FirstEnergy admits payments, adds $230M fine in Ohio nuclear bailout bribery prosecution

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Staff and Wire Reports

Ohio-based utility holding company FirstEnergy Corp. has entered into a deferred prosecution agreement with the U.S. Department of Justice over its bribery scandal to bolster the state’s legislation to subsidize the company’s conventional power plants.

First Energy was charged with conspiracy in the alleged scheme, agreed to cooperate with prosecutors and also pay a $230 million fine. The $60 million House Bill 6 scandal alleged that utility leaders bribed state officials, including former House Speaker Larry Householder and former Public Utilities Commission Chairman Samuel Randazzo, according to reports.

In addition, FirstEnergy released a statement on its website detailing some elements of its actions.

“Central to FirstEnergy Corp.’s effort to influence the legislative process in Ohio was the use of 501(c)(4) corporate entities. FirstEnergy Corp. used the 501(c)(4) corporate form as a mechanism to conceal payments for the benefit of public officials and in return for official action,” the company statement reads.

“FirstEnergy Corp. used 501(c)(4) entities in this way because the law does not require disclosure of donors to a 501(c)(4) and there is no ceiling that limits the amount of expenditures that can be paid to a 501(c)(4) entity for the purpose of influencing the legislative process. This effort would not have been possible, both in the nature and volume of money provided, without the use of a 501(c)(4) entity.”

The nuclear bailout bill allowed FirstEnergy’s utilities in the state to receive guaranteed amounts equal to 2018 revenues. Ohio Gov. Mike Dewine later signed a bill repealing the legislation, while Householder and others were arrested last year for allegedly taking bribes.

FirstEnergy stopped collecting the revenue guarantee starting in February to settle a lawsuit with Republican Ohio Attorney General David Yost. The company also refunded a portion of that revenue back to customers.

Federal prosecutors claim “Team Householder” used money secretly funneled from FirstEnergy to win passage of House Bill 6, which provided $1 billion to rescue two nuclear plants operated by a then-FirstEnergy subsidiary, according to an Associated Press report earlier this year.

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