U.S. Attorney: FirstEnergy admits bribing public officials

The Justice Department announced on Thursday that FirstEnergy Corporation has agreed to pay a $230 million penalty after being charged with conspiring to commit honest services wire fraud.

The U.S. Attorney’s Office said that the utility has signed a deferred prosecution agreement that could potentially result in the dismissal of the charge.

The charge and agreement stem from the U.S. Attorney’s Office’s public corruption investigation.

According to court filings, FirstEnergy admits it conspired with unnamed public officials and others to pay millions of dollars in exchange for specific official action for FirstEnergy Corp.’s benefit.

FirstEnergy Corp. acknowledged that it paid millions of dollars to an elected state public official through the official’s alleged charitable arm in return for the official pursuing nuclear legislation for FirstEnergy Corp.’s benefit.

In addition to admitting an effort to conceal the effort, the U.S. Attorney says FirstEnergy paid $4.3 million dollars so a second unnamed public official would act on behalf of First Energy’s efforts to obtain passage of nuclear legislation and other company priorities.

Under the deferred prosecution agreement, FirstEnergy must continue to cooperate fully with the government’s investigation.

FirstEnergy has sixty days to pay $115 million to the United States and $115 million to the Ohio Development Service Agency’s Percentage of Income Payment Plus Plan, a program that provides assistance to Ohioans in paying their regulated utility bills.

Other terms in the agreement include publicly disclosing on its website any FirstEnergy Corp. contributions to entities operating for the benefit of a public official.

FirstEnergy released the following statement admitting the misconduct:

“FirstEnergy’s Board of Directors moved swiftly and decisively to investigate this matter
and, along with the management team, has cooperated and will continue to fully cooperate
with the U.S. Attorney’s Office that is investigating the matter,” said Donald T. Misheff,
nonexecutive chairman of FirstEnergy’s board of directors. “This resolution and the actions we
have agreed to implement build on the substantial steps we have taken over the past several
months to strengthen our leadership team, ensure we have a best-in-class compliance
program, and significantly modify our approach to political engagement as we work to regain
the trust of our stakeholders. We thank the office of the United States Attorney for the
Southern District of Ohio for its professionalism and engagement with FirstEnergy throughout
this process.”

“FirstEnergy’s core values and behaviors include integrity, openness, and trust. As an
organization, we are redoubling our commitment to live up to these values and the standards that we know our stakeholders expect of us,” said Steven E. Strah, FirstEnergy president and
chief executive officer. “Moving forward, we are intently focused on fostering a strong culture
of compliance and ethics, starting at the top, and ensuring we have robust processes in place to
prevent the type of misconduct that occurred in the past.”

It was a year ago that former Ohio House Speaker Larry Householder and four associates were implicated in an alleged $60 million bribery scheme that resulted in racketeering charges and his expulsion from the legislature.

At the center of the scandal is a House bill that included a $1 billion bailout for two nuclear power plants operated by FirstEnergy.

According to the Associated Press, a criminal complaint said the conspiracy to pass the bill had partial roots on a flight FirstEnergy provided to Householder and his son to Donald Trump’s January 2017 inauguration.

Following the trip, FirstEnergy began gave $1 million to Generation Now, controlled by Householder.

Prosecutors said the money was used to elect Householder-backed candidates and win him the speaker’s position.

Governor Mike Dwine signed the so-named Ohio Clean Air Program in July 2019, followed by FirstEnergy’s expenditure of millions to halt a referendum attempt that would have repealed the program.

Ohio lawmakers have since rescinded the nuclear bailout, but some of the bill’s provisions remain.