Facing federal charges, FirstEnergy agrees to pay $230 million fine

Ohio News

CINCINNATI (WCMH) — FirstEnergy has agreed to pay a $230 million fine in connection with federal charges it is facing out of last year’s House Bill 6 bribery scandal.

According to Vipal J. Patel, Acting United States Attorney for the Southern District of Ohio, FirstEnergy has agreed to pay the fine as part of a deferred prosecution agreement. The company is still facing charges of conspiring to commit honest services wire fraud.

“They first and foremost have to continue doing what they’ve been doing and that’s cooperating with the government in its investigation,” said Patel.

The $230 million dollars paid by FirstEnergy will go to the federal government and to a fund that helps Ohioans pay their utility bills.

“That’s the largest criminal penalty ever collected as far as anyone can recall in the history of this office,” said Patel.

Thursday’s court filings state that FirstEnergy, an Akron-based public utility holding company, admits it conspired with public officials and other individuals and entities to pay millions of dollars to public officials in exchange for specific official action for FirstEnergy’s benefit. The public officials in the agreement include former House speaker Larry Householder and former PUCO chairman Sam Randazzo.

Gov. Mike DeWine appointed Randazzo and said in a statement, “If, as stated in the court documents, Sam Randazzo committed acts to improperly benefit First Energy, his motives were not known by me or my staff.”

Five people have been charged in the scandal, including Householder, who was expelled from office in June. Also accused are former Republican Party state chairman Matt Borges; lobbyist Neil Clark, who has since died by suicide; and political operatives Juan Cespedes and Jeffrey Longstreth, both of whom pleaded guilty to racketeering conspiracy charges.

Householder and Borges have maintained their innocence. All are accused in the $61 million bribery scandal to pass legislation to bail out two nuclear power plants operated by a former subsidiary of FirstEnergy.

The release from Patel reads, “FirstEnergy Corp. acknowledged in the deferred prosecution agreement that it paid millions of dollars to an elected state public official [and] that it paid $4.3 million dollars to a second public official.”

The charge and agreement stem from the U.S. Attorney’s Office’s ongoing public corruption prosecutions. Vipal says FirstEnergy has cooperated with the government, and according to the deferred prosecution agreement, it must continue to cooperate in this and related investigations, among other obligations.

Other obligations include:

  • Within 60 days of Thursday’s filing, FirstEnergy Corp. must pay $115 million to the United States and $115 million to the Ohio Development Service Agency’s Percentage of Income Payment Plus Plan, a program that provides assistance to Ohioans in paying their regulated utility bills.
  • Publicly disclosing on its website any FirstEnergy Corp. contributions to 501(c)(4) entities and entities known by FirstEnergy Corp. to be operating for the benefit of a public official, either directly or indirectly, and making various provisions to improve corporate compliance moving forward.

Patel declined to answer any questions about other cases or investigations but did say “this case has its tentacles in the entire state of Ohio.”

FirstEnergy released a statement from President and Chief Executive Officer Steven Strah in regards to the charges:

FirstEnergy’s core values and behaviors include integrity, openness, and trust. As an organization, we are redoubling our commitment to live up to these values and the standards that we know our stakeholders expect of us. Moving forward, we are intently focused on fostering a strong culture of compliance and ethics, starting at the top, and ensuring we have robust processes in place to prevent the type of misconduct that occurred in the past.

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