Recent Ohio events have added details on how Akron-based utility giant FirstEnergy has owned Ohio’s utility regulators, the legislature, and, perhaps the state house. The utility has been accused of major bribery of the Republican Ohio House speaker, Larry Householder, in a scheme to promote and defend a $1 billion legislative bailout.
More generally, critics have charged that the company essentially owns Ohio utility regulation, including possibly the office of Republican Gov. Mike DeWine.
On Oct. 14, the state Supreme Court ruled that the state utility regulator, the Public Utilities Commission of Ohio (PUCO) erred in April 2020 in approving allowing FirstEnergy to create a new subsidiary, “FirstEnergy Advisors,” to advise consumers of the best deals when shopping for electric suppliers.
Elected Chief Justice Pat DeWine, Gov. DeWine’s son, wrote that “PUCO granted the certificate request, issuing a barebones order that offered no explanation as to how FirstEnergy Advisors met the applicable legal requirements.”
Former Speaker Householder has been charged in federal court on charges of racketeering and bribery in orchestrating the passage of HB 6, the measure that would have allowed FirstEnergy to charge customers more to keep the two nuclear plants operating. He has pleaded not guilty.
In late September this year, DeWine’s legislative director Dan McCarthy resigned. He is a former FirstEnergy lobbyist and an executive with a lobbying firm that the company supported in a referendum to overturn a state law to keep the company’s Davis-Besse and Perry nuclear plants operating amid the swirl of controversy over the bailout legislation, HB 6, which DeWine nullified in the wake of the scandal.
McCarthy, nominally a Democrat, defended his work as a lobbyist for FirstEnergy on the failed citizen referendum to repeal the bailout, writing that he was not aware of “anything illegal or unethical” about the work he did in lobbying for the utility.
In addition to the utility’s alleged bribery of the legislature, the state’s utility regulatory, the Public Utility Commission of Ohio (PUCO), and its former chairman Sam Randazzo, has come under serious fire.
DeWine appointee Randazzo was the head of the PUCO when the commission approved the FirstEnergy affiliate deal. He’s a long-time Ohio energy lawyer, going back into the 1990s as the state implement utility restructuring that included customer choice of utility suppliers. DeWine named him to head the PUCO in 2018.
In late Nov. 2020, in pursuit of the FirstEnergy bribery allegations, the Randazzo’s Columbus home. Shortly after that, FirstEnergy revealed a Securities and Exchange Commission filing that alleged the company paid $4 million in 2019 in a six-year contract with a company that appeared to be linked to “associated with an individual who subsequently was appointed to a full-time role as an Ohio government official directly involved in regulating FE’s Ohio distribution companies.” Randazzo resigned from the PUCO two days later. He has not been formally charged with any crimes.
Early last August, according to the Columbus Dispatch, “Federal investigators sent two subpoenas to the Public Utilities Commission of Ohio, seeking records related to former commission chairman Sam Randazzo, House Bill 6, Akron-based FirstEnergy and other matters.
“Prosecutors and FBI agents wanted Randazzo’s calendar, communications and documents from his Microsoft OneDrive account.”
Two weeks later, the Cincinnati Enquirer reported, “An Ohio judge froze up to $8 million of former Public Utilities Commission of Ohio Chairman Sam Randazzo’s assets after he sold millions in property over the past six months.” The freeze order came at the request of Ohio Attorney General Dave Yost. In a statement, Yost said, “FirstEnergy admitted to bribing Randazzo to the tune of $4.3 million to help construct House Bill 6, and he should be accountable for those actions. Randazzo is making move that will make it harder to hold him financially accountable for accepting bribes.”
–Kennedy Maize