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San Francisco Chronicle
3 days ago
- Business
- San Francisco Chronicle
5 years after Ohio's $60M bribery scandal, critics say more could be done to prevent a repeat
COLUMBUS, Ohio (AP) — Five years after a $60 million bribery scheme funded by FirstEnergy Corp. came to light in Ohio, expert observers say the resulting prosecutions, lawsuits, penalties and legislation haven't led to enough change and accountability to prevent politicians and corporate executives from cutting similar deals in the future. The scheme — whose prospective $2 billion-plus pricetag to consumers makes it the largest infrastructure scandal in U.S. history — surfaced with the stunning arrests of a powerful Republican state lawmaker and four associates on July 21, 2020. That lawmaker, former House Speaker Larry Householder, is serving 20 years in federal prison for masterminding the racketeering operation at the center of the scandal. Jurors agreed with prosecutors that money that changed hands wasn't everyday political giving, but an elaborate secret scheme orchestrated by Householder to elect political allies, become the House speaker, pass a $1 billion nuclear bailout law in House Bill 6 and crush a repeal effort. One of the dark money groups Householder used also pleaded guilty to racketeering. Householder and a former lobbyist have unsuccessfully challenged their convictions. Two of the arrested associates pleaded guilty, and the other died by suicide. Dark money keeps flowing Any hope that the convictions would have clarified federal law around 501(c)4 nonprofit 'dark money' groups or prompted new restrictions on those hasn't materialized, said former U.S. Attorney David DeVillers, who led the initial investigation. 'I think it's actually worse than it was before,' he said. 'Nationally, you have both Democrats and Republicans using these, so there's no political will to do anything about it.' Indeed, a study released in May by the Brennan Center for Justice found that dark money unleashed by the 2010 Citizens United decision hit a record high of $1.9 billion in 2024 federal races, nearly double the $1 billion spent in 2020. The vast majority of money from undisclosed donors raised into dark money accounts now goes to super PACs, providing them a way to skirt a requirement that they make their donors public, the study found. DeVillers said one positive result of the scandal is that Ohio lawmakers appear genuinely concerned about avoiding quid pro quos, real or perceived, between them and their political contributors. Anti-corruption legislation perennially introduced by Ohio Democrats since the scandal broke has gone nowhere in the GOP-dominated Legislature. Republican legislative leaders have said it is outside their authority to amend federal campaign finance law. The U.S. Attorney's office declined to discuss the investigation because prosecutions remain ongoing. Two fired FirstEnergy executives have pleaded not guilty on related state and federal charges and await trial. Former Public Utilities Commission of Ohio Chairman Samuel Randazzo, to whom FirstEnergy admitted giving a $4.3 million bribe in exchange for regulatory favors, had faced both federal and state charges. He died by suicide after pleading not guilty. State regulator hasn't penalized FirstEnergy Akron-based FirstEnergy — a $23 billion Fortune 500 company with 6 million customers in five states — admitted using dark money groups to bankroll Householder's ascendance in exchange for passage of the bailout bill. It agreed to pay $230 million and meet other conditions to avoid prosecution, and faced other sanctions, including a $100 million civil penalty by the U.S. Securities and Exchange Commission. But FirstEnergy hasn't yet faced consequences from the state regulator. 'They never actually got penalized by regulators at the PUCO level,' said Ohio Consumers' Counsel Maureen Willis, the lawyer for Ohio utility customers. Testimony in four PUCO proceedings stemming from the scandal finally began last month after the cases were delayed for nearly two years, in part at the request of the Justice Department. They're intended to determine whether FirstEnergy used money for bribes that was meant for grid modernization and whether it improperly comingled money from its different corporate entities. FirstEnergy spokeperson Jennifer Young said it invested $4 billion in grid upgrades in 2024 and plans to spend a total of $28 billion through 2029. Young said FirstEnergy has redesigned its organizational structure, established a dedicated ethics and compliance office, overhauled the company's political activity and lobbying practices and strengthened other corporate governance and oversight practices. 'FirstEnergy is a far different company today than it was five years ago,' she said. The PUCO also made changes in response to the scandal. Chair Jenifer French told state lawmakers that ethics training has been enhanced, staff lawyers and the administrative law judges who hear cases now report to different directors to ensure legal independence, and she never takes a meeting alone. Some tainted money hasn't been returned to customers Ashley Brown, a retired executive director of the Harvard Electricity Policy Group who previously served as a PUCO commissioner, said the commission is the only state entity with the power to order FirstEnergy to return tainted cash — including the bribe money — to customers. That largely hasn't happened. He said the Ohio commission had vast power to hold FirstEnergy accountable for its misdeeds but hasn't conducted its own management audit of the energy giant, demanded an overhaul of FirstEnergy's corporate board or pressed for public release of FirstEnergy's own internal investigation of the scandal, whose findings remain a mystery. Shareholders won some accountability measures as part of a $180 million settlement in 2022, but they continue to fight in court for release of the investigation. Willis does, too. 'How do you allow a utility to operate a vast criminal conspiracy within the utility (with) consumer dollars, and you don't even look at what went wrong?' Brown said. PUCO spokesperson Matt Schilling reiterated that the commission's probes are ongoing. He said the panel has vowed to take its proceedings 'wherever the facts lead.' The portion of HB 6 that bailed out two FirstEnergy-affiliated nuclear plants was repealed in 2021, and $26 million was refunded to customers. The scandal investigation revealed that other power distribution companies got a lucrative payout of their own added to the bill in exchange for their buy-in: subsidies for two unprofitable Cold War-era coal plants. It wasn't until April that a law was passed repealing those subsidies. Until that takes effect Aug. 14, the charges cost Ohio ratepayers $445,679 a day — and it's unclear if or when they'll get that money back. A ticker on Willis' website puts the total they've paid at more than $500 million and counting.
Winnipeg Free Press
3 days ago
- Business
- Winnipeg Free Press
5 years after Ohio's $60M bribery scandal, critics say more could be done to prevent a repeat
COLUMBUS, Ohio (AP) — Five years after a $60 million bribery scheme funded by FirstEnergy Corp. came to light in Ohio, expert observers say the resulting prosecutions, lawsuits, penalties and legislation haven't led to enough change and accountability to prevent politicians and corporate executives from cutting similar deals in the future. The scheme — whose prospective $2 billion-plus pricetag to consumers make it the largest infrastructure scandal in U.S. history — surfaced with the stunning arrests of a powerful Republican state lawmaker and four associates on July 21, 2020. That lawmaker, former House Speaker Larry Householder, is serving 20 years in federal prison for masterminding the racketeering operation at the center of the scandal. Jurors agreed with prosecutors that money that changed hands wasn't everyday political giving, but an elaborate secret scheme orchestrated by Householder to elect political allies, become the House speaker, pass a $1 billion nuclear bailout law in House Bill 6 and crush a repeal effort. One of the dark money groups Householder used also pleaded guilty to racketeering. Householder and a former lobbyist have unsuccessfully challenged their convictions. Two of the arrested associates pleaded guilty, and the other died by suicide. Dark money keeps flowing Any hope that the convictions would have clarified federal law around 501(c)4 nonprofit 'dark money' groups or prompted new restrictions on those hasn't materialized, said former U.S. Attorney David DeVillers, who led the initial investigation. 'I think it's actually worse than it was before,' he said. 'Nationally, you have both Democrats and Republicans using these, so there's no political will to do anything about it.' Indeed, a study released in May by the Brennan Center for Justice found that dark money unleashed by the 2010 Citizens United decision hit a record high of $1.9 billion in 2024 federal races, nearly double the $1 billion spent in 2020. The vast majority of money from undisclosed donors raised into dark money accounts now goes to super PACs, providing them a way to skirt a requirement that they make their donors public, the study found. DeVillers said one positive result of the scandal is that Ohio lawmakers appear genuinely concerned about avoiding quid pro quos, real or perceived, between them and their political contributors. Anti-corruption legislation perennially introduced by Ohio Democrats since the scandal broke has gone nowhere in the GOP-dominated Legislature. Republican legislative leaders have said it is outside their authority to amend federal campaign finance law. The U.S. Attorney's office declined to discuss the investigation because prosecutions remain ongoing. Two fired FirstEnergy executives have pleaded not guilty on related state and federal charges and await trial. Former Public Utilities Commission of Ohio Chairman Samuel Randazzo, to whom FirstEnergy admitted giving a $4.3 million bribe in exchange for regulatory favors, had faced both federal and state charges. He died by suicide after pleading not guilty. State regulator hasn't penalized FirstEnergy Akron-based FirstEnergy — a $23 billion Fortune 500 company with 6 million customers in five states — admitted using dark money groups to bankroll Householder's ascendance in exchange for passage of the bailout bill. It agreed to pay $230 million and meet other conditions to avoid prosecution, and faced other sanctions, including a $100 million civil penalty by the U.S. Securities and Exchange Commission. But FirstEnergy hasn't yet faced consequences from the state regulator. 'They never actually got penalized by regulators at the PUCO level,' said Ohio Consumers' Counsel Maureen Willis, the lawyer for Ohio utility customers. Testimony in four PUCO proceedings stemming from the scandal finally began last month after the cases were delayed for nearly two years, in part at the request of the Justice Department. They're intended to determine whether FirstEnergy used money for bribes that was meant for grid modernization and whether it improperly comingled money from its different corporate entities. FirstEnergy spokeperson Jennifer Young said it invested $4 billion in grid upgrades in 2024 and plans to spend a total of $28 billion through 2029. Young said FirstEnergy has redesigned its organizational structure, established a dedicated ethics and compliance office, overhauled the company's political activity and lobbying practices and strengthened other corporate governance and oversight practices. 'FirstEnergy is a far different company today than it was five years ago,' she said. The PUCO also made changes in response to the scandal. Chair Jenifer French told state lawmakers that ethics training has been enhanced, staff lawyers and the administrative law judges who hear cases now report to different directors to ensure legal independence, and she never takes a meeting alone. Some tainted money hasn't been returned to customers Ashley Brown, a retired executive director of the Harvard Electricity Policy Group who previously served as a PUCO commissioner, said the commission is the only state entity with the power to order FirstEnergy to return tainted cash — including the bribe money — to customers. That largely hasn't happened. He said the Ohio commission had vast power to hold FirstEnergy accountable for its misdeeds but hasn't conducted its own management audit of the energy giant, demanded an overhaul of FirstEnergy's corporate board or pressed for public release of FirstEnergy's own internal investigation of the scandal, whose findings remain a mystery. Shareholders won some accountability measures as part of a $180 million settlement in 2022, but they continue to fight in court for release of the investigation. Willis does, too. Monday Mornings The latest local business news and a lookahead to the coming week. 'How do you allow a utility to operate a vast criminal conspiracy within the utility (with) consumer dollars, and you don't even look at what went wrong?' Brown said. PUCO spokesperson Matt Schilling reiterated that the commission's probes are ongoing. He said the panel has vowed to take its proceedings 'wherever the facts lead.' The portion of HB 6 that bailed out two FirstEnergy-affiliated nuclear plants was repealed in 2021, and $26 million was refunded to customers. The scandal investigation revealed that other power distribution companies got a lucrative payout of their own added to the bill in exchange for their buy-in: subsidies for two unprofitable Cold War-era coal plants. It wasn't until April that a law was passed repealing those subsidies. Until that takes effect Aug. 14, the charges cost Ohio ratepayers $445,679 a day — and it's unclear if or when they'll get that money back. A ticker on Willis' website puts the total they've paid at more than $500 million and counting.
Yahoo
11-06-2025
- Business
- Yahoo
Ohio regulators begin House bill 6 hearings as lawmakers mull anti-corruption legislation
Aerial photograph of the OVEC-operated Kyger Creek Power Plant in Cheshire. (Getty Images.) The Public Utilities Commission of Ohio on Tuesday kicked off several weeks of hearings related the House Bill 6 scandal. The proceedings braid together three different cases tied to FirstEnergy's scheme to bribe lawmakers and regulators to bail out nuclear and coal plants. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX Meanwhile in Washington, D.C., an Ohio Congresswoman wants to expand the definition of an 'official act' to ensure corrupt politicians can't wriggle out of accountability. At the same time, state lawmakers in Ohio are mulling campaign finance changes that would allow corporations and unions to make unlimited contributions to dark money groups like the ones at the center of the HB 6 scandal. The HB 6 hearings bring together almost two dozen attorneys representing utilities, consumers, and several interested parties from the energy and manufacturing industry. As part of the proceedings, each party gets a chance to cross examine witnesses. Several FirstEnergy officials who previously refused to testify citing their Fifth Amendment rights will take the stand in coming hearings. State utility regulators preparing for Ohio House Bill 6 hearing But after years in the works, the proceedings didn't exactly burst out of the gate. Attorneys sparred before starting about what evidence was admissible and the correct order of cross examination. Once the show got on the road, an auditor from Blue Ridge Consulting named Donna Mullinax took the stand to discuss a 2021 report on FirstEnergy's capital recovery rider. Utility companies in Ohio can get approval to state regulators to charge customers for investments in improving their infrastructure. The company recoups that investment by tacking a surcharge on consumers' bills known as a rider. The Blue Ridge audit dug into FirstEnergy's books to determine whether the company's expenditures were reasonable. Auditors determined that the company's 'revenue requirements calculation is not unreasonable,' but state regulators later asked for a closer look. In that expanded scope audit, Blue Ridge found more than 20 payments to organizations related to former PUCO Chairman Sam Randazzo. 'I didn't know who he was,' Mullinax told attorneys for the Ohio Consumers' Counsel. In all, the report indicated FirstEnergy funneled roughly $14.4 million to the Randazzo-connected entities, and many of those payments lacked supporting documents like a contract or purchase order. DeWine says Randazzo's ties to First Energy were well known, but the evidence of this is lacking As part of a 2021 deferred prosecution agreement, FirstEnergy acknowledged paying a $4.3 million bribe to Randazzo, identified as 'public official B,' for 'performing official action in his capacity as PUCO Chairman to further FirstEnergy Corp.'s interests.' This Friday, FirstEnergy's former Senior Vice President, Dennis Chack will testify. He's the first of six high ranking officials who used to worked at FirstEnergy who will take the stand. Chack previously pled the Fifth, but has been granted immunity from prosecution to share information relevant to the case. Last week, U.S. Rep. Emilia Sykes, D-OH, joined six other lawmakers last week introducing what they're calling their 'End Corruption Now' agenda. The proposals include a lifetime ban on members of congress lobbying and requiring members put investments in a blind trust, among others. Sykes' Closing Bribery Loopholes Act zeroes in on the definition of an 'official act.' She pointed to charges against former Virginia Gov. Bob McDonnell, who accepted lavish gifts from a political donor. A federal district court convicted him of wire fraud among other charges and the appeals court affirmed the ruling. But in 2016, the U.S. Supreme Court overturned his conviction. 'The court ruled that those favors did not meet the very narrow definition of an official act under federal law,' Sykes argued. 'That decision blew a hole in anti-corruption safeguards and set precedent that made it easier for public officials to sell access, influence and prestige without facing any consequences.' She explained the issue is important to her in light of Ohio's recent history; Sykes was serving in the Ohio House at the time of HB 6's passage and voted against the bill. She argued Ohio 'had a lot of work to do' in the wake of the scandal that landed former Ohio House Speaker Larry Householder behind bars. Attorneys for Householder, Borges 'hopeful' following pardon for Cincinnati politician 'Unfortunately, that work has not started in the state house of Ohio,' Sykes argued, and so she's attempting to address the problem at the national level. Just two months ago, state lawmakers finally approved legislation eliminating the HB 6 rider propping up aging coal plants. More recently, the Senate's version of the state budget includes provisions allowing corporations and labor unions to make independent expenditures in political campaigns — like running ads for or against a given candidate. Unlike donating directly to a candidate's campaign, which is capped, independent expenditures have no upper limit. With the Senate's changes in place, the money FirstEnergy funneled to dark money groups controlled by Householder would be perfectly legal, so long as the expenditures were properly reported. 'Let me clear, when we allow public officials to use their power for personal gain and shield them from accountability, it undermines democracy itself,' Sykes insisted. 'This bill and the broader end corruption now agenda is about restoring public trust and ensuring that no one — no one — is above a law,' she said. 'Not a governor, not a president, not a Speaker of the House.' Follow Ohio Capital Journal Reporter Nick Evans on X or on Bluesky. 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Yahoo
03-06-2025
- Business
- Yahoo
State utility regulators preparing for Ohio House Bill 6 hearing
Natural gas meter with pipe on wall. Stock photo from Getty Images. Ohio utility regulators are gearing up for hearings on FirstEnergy's role in the House Bill 6 scandal. Former Ohio House Speaker Larry Householder is behind bars — although seeking a presidential pardon — for overseeing the largest corruption case in state history. FirstEnergy funneled about $60 million to a dark money group controlled by Householder. The former speaker used that money to secure his own leadership position and influence passage of HB 6. The measure propped up a pair of nuclear plants and aging coal facilities by tacking a rider onto consumers' monthly bills. But that's just the broad strokes. Nearly five years on from Householder's indictment, questions remain about how exactly the scheme unfolded and where FirstEnergy officials got the money for it. Half a dozen former FirstEnergy officials in government affairs and c-suite positions are set to testify in a PUCO hearing next week. Four of them previously pled the Fifth and have since received immunity from a Franklin County judge. At the heart of the case, the Ohio Consumers' Counsel wants to demonstrate whether FirstEnergy used the money it got from average consumers to bribe state officials. In January, former FirstEnergy executives Charles 'Chuck' Jones and Michael Dowling were indicted on federal racketeering charges. Last year, state officials filed more than 40 charges against the executives as well as the man they bribed, former PUCO chairman Sam Randazzo. Last week, a judge in Summit County dismissed theft charges against Jones and Dowling, but they still face several other state criminal charges. The PUCO proceedings focus on the employees one rung below Jones and Dowling, attempting to show how money moved in the scheme by gathering testimony from the foot soldiers who answered to FirstEnergy's leadership. Four of the witnesses previously refused to testify, citing their Fifth Amendment protections against self-incrimination. A Franklin County judge ordered them to testify and granted them 'the broadest possible immunity' from prosecution. Ohio indictments provide a better picture of squalid relationships that spurred massive scandal The PUCO will also hear from Steven Strah, the former CFO who took over FirstEnergy following Jones' ouster, and Robert Reffner, the company's chief legal officer at the time of the scandal. The Ohio Consumers' Counsel subpoenas argue consumers were wrongly charged more than $6.6 million, and another $7.4 million was incorrectly listed as a capital expenditure. Compelling testimony, the filings argue, 'will help establish how and why FirstEnergy improperly misallocated House Bill 6 costs to the FirstEnergy Utilities.' 'We look forward to getting answers for FirstEnergy consumers and holding FirstEnergy accountable,' Ohio Consumers' Counsel Maureen Willis said in a statement. 'Justice for FirstEnergy consumers is long overdue.' Just over a month ago, state lawmakers voted to put an end to the House Bill 6 rider tacked on to ratepayers' monthly bills. The legislation won't take effect until August. Democrats in the Ohio House, meanwhile, argue the door remains open for next House Bill 6. 'No law in Ohio prevented this scandal,' state Rep. Bride Rose Sweeney, D-Westlake, argued at a press conference last month. 'And since, not one law has even remotely been truly attempted to fix this massive injustice.' Sweeney, and state Reps. Chris Glassburn, D-North Olmsted, Dani Isaacsohn, D-Cincinnati, and Desiree Tims, D-Dayton, have filed bills that would require contribution disclosures to or so-called dark money groups, institute penalties for undermining signature gathering campaigns and bar companies that make contributions from receiving state contracts. The PUCO will hold a procedural hearing this morning, with the evidentiary portion of the case beginning next week, on June 10. The hearings themselves will likely take several days. Follow Ohio Capital Journal Reporter Nick Evans on X or on Bluesky. SUPPORT: YOU MAKE OUR WORK POSSIBLE
Associated Press
29-05-2025
- General
- Associated Press
Texas to expand how schools discipline students
Texas schools will be able to use harsher punishments to discipline students after the Texas Legislature passed a sweeping package on Wednesday — part of their efforts to stem student violence after the pandemic. 'Disruptions are impeding both the ability of teachers to teach and the ability of students to learn,' said state Sen. Charles Perry, R-Lubbock. House Bill 6 would extend how long schools can place students in in-school suspensions from three days to as long as they see appropriate. Principals would need to review the placement every 10 days. Students facing in-school suspension still complete schoolwork in a different classroom on school grounds. Because the bill would allow schools to use out-of-school suspensions to discipline all students when they engage in 'repeated and significant' classroom disruption or threaten the health and safety of other children, it would make it easier for schools to discipline students experiencing homelessness and the state's youngest students. That's because the bill would reverse state laws from 2017 and 2019 that put limitations on when and how those students could be disciplined. When schools do out an out-of-school suspension to students in kindergarten through third grade, they'll need to provide documentation of the students' disruptive behavior. Both chambers have approved the legislation — the Senate last week and the House last month. With the House's approval Wednesday of 19 Senate amendments to the bill, 114-19, it now heads to the governor. The legislation also amends when schools send students to alternative education settings, a strict environment that often leans on computer-based work and is in a different building. While students caught vaping were previously required to go to alternative education settings, schools can now give students caught with a vape device less severe consequences if it is their first offense. Schools can also teach students in alternative education programs remotely — a mode of instruction that was shown to contribute to learning loss during the COVID-19 pandemic. Perry, who shepherded the bill in the Senate, said the legislation was six years in the making. 'We've reached a crisis point where there's just some kids that absolutely are such a deterrent to the overall learning process that we have to find a better way,' Perry said on the Senate floor last week. 'With that, HB 6 found that balance. I like where we landed.' ___ This story was originally published by The Texas Tribune and distributed through a partnership with The Associated Press.
