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San Francisco Chronicle
2 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
2 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
07-06-2025
- Yahoo
Traffic ticket text scam impacts Tennesseans
NASHVILLE, Tenn. (WKRN) — The Tennessee Highway Patrol is warning Tennesseans about a new traffic ticket text scam being sent throughout the Volunteer State. The text claims the recipient has an outstanding traffic ticket, and if they don't pay, they will be reported, have their driving privileges revoked, and be sued. The message also includes a link to send the payment. 'It looks very similar to the Tennessee Department of Safety and Homeland Security website, but it is a false website; it is not a correct website. It is strictly designed to try to trick you away from your money,' Lt. Bill Miller with the THP said. 📧 Have breaking news come to you: → The text has been distributed to multiple Tennesseans, including the CEO and president of the BBB of Middle Tennessee. 'I personally received four in 24 hours,' Robyn Householder, CEO and president of the BBB of Middle Tennessee, said. There are a few tell-tale signs the text is a trap, including the fact that it claims it's from the Department of Motor Vehicles, which isn't an agency in the state of Tennessee. Householder also told News 2 to pay attention to how the text is worded. 'Scammers are notorious for spelling things incorrectly or using really poor grammar or only capturing a portion of a company name, so we like to refer to that as scammer grammar,' Householder said. In addition, a governmental agency will never send a warning through a text, nor will the agency use an aggressive tone to pressure the recipient to quickly act. 'Government agencies are not going to lead with threatening you. They're not going to lead with harassing language that creates a space where you think you have to act now,' Householder said. 'That's never going to be the case with a legitimate agency.' ⏩ The BBB said those who receive the text should tap the delete and report as junk option on their phone. In addition, Tennesseans can report texts and other scams to the BBB's scam tracker by clicking here. If you're a victim of this scam, click here for next steps. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
05-06-2025
- Business
- Yahoo
WV Legislature may be called for PEIA special session in July
The Public Employees Insurance Agency is proposing increasing premiums by 14% for state employees and by 16% for local government employees during the 2026 fiscal year. (Lori Kersey | West Virginia Watch) While West Virginia employees prepare for their health insurance to take up more of their paychecks this summer, a special session may be coming in July — the same month those increases take effect — to deal with ongoing cost and sustainability challenges at the Public Employees Insurance Agency. At the finance board's regular meeting Thursday, Chairman Eric Householder said the agency has been working with Gov. Patrick Morrisey's office as he prepares to call the special legislative session. 'I know currently … we are working providing data to the governor,' Householder said. 'There's been no decision on what to do, just providing data, having roundtable discussions. That's all we're doing right now.' Householder said Morrisey tentatively intends to call a special session for PEIA in mid July. Beginning in July, PEIA premiums are increasing by 14% for state employees and by 16% for local government employees. Out-of-pocket and copay costs will also go up. The agency will also raise premiums by 12% for retirees. PEIA leaders have said that the rising cost of health care — particularly inflation on prescription GLP-1 drugs that treat obesity and diabetes — are a major driver of the rate increases. Union leaders and state employees have repeatedly called on the Legislature to come up with a solution to PEIA's rising costs, but the issue largely went unaddressed during the 2025 regular session. Morrisey said in April that he plans to call a special session for PEIA, but he has not said how exactly the issue of increasing costs will be addressed.. 'That was kicked down the road for many, many years,' the governor said in April. 'I don't intend to kick it down the road. We have to bring everyone together, all the stakeholders: listen, learn and then you'll be seeing some activity.' In a news release Thursday, leadership from the West Virginia Democratic Party blamed Morrisey for 'falling to act' and letting 'devastating' PEIA increases go into effect. 'Pay-Cut Patrick failed to take action to stabilize PEIA premiums,' Democratic Party Chair Mike Pushkin said in the statement. 'So now, state employees, including law enforcement officers, school teachers, school service personnel, CPS workers, and retirees will soon be paying a price for his inaction. Morrisey had a choice — he could have fought to protect working West Virginians. Instead, he did what he always does: protect his political donors and let working families bear the burden.' In an email Thursday, Morrisey spokesman Drew Galang said the governor has emphasized that the state 'must address the inherited challenges facing PEIA and its long term sustainability.' He said Morrisey had 'already indicated' that a special session to do so would occur in 'mid to late July.' Galang did not respond to an email asking to clarify when, publicly, the July timeframe had been set by Morrisey and no such references to it have been made clear in previous PEIA meetings or announcements prior to Thursday. A spokeswoman for the House of Delegates and one for the state Senate said the governor has not formally told lawmakers the special session will be in July. Dale Lee, president of the West Virginia Education Association, told Householder the discussions about PEIA solutions should include public employees and their representatives. 'The employees can't be the ones providing all of this,' Lee said of the cost increases. 'We have to have the Legislature. There has to be not only the Legislature but also the providers. That's why I continue to ask that we all go back to the table and that we come up with a plan that people can agree on.' Lee, who has repeatedly criticized state leaders for failing to act on the recommendations of a task force called by former Gov. Jim Justice after statewide teacher strikes in 2018 and 2019, said it's important that the Legislature act upon a plan for PEIA this time. '[It] never even got on a committee agenda,' he said of the recommendations. 'That's just disingenuous.'
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
