The U.S. Attorney for the Southern District of Ohio announced on Thursday that FirstEnergy, the energy company at the center of a public corruption investigation, was charged federally with conspiring to commit honest services wire fraud and has agreed to pay a $230 million monetary penalty.
“The company signed a deferred prosecution agreement that could potentially result in dismissal of the charge,” the statement released by the Department of Justice said:
The charge and agreement stem from the U.S. Attorney’s Office’s ongoing public corruption prosecutions. In today’s court filings, FirstEnergy Corp., an Akron, Ohio-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 Corp.’s benefit.
FirstEnergy Corp. acknowledged in the deferred prosecution agreement that it paid millions of dollars to an elected state public official through the official’s alleged 501(c)(4) in return for the official pursuing nuclear legislation for FirstEnergy Corp.’s benefit.
The company also acknowledged that it used 501(c)(4) entities, including one it controlled, to further the scheme because it allowed certain FirstEnergy Corp. executives and co-conspirators to conceal from the public the nature, source and control of payments.
FirstEnergy Corp. further acknowledged that it paid $4.3 million dollars to a second public official. In return, the individual acted in their official capacity to further First Energy Corp.’s interests related to passage of nuclear legislation and other company priorities.
“Vipal J. Patel, Acting United States Attorney for the Southern District of Ohio, and Chris Hoffman, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division, announced the charge and agreement,” the statement added.
Several prominent Ohio politicians, including now former Speaker of Ohio House Larry Householder, were arrested in July 2020 and charged by the same US Attorney’s offices with crimes stemming from the FirstEnergy investigation.
The Ohio Speaker of the House was arrested this morning and charged in a federal racketeering conspiracy involving approximately $60 million paid to a 501(c)(4) entity to pass and uphold a billion-dollar nuclear plant bailout.
It is alleged that Larry Householder, 61, of Glenford, Ohio, and the enterprise conspired to violate the racketeering statute through honest services wire fraud, receipt of millions of dollars in bribes and money laundering.
Four other individuals were also arrested and charged. They include:
Mathew Borges, 48, of Bexley, a lobbyist who previously served as chair of the Ohio Republican Party;
Jeffrey Longstreth, 44, of Columbus, Householder’s longtime campaign and political strategist;
Neil Clark, 67, of Columbus, a lobbyist who owns and operates Grant Street Consultants and previously served as budget director for the Ohio Republican Caucus; and
Juan Cespedes, 40, of Columbus, a multi-client lobbyist.
Generation Now, a corporate entity registered as a 501(c)(4) social welfare organization, was also charged.
“The 49-page agreement details how FirstEnergy bought key Ohio public officials – notably former Ohio House Speaker Larry Householder and former Public Utilities Commission of Ohio Chairman Sam Randazzo – with millions of dollars funneled through dark money groups to turn a profit using Ohio ratepayers’ pocketbooks,” The Cincinnati Enquirer reported:
Between 2017 and March 2020, FirstEnergy Corp. and FirstEnergy Solutions, now called Energy Harbor, donated $59 million to Generation Now, a dark money group controlled by Householder.
FirstEnergy paid for Householder’s return to power in the Ohio House of Representatives, helped him pass House Bill 6 to bail out the nuclear plants and bankrolled the ballot initiative that would have stalled the law. FirstEnergy also donated $2 million to Householder’s effort to expand term limits, potentially giving him 16 more years in power.
A FirstEnergy executive said Householder’s continued presence “extends and stabilizes existing leadership – good for the home team.”
Householder’s attorneys, in a statement, maintained that FirstEnergy’s donations were not bribes or illicit payments but rather legal donations protected by the First Amendment. The company entered into Thursday’s agreement to protect its share price.
The Ohio Star will provide updates as the story develops.