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Ohio Utility Settles for $230 Million After Bribing State Officials

July 23, 2021 by Tom Ramstack

Electric utility company FirstEnergy Corp. agreed to settle a Justice Department complaint Thursday by paying $230 million to avoid a federal wire fraud conspiracy charge.

Company officials admitted they conspired with former Ohio House Speaker Larry Householder to pay millions of dollars to his political nonprofit organization if he would promote a bill that benefits the company’s nuclear power plants.

Paying the money into Householder’s nonprofit was intended to conceal the payments, according to the Justice Department. The money was part of $60 million FirstEnergy is accused of paying to at least three state officials.

Householder left his speaker of the House job under political pressure and was indicted in July 2020. He is awaiting trial.

FirstEnergy also admitted paying $4.3 million to Sam Randazzo, the former chairman of Ohio’s Public Utilities Commission. The money was allegedly laundered through Randazzo’s consulting company.

He resigned in November amid suspicions of his involvement in the bribery scheme.

Although Householder pleaded not guilty, two other defendants and a pro-Householder political action committee have pleaded guilty to corruption charges. 

The dispute centered on Ohio House Bill 6, which included a provision for a $1.3 billion ratepayer-funded bailout of two struggling nuclear plants owned at the time by a FirstEnergy subsidiary. The subsidies would have come from fees added to Ohioans’ electric bills.

The state legislature approved H.B. 6 in 2019. They repealed the subsidy provision in March of this year.

It fell under immediate public criticism after it was passed, which included a citizens group sponsoring a statewide ballot referendum to repeal the bill.

In response, FirstEnergy wired additional money to Householder’s political nonprofit to defeat the referendum, according to federal prosecutors. The second round of bribes followed the initial payment for Householder’s pressure campaign on state officials to approve the bill, the Justice Department says.

The two nuclear power plants formerly affiliated with FirstEnergy serve about six million customers in seven states. The two plants were described as “money-losing Ohio nuclear plants” in court documents.

H.B. 6 granted a $160 million a year subsidy to the former FirstEnergy subsidiary, FirstEnergy Solutions, to avoid closure of the plants. The subsidiary emerged from bankruptcy in February 2020.

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