Watchdog subpoenas FirstEnergy info on payment to regulator

Business News

CLEVELAND (AP) — Ohio’s consumer utility watchdog is demanding that FirstEnergy Corp. share more information about $4.3 million that was paid to an attorney to end his consulting contract shortly before he became the state’s top utility regulator.

Akron-based FirstEnergy disclosed that payment in the wake of allegations about a $60 million bribery scheme involving a subsidiary. Ohio Consumers’ Counsel Bruce Weston issued subpoenas through the Public Utilities Commission of Ohio late last week for more information about the payment.

FirstEnergy Service Company and the FirstEnergy Foundation also received subpoenas. In addition to the consulting contract, Weston and his agency are seeking information about the company’s charitable giving and documents related to an internal investigation by FirstEnergy’s Board of Directors that resulted in the dismissal of its CEO and other top executives.

The subpoenas say FirstEnergy must provide the documents by July 19.

“Utilities have undue influence in Ohio,” Weston said Friday in a statement. “The public has a right to know how their state government, including the PUCO, is regulating these powerful utilities such as FirstEnergy.”

FirstEnergy spokesperson Jennifer Young declined to comment, citing ongoing investigations of the company.

FirstEnergy officials have said it’s cooperating in investigations of what authorities allege was a $60 million bribery scheme to win legislative approval in 2019 for a $1 billion bailout for two unprofitable nuclear power plants then operated by a wholly-owned FirstEnergy subsidiary.

In the wake of those allegations, FirstEnergy disclosed in U.S. Securities and Exchange Commission filings that company executives paid attorney Sam Randazzo $4.3 million in January 2019 to end a purported consulting contract. Republican Gov. Mike DeWine appointed Randazzo chair of the utilities commission weeks later.

The commission is responsible for setting rates paid by electric and natural gas customers in Ohio, giving Randazzo, a longtime utility attorney and lobbyist, an outsized role at the agency.

Randazzo resigned in November 2020 after FBI agents searched his Columbus townhome and FirstEnergy disclosed in an SEC filing that month that former executives had violated the company’s policies and code of conduct when they paid Randazzo millions to end a consulting contract in place since 2013.

The company disclosed in February that its internal investigation found that “payments under the consulting agreement may have been for purposes other than those represented.”

Randazzo declined to comment about the subpoenas or allegations on Friday. He hasn’t been charged.

FirstEnergy has been negotiating a deferred prosecution agreement with the U.S. Department of Justice.

Federal authorities say the alleged bribery scheme was masterminded by then-House Speaker Larry Householder, a Republican who has since been expelled from the House.

He and four of his associates were indicted on federal racketeering charges. Householder has pleaded not guilty.

The GOP-led Ohio Legislature voted to repeal the bailout at the center of the alleged scheme after the new owner of the nuclear plants indicated it no longer wanted the money.

The company, Energy Harbor, took ownership of the plants in February 2020 as part of a deal made in U.S. Bankruptcy Court.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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