Two former executives of Akron-based FirstEnergy and former Ohio Public Utilities Commission Chairman Sam Randazzo have been charged with 27 criminal violations in connection with the House Bill 6 scandal.
Two former executives of Akron-based FirstEnergy and former Ohio Public Utilities Commission Chairman Sam Randazzo were indicted Friday in a statewide scandal that benefited the powerful utility with at the expense of Ohio taxpayers.
The executives, former CEO Chuck Jones and former Senior Vice President of External Affairs Michael Dowling, were indicted for the first time in connection with a wide-ranging pay-to-play scandal that has already led to former President of the Ohio House, Larry Householder, to the federal government. prison for 20 years.
Ohio Attorney General Dave Yost announced the charges, which include corrupt activity, during a news conference Monday. He detailed how Randazzo, appointed by Gov. Mike DeWine, betrayed his customers and Ohioans in favor of FirstEnergy and its executives, who paid millions to officials. Randazzo has repeatedly denied any wrongdoing.
And for the first time since the scandal broke in 2020, those accused of paying bribes could face convictions.
Ohio House Bill 6 Corruption Case: Who is Chuck Jones?
“There can be no justice without holding check writers and masterminds accountable,” Yost said Monday. “Shout it from the public square to the boardrooms, from Wall Street to Broad and High: those who perversely seek to twist government for their private ends risk the destruction of everything they worked for. »
Dowling, Jones and Randazzo were secretly charged Friday in Summit County in Akron. The men’s lawyers told Yost their clients would turn themselves in Monday morning, but that did not happen. “They didn’t keep that promise and I guess I’m not surprised that they didn’t keep that promise either,” Yost said. Their arraignments are set for Tuesday afternoon.
It’s not yet clear what Monday’s announcement means for an ongoing federal investigation into corruption at the Ohio Statehouse that led to the conviction of Householder and others. “Today’s announcement was strictly related to the state’s charges. We will continue to do our job to seek justice,” said U.S. Attorney for the Southern District of Ohio Ken Parker.
What was the plan for House Bill 6?
Randazzo is accused of working for FirstEnergy at the expense of Ohio ratepayers and its rightful customer: Industrial Energy Users-Ohio, a trade association of large energy users trying to lower their bills.
Randazzo worked as a consultant for FirstEnergy between 2013 and January 2019. In this role, Randazzo made millions by lobbying top lawmakers to benefit FirstEnergy. One of those payments was $4.3 million that FirstEnergy paid to Randazzo in January 2019, shortly before DeWine named Randazzo to head the Ohio Public Utilities Commission.
“This was no gift: Randazzo would work hard for FirstEnergy in government,” Assistant Attorney General Carol O’Brien wrote in the indictment.
As president of PUCO, Randazzo helped FirstEnergy in several ways. He helped craft House Bill 6, which would have provided a bailout of more than $1 billion to two nuclear power plants then owned by a subsidiary of FirstEnergy. Randazzo also delayed a rate case that could have reduced FirstEnergy’s profits and he helped add a budget provision called decoupling that would have helped the company weather a recession.
Jones and Dowling worked with Randazzo and benefited financially from Randazzo’s assistance in the form of boosting FirstEnergy’s stock prices, according to the indictment.
“Chuck Jones and Michael Dowling worked with Mr. Randazzo to subvert state government in ways that greatly enriched themselves,” said Assistant Attorney General Carol O’Brien. “The ultimate betrayal of its legitimate customers and, frankly, of the citizens of the State of Ohio was FirstEnergy’s payment of $4.3 million to Sam Randazzo as he sought appointment to the Commission of Ohio Utilities. The money was paid for a specific purpose: to influence Mr. Randazzo in the exercise of his functions as president of the PUCO.
Randazzo is also accused of embezzling money from his client, Industrial Energy Users-Ohio. The indictment alleges that Randazzo funneled money from a settlement between FirstEnergy and IEU-Ohio to two shell companies and took a cut of the proceeds.
Federal investigators recently accused Randazzo of accepting money from FirstEnergy to help the company in its role as a utility regulator. Randazzo has pleaded not guilty and is awaiting trial.
What are the fees?
Randazzo was indicted on 22 counts, including:
- One count of engaging in a pattern of corrupt activity, a first-degree felony.
- One count of grand theft, a first-degree felony.
- Two counts of aggravated robbery, a second-degree felony.
- One count of bribery, a third-degree felony.
- Three counts of telecommunications fraud, a first-degree misdemeanor.
- Eight counts of money laundering, a third-degree felony.
- Six counts of falsifying records, a third-degree felony.
Jones and Dowling were each charged with:
- Once charged with engaging in a pattern of corrupt activity, a first-degree felony.
- Two counts of aggravated theft of $1.5 million or more, a first-degree felony.
- One count of bribery, a third-degree felony.
- Two counts of telecommunications fraud, a first-degree felony.
- Four counts of money laundering, a third-degree felony.
Dowling was also charged with two counts of falsifying records, each a third-degree felony. Randazzo’s two “shell” companies – Sustainability Funding Alliance of Ohio and IEU-Ohio Administration – also faced criminal charges.
What is the link with the parliamentary bulletin?
A separate federal investigation led to a 20-year prison sentence for Householder and a five-year sentence for former Ohio Republican Party Chairman Matt Borges. They were convicted as part of a massive pay-to-play scheme that involved Akron-based FirstEnergy financing Householder’s return to power in exchange for House Bill 6, which included a nuclear bailout of more than a billion dollars.
Previous coverage: What you need to know about the Ohio corruption scandal and Larry Householder’s conviction
Three other people were charged along with Householder and Borges. Two of them pleaded guilty, agreed to cooperate with the investigation and are now awaiting sentencing. The third, lobbyist Neil Clark, committed suicide in 2021.
Yost was subpoenaed to testify in that trial, but ultimately was not called to the witness stand.
As the federal case unfolded, Yost’s Ohio Organized Crime Investigation Commission investigated whether anyone had also violated state law. On an investor call Friday, FirstEnergy officials said they had cooperated with the investigation and had nothing new to report on the matter.
Yost also filed a civil suit against FirstEnergy and others shortly after the FBI arrests in 2020. That case was recently put on hold due to ongoing criminal investigations.
Who are Chuck Jones, Michael Dowling?
FirstEnergy fired Jones, Dowling and fellow senior vice president Dennis Chack in October 2020 following an internal investigation into the state scandal.
Jones, an Akron native, joined Ohio Edison as a substation engineer in 1978 and was named CEO in January 2015. Dowling rose through the ranks at Akron-based FirstEnergy Corp., starting in the engineering department. communications in 1986 and becoming senior vice president. before being fired in October 2020.
Case of House Bill 6: Who is Michael Dowling and what criminal offenses does he face?
Householder’s trial revealed how Jones and Dowling coordinated with the top lawmaker to pass the nuclear bailout. The two also met with Randazzo at his German Village condominium shortly before Randazzo became president of PUCO.
FirstEnergy has reshuffled its board and several executives since the scandal broke in 2020. The company agreed to pay a $230 million fine as part of a 2021 deferred prosecution agreement, in which FirstEnergy admitted to bribing Householder and Randazzo and agreed to contribute to the ongoing federal trial. probe.
“FirstEnergy has taken important steps moving forward, including rebuilding our leadership team and instilling a culture of ethics, integrity and accountability at all levels of the organization,” the company said Monday. FirstEnergy spokesperson Jennifer Young.
Read the indictment here:
Stephanie Warsmith of the Akron Beacon Journal contributed to this story.
Jessie Balmert is a reporter for the Ohio bureau of the USA TODAY Network, which serves the Columbus Dispatch, the Cincinnati Enquirer, the Akron Beacon Journal and 18 other affiliated news organizations in Ohio..