FirstEnergy ordered to pay $100 million for its role in Ohio bribery scheme
(AP) – Akron-based FirstEnergy Corp., entangled in a $60 million bribery scandal, has been slapped with a $100 million civil penalty by the U.S. Securities and Exchange Commission (SEC) for misleading investors about its involvement in the corruption scheme.
The SEC’s cease and desist order reveals that FirstEnergy violated antifraud provisions by concealing its role in the scandal and failing to disclose related payments. According to the SEC, the company’s former CEO misrepresented its involvement through deceptive statements in a news release and during a July 2020 earnings call.
This recent action follows FirstEnergy’s agreement last month to pay $20 million to avoid criminal charges as part of a settlement with state prosecutors. The bribery scandal, which led to a significant prison sentence for a former Ohio House speaker, involved FirstEnergy’s efforts to secure a $1 billion bailout for two affiliated nuclear plants and to protect the bill from repeal efforts.
FirstEnergy President and CEO Brian Tierney expressed relief at reaching a settlement with the SEC. The company is required to pay the penalty within 14 days to avoid accruing interest charges.
In connection with the investigation, two former FirstEnergy executives, Chuck Jones (former CEO) and Michael Dowling (former Senior Vice President), were indicted in April. Both were terminated in October 2020 for breaching company policies and conduct codes. They have denied any wrongdoing.
Sam Randazzo, former chair of the Public Utilities Commission of Ohio and another individual charged, pleaded not guilty in federal and state courts before his death by suicide at age 74 in April.
Former Ohio House Speaker Larry Householder was sentenced to 20 years in June 2023 for orchestrating the scheme. Lobbyist Matt Borges, a former chair of the Ohio Republican Party, received a five-year sentence.
Federal prosecutors revealed that the $60 million in secretly funded FirstEnergy cash was used to elect Householder’s preferred Republican candidates in 2018 and to secure his speakership in January 2019. This money facilitated the passage of the controversial energy bill and supported efforts to prevent a repeal referendum from making it to the ballot.
FirstEnergy had previously admitted to its role in the bribery scheme in a July 2021 deferred prosecution agreement with the U.S. Department of Justice. The company agreed to pay $230 million in penalties and implement extensive reforms within three years to avoid federal conspiracy charges.
