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Judge orders FirstEnergy to turn over records tied to bribery scandal

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Posted at 6:15 AM, Apr 21, 2022
and last updated 2022-04-21 06:15:02-04

The following article was originally published in the Ohio Capital Journal and published on under a content-sharing agreement.

An administrative judge for the Public Utilities Commission of Ohio once again ordered FirstEnergy Corp. to hand over thousands of documents to a watchdog state agency, partially rebuffing the company’s request for a four-month delay.

The ruling Wednesday caps off a drawn-out fight over records the company has already given to federal regulators for an audit but has fought to withhold from the Ohio Consumers’ Counsel, which represents residential ratepayers before the PUCO.

That audit, released in February, focused in part on “significant shortcomings” of oversight of FirstEnergy’s lobbying and political conduct. The company entered into a deferred prosecution agreement with the U.S. Department of Justice last summer, admitting to two bribery schemes totaling about $64 million involving top state officials. FirstEnergy agreed to pay a $230 million penalty. None of its executives have been charged.

The Ohio Consumers’ Counsel first asked for the records in February 2021. After a protracted legal back-and-forth, the PUCO on March 11 of this year gave FirstEnergy 30 days to turn them over. Just before that deadline earlier this month, the company asked for another 120-day delay to get the records together. In court filings, the Consumers’ Counsel accused FirstEnergy of “weaponizing” the customary pre-trial evidence-exchange process to stymie its research.

PUCO Attorney Examiner (essentially an administrative law judge) Megan Addison on Wednesday gave FirstEnergy until May 20 to turn the documents over. However, specific records pertaining directly to the company’s lobbying practices regarding legislation at the center of the criminal investigations must be turned over by May 6.

“There’s no reason this issue couldn’t be resolved among the parties, and frankly, it should have been,” she said.

Attorneys for FirstEnergy declined to comment after the hearing. FirstEnergy is working to produce the required documents, according to a company spokeswoman.

“Today’s PUCO ruling is a victory of sorts for consumers,” said Jon Blackwood, a spokesman for the Ohio Consumers’ Counsel. “But FirstEnergy delayed our case preparation for more than a year. So our consumer protection can be a long process at the PUCO, especially when FirstEnergy is involved.”

In signing the deferred prosecution agreement, FirstEnergy said it would cooperate with prosecutors to possibly avert a charge of honest services wire fraud.

In an attached statement of facts, the company admitted it paid $60 million into a nonprofit secretly controlled by House Speaker Larry Householder to pass House Bill 6 in 2019. The legislation, which bailed out nuclear plants owned at the time by the company among other provisions, was worth an estimated $1.3 billion to the company. Householder, accused of using the money for personal and political gain, has pleaded not guilty and awaits trial next year.

Additionally, FirstEnergy said it paid a $4.3 million bribe to Sam Randazzo, who served as the PUCO chairman. He resigned in November 2020, shortly after FBI agents raided his condominium and left with boxes of material. Randazzo has denied wrongdoing and has not been charged with a crime.

The audit — which the Federal Energy Regulatory Commission ordered months before House Bill 6 passed and was released in February — identified nearly $71 million in payments from FirstEnergy to political entities supporting HB 6. After two men pleaded guilty to racketeering charges and three more were indicted in connection with the scandal, FirstEnergy informed FERC that its initial responses for records in the audit were “incomplete and omitted several payments,” the audit states. It also identified “significant shortcomings” in FirstEnergy’s political and lobbying activities.

The FERC audit also states that FirstEnergy told the auditors in February 2021 that the company is investigating nearly $29 million in payments between 2003 and 2020 to “sixteen entities associated with one individual.” A FirstEnergy spokeswoman declined to identify the individual.