Latest news with #darkmoney
Yahoo
3 days ago
- Business
- Yahoo
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. Julie Carr Smyth, The Associated Press Sign in to access your portfolio
The Independent
3 days ago
- Business
- The Independent
5 years after Ohio's $60M bribery scandal, critics say more could be done to prevent a repeat
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.
Associated Press
3 days ago
- Business
- Associated 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. '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.
The Guardian
01-07-2025
- Politics
- The Guardian
Kristi Noem failed to disclose $80,000 received while South Dakota governor
The US homeland security secretary, Kristi Noem, failed to disclose $80,000 that she accepted while serving as South Dakota's governor, according to a report published on Monday. The investigative news website ProPublica said tax records from 2023 show Noem was paid the sum by a group listed as American Resolve Policy Fund – but it has never made it on to her public ethics disclosures. Noem was paid for helping the group – which does not disclose its donors – to fundraise, but the non-profit, a so-called dark money group, went on to run social media attack ads targeting local news outlets that had reported on her alleged misuse of taxpayer funds while serving as governor. Noem, who was assigned a leading role in the immigration crackdown and related deportation efforts that Donald Trump has helmed since returning to the presidency in January, has developed a reputation for an opulent lifestyle. As South Dakota governor in 2021, on a salary of $130,000, Noem spent $68,000 installing a sauna, chandeliers and rugs in the governor's mansion, according to the Sioux Falls Argus Leader. She was sued in March 2024 by the consumer advocacy group Travelers United over a social media video promoting a dental practice named Smile Texas. The lawsuit alleges Noem failed to disclose any potential financial relationship with the Texas dental practice, and the Instagram video was not correctly labelled as an advertisement. More recently, Noem raised eyebrows when she wore a $50,000 gold Rolex Cosmograph Daytona watch while visiting El Salvador's Terrorism Confinement Center (Cecot), the prison that is holding alleged Tren de Aragua members deported from the US. Noem also made headlines when her Gucci handbag containing $3,000 in cash was stolen from a restaurant in Washington. ProPublica does not assert that Noem broke campaign finance laws in receiving the payment from American Resolve Policy Fund. Lawmakers helping non-profits and other political groups fundraise is not uncommon. But it is not common practice to be rewarded for doing so. 'There's no way the governor is supposed to have a private side business that the public doesn't know about,' Lee Schoenbeck, a longtime Republican attorney and lawmaker, told ProPublica. 'It would clearly not be appropriate.' The Associated Press reported in March that while Noem campaigned for Trump as South Dakota governor, the state picked up some expenses. That included trips to Palm Beach, Florida, from where Trump was then managing his victorious 2024 presidential campaign. The outlet reported that over her six years as governor, South Dakota covered more than $640,000 in travel-related costs incurred by the governor's office – including a $7,555 air fare for a six-day trip to Paris to speak at a political event – and costs associated with a bear hunt in Canada with her niece. Those expenses, reported on by the Dakota Scout, incensed some members of her party. Dennis Daugaard, a former Republican South Dakota governor, said the cost to taxpayers in service of raising her national profile 'offends a lot of people'. Taffy Howard, a Republican state senator who sparred with Noem over her expenses, said it 'seems like an incredible amount of money'. But the AP cautioned that there was 'no indication' that the former governor had broken any laws by having the state foot her security expenses. 'Unfortunately, bad guys tend to make threats against high-profile public officials,' Noem's then spokesperson, Tim Murtaugh, said. 'When it was a political or personal trip, she paid for her own travel out of her political or personal funds.' The latest questions concerning Noem's relationship with American Resolve Policy Fund, a group that describes its mission as 'fighting to preserve America for the next generation', reflect how some quarters may view personal brand-building, via product marketing opportunities, as part of a contemporary political career. Trump, for one, has fostered that approach. In a statement to Politico, Noem's lawyer, Trevor Stanley, said that the former South Dakota governor 'fully complied with the letter and the spirit of the law'. Stanley said the US office of government ethics, which processes disclosure forms for federal officials, 'analyzed and cleared her financial information in regards to this entity'. According to ProPublica, Stanley claimed Noem 'fully disclosed all of her income on public documents that are readily available' but did not respond to further questioning.
The Guardian
01-07-2025
- Politics
- The Guardian
Kristi Noem failed to disclose $80,000 received while South Dakota governor
The US homeland security secretary, Kristi Noem, failed to disclose $80,000 that she accepted while serving as South Dakota's governor, according to a report published on Monday. The investigative news website ProPublica said that tax records from 2023 show Noem was paid the sum by a group listed as American Resolve Policy Fund – but it has never made it on to her public ethics disclosures. Noem was paid for helping the group – which does not disclose its donors – to fundraise, but the non-profit, a so-called dark money group, went on to run social media attack ads targeting local news outlets that had reported on her alleged misuse of taxpayer funds while serving as governor. The homeland security secretary, who was assigned a leading role in the immigration crackdown and related deportation efforts that Donald Trump has helmed since returning to the presidency in January, has developed a reputation for an opulent lifestyle. As South Dakota governor in 2021, on a salary of $130,000, Noem spent $68,000 installing a sauna, chandeliers and rugs in the governor's mansion, according to the Sioux Falls Argus Leader. She was sued in March 2024 by the consumer advocacy group Travelers United over a social media video promoting a dental practice named Smile Texas. The lawsuit alleges Noem failed to disclose any potential financial relationship with the Texas dental practice, and the Instagram video was not correctly labelled as an advertisement. More recently, Noem raised eyebrows when she wore a gold, $50,000 Rolex Cosmograph Daytona watch while visiting El Salvador's Terrorism Confinement Center (Cecot), the prison that is holding alleged Tren de Aragua members deported from the US. Noem also made headlines when her Gucci handbag containing $3,000 in cash was stolen from a Washington DC restaurant. ProPublica does not assert that Noem broke campaign finance laws in receiving the payment from American Resolve Policy Fund. Lawmakers helping non-profits and other political groups fundraise is not uncommon. But it is not common practice to be rewarded for doing so. 'There's no way the governor is supposed to have a private side business that the public doesn't know about,' Lee Schoenbeck, a longtime Republican attorney and lawmaker, told ProPublica. 'It would clearly not be appropriate.' The Associated Press reported in March that while Noem campaigned for Trump as South Dakota governor, the state picked up some expenses. That included trips to Palm Beach, Florida, from where Trump was then managing his victorious 2024 presidential campaign. The outlet reported that over her six years as governor, South Dakota covered more than $640,000 in travel-related costs incurred by the governor's office – including a $7,555 air fare for a six-day trip to Paris to speak at a political event – and costs associated with a bear hunt in Canada with her niece. Those expenses, reported on by the Dakota Scout, incensed some members of her party. Dennis Daugaard, a former Republican South Dakota governor, said that the costs to taxpayers in service of raising her national profile 'offends a lot of people'. Taffy Howard, a Republican state senator who sparred with Noem over her expenses, said it 'seems like an incredible amount of money'. But the AP cautioned that there was 'no indication' that the former governor had broken any laws by having the state foot her security expenses. 'Unfortunately, bad guys tend to make threats against high-profile public officials,' Noem's then spokesperson, Tim Murtaugh, said. 'When it was a political or personal trip, she paid for her own travel out of her political or personal funds.' The latest questions concerning Noem's relationship with American Resolve Policy Fund, a group that describes its mission as 'fighting to preserve America for the next generation', reflect how some quarters may view personal brand-building, via product marketing opportunities, as part of a contemporary political career. Trump, for one, has fostered that approach. In a statement to Politico, Noem's lawyer, Trevor Stanley, said that the former South Dakota governor 'fully complied with the letter and the spirit of the law'. Stanley said that the US office of government ethics, which processes disclosure forms for federal officials, 'analyzed and cleared her financial information in regards to this entity'. According to ProPublica, Stanley claimed that Noem 'fully disclosed all of her income on public documents that are readily available' but did not respond to further questioning.
