The largest electric utility bribery scandal in U.S. history appears to be nearing an end, as officials of the phony Ohio nonprofit Generation Now, a bogus organization created by Akron-based utility FirstEnergy and key Ohio Republican legislators to subsidize two of the utility’s uneconomic power plants, have pleaded guilty to federal racketeering charges.
In a plea deal with federal prosecutors, Generation Now admitted that it conspired with former Ohio Speaker of the House, Republican Larry Householder, and his minions in a $61-million effort to pass and protect from a referendum House Bill 6, which directed subsidies to First Energy’s Davis-Besse and Perry power plants.
According to the court record, “As part of the conspiracy, Generation Now was organized at Householder’s discretion for the benefit of Householder and the Householder enterprise, knowing that the purpose of Generation Now was for it to be used as a mechanism to receive undisclosed donations to benefit Householder and to advance Householder efforts to become Speaker of the House of Representative.”
The money came from unnamed “Company A,” which was FirstEnergy. Generation Now plead guilty to one count of racketeering, resulting in seizure of some $1.5 million from two bank accounts, and five years’ probation.
Ohio’s House Bill 6, which became law in July 2019 after a long and contentious consideration in the legislature, gave FirstEnergy more than $1 billion in subsidies to keep the two plants in service. The subsidies came in the form of rate increases for the utility’s customers.
The legislation survived an attempt by opponents to overturn it in a statewide referendum. Supporters of the legislation using Generation Now to coordinate and fund the anti-referendum campaign. When the bribery and racketeering charges surfaced, the legislature tried to repeal the law, with no success. Ohio Republican Governor Mike DeWine, who originally signed the bill into law, came out against it after the scandal surfaced.
When the legislature convened in January, Democratic lawmakers said repeal of HB 6 would again be an important legislative agenda item. Democratic Rep. Adam Miller said repeal “should be a layup, this isn’t a three-point play, this is a layup, this is easy. Let’s repeal it.”
In other utility bribery news, in January, the Illinois House purged long-time Democratic speaker Mike Madigan, 79, who was seeking his 19th term in that position, establishing that corruption tied to utility bribery is a bipartisan event. He was the longest-serving legislative leader in U.S. history, having served in the post for 36 of the past 38 years.
Madigan’s power over Illinois government was legendary. Republican state Sen. Terri Bryant told The Pantagraph newspaper in Bloomington, “When people say he ran the show, there is no possible way to say that in a strong enough way. No bill moved without his approval. No committee functioned without his stamp of approval. He didn’t just turn off the spigot on your bills. He’d turn off the spigot on your campaign money.”
Federal filings showed that Chicago’s Commonwealth Edison, an Exelon subsidiary, gave Madigan cronies no-show jobs and consulting contracts in return for legislation benefitting the utility to the tune of some $150 million. That led to Madigan’s downfall.
Illinois Policy, a group aimed at reform in the state government, commented, “Without structural reforms he long worked to prevent, the state will continue down a path of higher taxes, worsening social services and outmigration. For example, due to unsustainable pension promises, Madigan oversaw the long slide of Illinois from one of the most credit-worthy states in the nation to the least – teetering on the edge of ‘junk’ status.”
–Kennedy Maize