The Political Fallout from FirstEnergy's Deal with the Feds
FirstEnergy will pay a $230 million fine in a plea deal with federal prosecutors in the federal investigation into the $1.6 billion bailout for Ohio’s two nuclear energy plants. But some are saying state leaders have not done enough to prevent back room dealing that can lead to scandals like this.
FirstEnergy Corp’s plea comes in the $61 million bribery case in which prosecutors say former Speaker Larry Householder (R-Glenford) and the other defendants used FirstEnergy money to pass the bailout known as House Bill 6. FirstEnergy’s former subsidiary owned the power plants.
But some say the deal underscores the need to look further.
“We should not look at this as a one off," says Catherine Turcer of Common Cause Ohio.
Turcer points out a string of scandals involving charter schools, payday lending and Coingate…the questionable investments made involving Bureau of Workers Compensation funds in 2005. And she says this latest scandal shows the need for something she’s been clamoring for for years – disclosure of who’s donating money and where.
“If we don’t create greater transparency, we are just going to end up where we started. We are just going to have scandal after embarrassing scandal after embarrassing scandal. And that means we need to actually create greater transparency so that our elected officials are accountable to everyday Ohioans, to the voters, rather than wealthy special interests," Turcer says.
Bruce Weston is with the Ohio Consumers Counsel, the agency charged with representing consumers. He agrees transparency is needed.
“Justice is a longer road and that road should lead to state reforms. Reforms that curb the utilities political influence," Weston says.
And Weston says it’s utility customers who end up paying the price.
The Acting U.S. Attorney for the Southern District, Vipal Patel, says transparency in this case was difficult because FirstEnergy and others involved in the scandal made use of those dark money groups.
“This effort would not have been possible both in the nature and money provided without the use of 501(c)4s. These are supposed to be, according to code, social welfare organizations. Right? Social welfare organizations. Do you all see a lot of social welfare going on? I don’t," Patel says.
As part of this agreement, Patel says FirstEnergy will make its 501(c)4 donations transparent to the public. But that’s only for this calendar year on – not for the past couple of years when the wrongdoing is alleged to have taken place.
Use of 501(c)4s is defended by attorneys for Householder, who was expelled from the House last month. They said the money that went to Generation Now, a non-profit entity that fought a potential repeal of the bailout, were political contributions protected by the First Amendment. Householder has maintained his innocence.
The agreement also shows FirstEnergy paid $4 million to a public official thought to be the former head of the Public Utilities Commission, Sam Randazzo. His house was raided last year and he resigned, but has not been charged with any crimes.
Gov. Mike DeWine, who appointed Randazzo as PUCO chair, said in a written statement if Randazzo has done something improper, DeWine didn’t know about it.
“It’s time for him to tell the people of Ohio what he knew about First Energy and when he knew it," says Dayton Mayor Nan Whaley.
Whaley is running in the Democratic primary to challenge DeWine’s re-election next year. She’s made stopping public corruption part of her platform by requiring more transparency.
“We have to root this out. It requires action. And frankly, since nobody is willing to do anything because they have all benefitted from this corrupt system, it’s time for fresh leadership," Whaley says.
Controversy surrounding HB 6 was oscillating like a fan on a hot summer day during the 2020 election, yet few politicians were put on the hot seat over it.
And as Common Cause’s Turcer points out, previous legislation to increase accountability has been put on the back burner. So it’s questionable what impact, if any, this issue will have in the minds of voters next fall.
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