Ohio Utility Agrees to Pay $312 Million for Role in Massive Bribery Scandal

Ohio Utility Agrees to Pay $312 Million for Role in Massive Bribery Scandal
Photo: Stephanie Keith, Getty Images

FirstEnergy, a powerful Ohio-based utility company, has agreed to pay a $US230 ($312) million fine for its role in a truly wild corruption scandal.

On Thursday, acting U.S. Attorney Vipal Patel said the fine is the “largest criminal penalty ever collected, as far as anyone can recall, in the history of this office.” Half of FirstEnergy’s penalty will be paid to the Treasury, and the remaining $US115 ($156) million will fund a statewide program to assist Ohio residents in paying their utility bills.

It comes after the utility company allegedly paid $US60 ($81) million to key Republican officials between 2017 and 2020, including then-Ohio House Speaker Larry Householder — whose seat the utility essentially secured — and his aides. In exchange for these massive sums, the officials allegedly shepherded a 2019 bill known as House Bill 6 through to passage, which included a $US1.3 ($2) billion ratepayer-funded bailout package for two of FirstEnergy’s power plants. (The company has since become Energy Harbour.) The legislation also gutted the state’s mandates for energy efficiency and renewable energy, and it would have cost every Ohio electricity customer, including homeowners, businesses, and even industrial plants, a total of $US170 ($231) million a year in extra surcharges. It’s a wild story and much of it is chronicled in this book by Leah Stokes, a political scientist at the University of California, Santa Barbara.

In one of the wildest parts of the bribery scheme, FirstEnergy admitted that it funneled bribes to dark money groups, including $US59 ($80) million to a nonprofit organisation called Generation Now. Householder expressly formed the 501(c)(4) group to receive millions of dollars in bribes. The Justice Department alleged that Householder took $US500,000 ($678,500) of that money for his own personal use.

For all of this, federal prosecutors charged FirstEnergy with one count of “conspiracy to commit honest services wire fraud,” including conspiring to “defraud the public of its right to the honest services of a public official through bribery or kickbacks.”

The monster fine comes one year after the FBI arrested Householder and four others on charges of racketeering. In October 2020, two of the five elected officials arrested on corruption charges pleaded guilty, and in February, Generation Now pleaded guilty to one count of racketeering, too. Other officials are disputing the allegations, including Householder, who continues to insist that he did nothing wrong (which lol). Ohio Gov. Mike DeWine, who reporting shows solicited donations from FirstEnergy for his gubernatorial campaigns, also claims he had nothing to do with any of this.

Thankfully, last month, the Ohio House expelled Householder from the state legislature. State lawmakers are also calling to repeal House Bill 6, which passed in July 2019 but includes provisions that have not yet gone into effect. DeWine said in the wake of the scandal that he supports repealing it as well. In March, Ohio officials passed legislation officially repealing key parts of the bill, including the $US1.3 ($2) billion financial bailout of FirstEnergy’s two power plants.

But the state isn’t finished screwing around with horrendously misguided climate policy. On Thursday, the very same day that FirstEnergy acknowledged its role in this scandal, DeWine signed a law allowing local governments to pass resolutions banning large wind and solar developments or block renewable projects in certain parts of their counties.

Earlier this month, Ohio also passed a law prohibiting municipalities from banning customers from using natural gas, following in the footsteps of more than 15 other states that have passed similar bills. Emails obtained through public records requests by the Energy and Policy Institute show that these pieces of legislation were designed by the utility trade group Energy Solutions Centre. But of course, lawmakers who have introduced and backed them haven’t been particularly forthcoming about that. Unlike the giant FirstEnergy scandal, that may all be legal, but that doesn’t make it any less shady or dangerous.