzo was a consultant employed by FirstEnergy.”

    However, FirstEnergy’s top brass feared public knowledge of their relationship could scuttle his nomination. On Jan. 30, 2019, Dowling, the FirstEnergy vice president, sent a panicked text to CEO Jones. It said Randazzo was going to pull out of the PUCO nomination process because the press found the name of one of his shell companies on a bankruptcy filing by a subsidiary FirstEnergy was seeking to bail out.

    When Randazzo’s nomination got back on track, the executives expressed relief.

    “A bullet grazed the temple,” Dowling told Jones, according to one of the texts filed as part of a civil suit over the scandal.

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

    So while administration insiders might have known about the Randazzo-FirstEnergy relationship, it clearly wasn’t common knowledge to the public who would have to pay the utility’s inflated bills. Tierney didn’t answer why, if DeWine knew that Randazzo was a FirstEnergy consultant, he didn’t disclose that to the public the PUCO is supposed to protect from monopoly utilities.

    Inside connections

    While Tierney said he couldn’t vouch for the information in the indictments or other court filings, he said it would have been extraordinary to ask Randazzo whether he had been paid money by Ohio utilities as the administration was vetting him for the position as their chief regulator.

    “…it would have been unusual to review past employment compensation with the Governor as part of cabinet director vetting,” Tierney said.

    As for the chief of staff who did the vetting — Laurel Dawson — she had a FirstEnergy connection of her own. Her husband, Mike Dawson, was a FirstEnergy lobbyist whom the indictment said had received a $10,000 loan from Randazzo a few years earlier.

    It’s unclear whether the loan was repaid or whether Laurel Dawson reported it to DeWine. The DeWine aide isn’t speaking publicly.

    It’s also unclear whether Laurel Dawson told the governor that her husband participated in an early 2020 text conversation with Randazzo and Dowling. The conversation was included in the bill of particulars filed last week.

    The three jokingly discussed rate cases and decoupling — two matters for which prosecutors say Randazzo had by then received multi-million-dollar bribes from FirstEnergy in exchange for doing even more valuable favors for the company.

    State prosecutors say that for Randazzo, engaging in the exchange amounted to an improper ex parte conversation. It might have been of interest to DeWine to know that his chief of staff’s lobbyist husband was having such talks with the governor’s PUCO chairman.

    According to a witness list reported on Tuesday by the Toledo Blade, prosecutors plan to call both Dawsons to testify at the trial of Randazzo, Dowling and Jones.

    Pretending?

    Despite the questions surrounding what Laurel Dawson knew about Randazzo and FirstEnergy — and about what she told her boss — she remains on his staff as an advisor, making $182,000 last year.

    “The Governor has previously stated on the record at media briefings he has full faith in Ms. Dawson,” Tierney said.

    But what did he know?

    The indictment of DeWine’s PUCO chairman and the energy executives has an image of notes that Dowling made in late 2018 as FirstEnergy lobbyist Josh Rubin coached him up on how to talk to Gov.-elect DeWine. They warn the FirstEnergy executives not to tell him that they planned to go meet Randazzo just after discussing his appointment at dinner with DeWine and Husted.

    Rubin added that DeWine could be cagey.

    “Sometimes he knows what you’re talking about,” Dowling wrote in his notes. “Sometimes he doesn’t. Sometimes he does and pretends he doesn’t.”

    Tierney was asked if DeWine now is feigning ignorance of the dealings between his administration, his nominee to head the PUCO and FirstEnergy. Tierney replied by saying that some of the players in the scandal have shown a tendency to make questionable statements.

    “Throughout the (utility scandal) prosecutions, third parties have made claims which have been self-serving and ultimately not true,” he said. “I will note, however, the state prosecution alleges the defendants deliberately withheld relevant information from the Governor, Lt. Governor, and other government officials.”

    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.

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  • Digging into the latest indictment of former Ohio House Speaker Larry Householder

    Digging into the latest indictment of former Ohio House Speaker Larry Householder

    Former Ohio House speaker Larry Householder arrives for day two of his racketeering trial. (Photo by Morgan Trau, WEWS.)

    Some allegations address Householder’s actions after the feds arrested him in 2020

    BY:  – Ohio Capital Journal

    Former House Speaker Larry Householder has again been indicted on charges related to his actions in a massive bribery and money laundering scandal.

    The Glenford Republican is already serving a 20-year sentence in federal prison after being convicted last March of racketeering in a scheme in which Akron-based FirstEnergy paid more than $60 million to purchase a $1.3 billion, ratepayer-financed bailout.

    The state charges concern some conduct Householder engaged in after he was arrested in July 2020. They also concern debts and other items that Householder admitted during his federal trial that he didn’t report to the Joint Legislative Ethics Commission as required.

    The former speaker faces maximum sentences of from three to eight years on each of the 10 state charges from the Cuyahoga grand jury. And importantly, if he’s convicted of one of the counts — theft in office — he’s permanently disqualified from holding public office.

    In a video accompanying the announcement of the indictment, Ohio Attorney General Dave Yost noted that Householder has served two different stints as speaker, and that if he’s successful in appealing his federal conviction, “he might well try for a third bite at the apple.”

    Five of the 10 state counts Householder faces stem from his use of campaign funds to pay lawyers after his July 2020 arrest. In the video in which Yost appeared, Deputy Attorney General Carol O’Brien said Householder knew that was illegal when he did it.

    Several other counts relate to Householder “not reporting significant credit card debts going back to at least 2016, as well as gifts from lobbyists and significant loans from individuals.”

    Among gifts Householder received from FirstEnergy were flights to and from the 2017 inaugural of Donald Trump.

    Householder is due in Cuyahoga Common Pleas Court to be arraigned on April 12.

    The new state charges follow the announcement last month of state charges against former FirstEnergy CEO Chuck Jones and Vice President Michael Dowling. The executives are accused of financing the $60 million scheme to bail out two unprofitable nuclear plants owned by the utility so they could spin them off.

    Also indicted was Sam Randazzo, Gov. Mike DeWine’s pick to be Ohio’s top utility regulator. Jones and Dowling paid Randazzo $4.3 million mere weeks before DeWine nominated him to the commission in February 2019.

    DeWine’s chief of staff, Laurel Dawson, knew of the payment, but an administration spokesman said she didn’t tell the governor until after the FBI searched Randazzo’s Columbus condo in 2020.

    The governor stands behind Dawson because it wasn’t until 2021 that the payment was alleged to be a bribe, the spokesman said.

    Randazzo was charged by federal authorities in relation to his role in the scandal in December.

    Despite all the prosecutions and allegations of wrongdoing, the bailout law, House Bill 6, is still on the books. As a result, ratepayers have ponied up nearly a quarter-billion dollars to prop up two aging coal plants.

    Despite the fact that Ohio ratepayers are shouldering that burden, one of the plants isn’t even in Ohio, but in Indiana instead.

    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.

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  • Corruption tax? Policy expert says that’s basically what Ohio utility consumers have been paying

    Corruption tax? Policy expert says that’s basically what Ohio utility consumers have been paying

    Mugshot of former Ohio House Speaker Larry (Photo from the Butler County Jail.)

    BY:  – Ohio Capital Journal

    Many politicians — especially conservatives — are loath to approve anything that could be construed as a tax increase.

    But since 2009, Ohio’s leadership has gone along with a number of questionable rate hikes demanded by regulated utilities. They’ve functioned in the same manner as tax increases — regressive ones with unsavory origins.

    There were new state charges earlier this month in Ohio’s massive FirstEnergy bribery scandal. They brought new attention to the issue, but that scandal is hardly the only time Ohio utilities have been able to impose questionable rate increases on their unsuspecting customers.

    In the scandal, Akron-based FirstEnergy paid more than $61 million in bribes in exchange for the 2019 passage and protection of a $1.3 billion ratepayer bailout. As a consequence, former House Speaker Larry Householder, R-Glenford, is serving a 20-year federal prison sentence.

    The state charges filed this month against two top FirstEnergy executives and the state’s top regulator pertain to those crimes. But they also describe more than a decade’s worth of additional shady increases in which payoffs played a central role.

    They accuse Sam Randazzo — whom Ohio Gov. Mike DeWine later appointed to be top regulator — of secretly helping FirstEnergy make huge, secret payments to powerful energy users. In exchange, the charges say, the industrial users dropped their opposition to rate increases FirstEnergy wanted to impose on all its customers.

    The payments might not have been illegal, but they functioned as kickbacks all the same.

    The Columbus Dispatch on Sunday reported that in 2008 then-Gov. Ted Strickland, a Democrat, tried to negotiate an end to the shady practice, but then-House Speaker Jon Husted killed the attempt, a former aide to Strickland told the paper. Husted is now DeWine’s lieutenant governor and is said to be planning a run in the 2026 Ohio Republican primary to be governor in his own right.

    Those increases are in addition to a whole slew of other rate hikes that Ohio’s erstwhile regulator has granted, but the state Supreme Court later ruled to be illegal. They total more than $1.5 billion worth altogether. Even though the gains have been ruled unlawful, utilities have gotten to keep them because the Public Utilities Commission of Ohio keeps granting such increases without building in a refund mechanism in the event they’re struck down.

    Jenifer French, DeWine’s appointment to replace the disgraced Randazzo, has repeated PUCO staff claims that such refund mechanisms are illegal. But the legal case seems dubious and watchdogs and lawmakers from both parties dispute it.

    So Ohio ratepayers have shelled out billions in illegal electric payments and untold millions more as the consequence of shady kickbacks to powerful companies. Those who allowed such payments are responsible for what is the functional equivalent of a tax increase, said Rob Moore, principal of Scioto Analysis, a Columbus firm that applies economics to questions of public policy.

    One reason they work the same as a tax is because one has little choice in 2024 about paying for electrical service, he said.

    “You can’t get away from it,” Moore said. “You’re going to have to pay something for electricity.” He later added, “That’s functionally no different from a tax.”

    And it’s one that falls extra-hard on the poor.

    Disconnected electricity and gas can destroy perishable food while also taking away the ability to cook it. For those who are struggling, finding money and getting to the store for one batch of food can already be a challenge. Having to do it again after arranging a reconnection can be even more difficult.

    Disconnection also can be used as a rationale for children’s services to break up a family, the Energy News Network reported in 2022.

    The news outlet reported that as part of a story about nearly 200,000 disconnections by Ohio electric utilities at the height of the coronavirus pandemic. Advocates asked the PUCO for relief, but the regulatory agency said it was powerless to act.

    Moore said that if you view utilities as the practical equivalent of a tax, it’s a regressive one.

    “In general, lower-income people pay more of their income on utilities than upper-income people,” he said.

    Moore cited a 2013 report by the U.S. Energy Information Agency saying that households in the bottom 20% of incomes made 6% of their total expenditures on home energy, while those in the top 20% paid half that.

    Energy-insecure households are likely to be poorer still. The agency last year reported that they paid 27% more in real terms than everybody else — $1.24 per square foot vs. 98 cents.

    As with the state and local tax burden, the extra costs Householder, the PUCO and others have imposed on Ohio seem to be falling most heavily on those least able to pay it.

    “Basically, he just levied a tax and lined his pockets with it,” Moore said of the former speaker.

    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 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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