FirstEnergy to Pay $230M in Settlement in Ohio Bribery Case

By MARK GILLISPIE
FirstEnergy Corp. would pay a $230 million penalty and fully cooperate with federal authorities as part of an agreement announced Thursday to settle federal charges against the company in a sweeping bribery scheme in Ohio.

The U.S. Attorney’s Office in Cincinnati and the FBI are scheduled to hold a news briefing later Thursday morning on the deferred prosecution agreement, which charges the firm an information with conspiracy to commit honest services fraud.

As part of the deal to end the government’s prosecution, FirstEnergy agrees to make public all its related campaign contributions within 30 days, to pay a $230 million penalty and to continue carrying out sweeping internal changes aimed at preventing future corporate misdeeds.

FirstEnergy officials announced earlier this year it was in talks with the prosecutors on the agreement and that it could affect the company’s revenue.

The company has been accused by authorities of secretly funding a $60 million bribery scheme to help win legislative passage of a $1 billion bailout for two nuclear power plants operated by a wholly-owned subsidiary when the bill was passed in July 2019.

FirstEnergy in the last year has fired six high-ranking executives, including CEO Chuck Jones.

The agreement signed by current FirstEnergy President and CEO Steven Strah said the company paid “Public Official B” $4.3 million through his consulting company to further the company’s interests as chairman of the Public Utilities Commission of Ohio, “relating to the passage of nuclear legislation,” and the firms other legislative priorities.

Public Official B appears to be Sam Randazzo, who resigned from the PUCO last November after FBI agents searched his Columbus townhome and FirstEnergy revealed the payment to end a consulting agreement with his company.

A telephone message seeking comment was left Thursday with Randazzo.

Neither Randazzo nor Jones have been charged criminally.

On Thursday morning, FirstEnergy released the following corporate statement “in accordance with its obligations under the previously announced deferred prosecution agreement with the U.S. Attorney’s Office for the Southern District of Ohio to resolve the Department of Justice investigation.”

“Central to FirstEnergy Corp.’s effort to influence the legislative process in Ohio was the use of 501(c)(4) corporate entities. FirstEnergy Corp. used the 501(c)(4) corporate form as a mechanism to conceal payments for the benefit of public officials and in return for official action. FirstEnergy Corp. used 501(c)(4) entities in this way because the law does not require disclosure of donors to a 501(c)(4) and there is no ceiling that limits the amount of expenditures that can be paid to a 501(c)(4) entity for the purpose of influencing the legislative process. This effort would not have been possible, both in the nature and volume of money provided, without the use of a 501(c)(4) entity.”

Pictured: In this 2015 file photo, FirstEnergy Corp. then-President and CEO Charles “Chuck” Jones appears at the company’s Akron, Ohio headquarters. (Phil Masturzo/Akron Beacon Journal via AP, File)

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