Facing federal charges, FirstEnergy agrees to pay $230 million fine

Ohio

CINCINNATI (WCMH) — FirstEnergy has agreed to pay a $230 million fine in connection with federal charges it is facing out of last year’s House Bill 6 bribery scandal.

According to a release from Vipal J. Patel, Acting United States Attorney for the Southern District of Ohio, FirstEnergy has agreed to pay the fine as part of a deferred prosecution agreement. The company is still facing charges of conspiring to commit honest services wire fraud.

Thursday’s court filings state that FirstEnergy, an Akron-based public utility holding company, admits it conspired with public officials and other individuals and entities to pay millions of dollars to public officials in exchange for specific official action for FirstEnergy’s benefit.

Five people have been charged in the scandal, including Larry Householder, the former Ohio House Speaker who was expelled from office in June.

Also accused are former Republican Party state chairman Matt Borges; lobbyist Neil Clark, who has since died by suicide; and political operatives Juan Cespedes and Jeffrey Longstreth, both of whom pleaded guilty to racketeering conspiracy charges.

Householder and Borges have maintained their innocence. All are accused in the $61 million bribery scandal to pass legislation to bail out two nuclear power plants operated by a former subsidiary of FirstEnergy.

The release from Vipal reads, “FirstEnergy Corp. acknowledged in the deferred prosecution agreement that it paid millions of dollars to an elected state public official [and] that it paid $4.3 million dollars to a second public official.”

Watch the full news conference with Vipal below.

The charge and agreement stem from the U.S. Attorney’s Office’s ongoing public corruption prosecutions. Vipal says FirstEnergy has cooperated with the government, and according to the deferred prosecution agreement, it must continue to cooperate in this and related investigations, among other obligations.

Other obligations include:

  • Within 60 days of Thursday’s filing, FirstEnergy Corp. must 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.
  • Publicly disclosing on its website any FirstEnergy Corp. contributions to 501(c)(4) entities and entities known by FirstEnergy Corp. to be operating for the benefit of a public official, either directly or indirectly, and making various provisions to improve corporate compliance moving forward.

FirstEnergy released a statement from President and Chief Executive Officer Steven Strah in regards to the charges:

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. 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.

Governor Mike DeWine sent out an official statement Thursday evening in regards to accusations leveled at former PUCO Chairman Sam Randazzo:

Below is a statement by Governor Mike DeWine on documents released today by the U.S. Attorney for the Southern District of Ohio regarding First Energy and former PUCO Chairman Sam Randazzo.

As I have consistently said, we understood that Sam Randazzo had worked for manufacturing companies, energy companies, and consumers, and that he had done work for First Energy.   Sam Randazzo was a well-known subject-matter expert in energy issues.

If, as stated in the court documents, Sam Randazzo committed acts to improperly benefit First Energy, his motives were not known by me or my staff.

In light of today’s admission by First Energy, the campaign will make a monetary donation to the Boys and Girls Clubs in the amount First Energy contributed to the campaign committee.

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