COLUMBUS — The state's utility regulator on Wednesday put its internal investigations into the $61 million FirstEnergy bribery scandal on hold at the request of federal prosecutors who fear they could interfere with their own.
The Public Utilities Commission of Ohio unanimously agreed to U.S. Attorney Kenneth Parker's request to halt depositions and discovery in connection with the scheme that led to the 2019 passage of a $1 billion customer bailout of two Lake Erie nuclear power plants. At the time, the plants were owned by a subsidiary of Akron-based FirstEnergy Corp.
“This is a temporary stay,” said PUCO Chairman Jenifer French, a former judge appointed by Gov. Mike DeWine, a Republican. “The PUCO will continue with our investigations into these four cases when it is appropriate to do so.”
Former Ohio House Speaker Larry Householder and lobbyist and former Ohio Republican Party Chairman Matt Borges face trial as soon as January on federal racketeering charges.
Akron-based FirstEnergy Corp. entered into a deferred prosecution agreement, essentially a plea deal, in which it said it bribed Mr. Householder and former PUCO Chairman Sam Randazzo to pass House Bill 6 and to get its way on other issues pending with the commission that affect its profits.
Mr. Randazzo has denied wrongdoing and has not been charged, but he resigned in 2020 after the FBI raided his home.
FirstEnergy has said that a $4.3 million payment ending Mr. Randazzo's contract as a utility consultant as he was being appointed chairman of the powerful panel by Mr. DeWine was, in fact, a bribe.
“... The United States believes that continued discovery in the PUCO proceedings may directly interfere with or impede the United States' ongoing investigation,” Mr. Parker's motion said. “For that reason, the United States respectfully requests that PUCO stay the PUCO proceedings for a period of six months from the date of this letter (Aug. 15).”
He noted that it could ask for another extension beyond six months.
Two other individuals, Householder ally Jeff Longstreth and Columbus lobbyist Juan Cespedes, and the non-profit corporation used as a conduit for FirstEnergy's money have already pleaded guilty to their roles and are cooperating with prosecutors. A fifth individual defendant, powerful Columbus lobbyist Neil Clark, committed suicide in Florida last year.
Depositions were under way when, initially, FirstEnergy, asked them to be halted last month.
During the deposition of the company's former chief ethics officer, Ebony Yeboah-Amankwah, the utility argued that questioning about Mr. Randazzo from the Ohio Consumers' Counsel and others were getting too close to the utility's deferred prosecution agreement.
The consumers' counsel represents residential customers before the PUCO.
“We respect the investigation of the U.S. Department of Justice into the FirstEnergy scandals involving House Bill 6 and the PUCO’s former chairman,” said the counsel’s spokesman, J.P. Blackwood. “Of course, the PUCO also has a responsibility to protect the 2 million utility consumers of FirstEnergy from any harm resulting from the scandals. Accordingly, in the balance of public interests, any interruption of the investigations that we sought and have actively pursued for consumers for two years at the PUCO should be minimized.”
Among other things, the PUCO is looking at FirstEnergy's political spending and whether it kept its corporate interests separate from those of its affiliates.
“My preference in a vacuum would be to continue to move forward to conclusions of our investigations, but we are not operating in a vacuum...,” said Commissioner Daniel Conway, a 2017 appointee of then-Gov. John Kasich, a Republican.
“We have the (Department of Justice's) parallel and overlapping criminal investigation and proceeding...,” Mr. Conway said. “I believe that we must not create through our efforts material risks to the ongoing criminal investigation and proceeding. The prosecutor and the assistant U.S. attorney has determined that we are at that point.”
In addition to admitting its role in the scheme and cooperating with prosecutors, FirstEnergy agreed to pay a record $230 million penalty.
Ultimately, lawmakers repealed the nuclear bailout portion of House Bill 6. but the law's customer-paid subsidies for two 1950s-era coal-fired plants in southern Ohio and southeastern Indiana remain on the books. The plants are owned by a consortium of utilities with the largest share held by American Electric Power.
First Published August 24, 2022, 6:14 p.m.
