The following article was originally published in the Ohio Capital Journal and published on News5Cleveland.com under a content-sharing agreement.
Ohio Attorney General Dave Yost has agreed to settle the largest bribery and money laundering scandal in state history with the massive utility that funded it.
At just $20 million, the settlement amounts only to less than a third of the bribes Akron-based FirstEnergy paid and it is dwarfed by the benefits Ohio utilities have received from Ohioans as a consequence of the corrupt legislation those bribes paid for.
Yost’s office sends out frequent press releases, but not one regarding Monday’s settlement, which was first reported by the Cincinnati Enquirer, citing an SEC filing by FirstEnergy.
In response to questions, his office said Yost had “voluntarily walled himself off from the case months ago to avoid any suggestion that the case was politically driven or any outcome was influenced by politics or political decision making.” But it didn’t explain how.
The statement comes after more than a year of questions about the attorney general’s own involvement in the fight to pass and protect the $1.3 billion ratepayer bailout that mostly went to FirstEnergy.
Yost’s office added that the company was cooperating in state prosecutions of two former executives, and that the company had reformed in the years since the scandal.
“The non-prosecution agreement signed between FirstEnergy, the Ohio Attorney General’s Office and the Office of the Summit County Prosecuting Attorney requires FirstEnergy to provide evidence, access to witnesses and testimony in the ongoing criminal cases against (former CEO) Chuck Jones and (former Vice President) Michael Dowling, as well as in civil proceeding relating to the passage of” the corrupt bailout bill, spokesman Steve Irwin said in an email.
By agreeing to the pact, FirstEnergy won’t be charged criminally. The company paid the federal government $230 million in 2021 to get criminal charges dropped in that instance.
In dropping the charges, the state and federal governments allowed FirstEnergy to dodge a big financial hit. Consultants told the company it could face nearly $4 billion in fines if indicted, the Cleveland Plain Dealer reported Tuesday.
According to weeks of testimony in federal court in Cincinnati last year, FirstEnergy executives began wooing Larry Householder and other state leaders in late 2016. The executives had bet heavily on coal and nuclear generation that was losing money because they failed to anticipate that the fracking boom would make gas-fired electricity generation cheaper.
So the executives — CEO Jones and Vice President Dowling — undertook a frantic search for a bailout.
They flooded $61 million in corporate money into 501(c)(4) dark money groups. From there, the money went to elect friendly Republicans who would vote to make Householder speaker of the Ohio House at the start of 2019.
From that perch, Householder shepherded the corrupt bailout, House Bill 6.
Sam Randazzo, Gov. Mike DeWine’s pick to chair the Public Utilities Commission, helped write and lobby for the bailout even though he was supposed to be a neutral regulator.
FirstEnergy later said it paid a $4.3 million bribe to Randazzo, who died by suicide in April.
RELATED: Ex-PUCO chairman Sam Randazzo, indicted in corruption scheme, dies by 'suspected suicide'
DeWine, whose administration had several senior officials connected to FirstEnergy, signed the bill the same day that it passed. But it ran into instant opposition in the form of a fierce campaign to repeal the bailout.
The FirstEnergy executives — who are now under state indictment — were so alarmed at the repeal effort that they put up $36 million to stop it. The resulting campaign included false, xenophobic TV commercials, bullying people gathering signatures to put a repeal on the ballot and even allegations of assault.
Yost gave HB 6 supporters a big assist in the heat of the repeal fight.
Before a repeal could go on the ballot, supporters had to gather 1,000 valid signatures from registered voters and submit a ballot summary to the attorney general. Yost had to approve that before repeal advocates could start gathering the necessary 265,000 additional voter signatures. And they had just 90 days after DeWine signed the corrupt bailout on July 23, 2019 to do it.
The summary and 1,000 signatures were submitted within 10 days. But then Yost rejected the ballot language on the first go-round. By the time they had submitted different language and more signatures — and Yost approved it — their time to gather more than a quarter-million signatures had been cut by 40% and the repeal failed.
While Yost — a hopeful to become governor in 2026 — hasn’t commented on his conduct during this period, some of the conspirators did.
During last year’s trial, federal prosecutors presented messages between former Ohio GOP Chairman Matt Borges, who is serving a five-year prison sentence for his involvement, to Juan Cespedes, who has pleaded guilty to his.
In one, Borges said the attorney general told him that he thought the bailout was a bad law, but he wasn’t speaking publicly as a favor to Borges and FirstEnergy. Yost “‘would be out front (in opposition) if not for (FirstEnergy) support and your involvement,’” Borges quoted Yost as supposedly saying.
In another, Borges — who had run some of Yost’s past campaigns — said of the repeal summary, “If there’s any way the law will allow him to reject the language, he will do it.”
Irwin, Yost’s spokesman, justified the settlement by saying FirstEnergy had reformed.
“FirstEnergy today is not the company it was five years ago – the corporation has undertaken, and continues to undergo, reforms to strengthen its internal ethics programs, to increase transparency, and promote reporting of questionable conduct by its employees and leadership,” Irwin said. “It has also restructured its board and leadership to remove the individuals responsible for the conduct that gave rise to the House Bill 6 scandal. This is an important step in bringing the disgraced corporate leaders who used their positions of power to betray FirstEnergy’s ratepayers and employees and the people of Ohio to account for their crimes.”
However, institutional investors are in court arguing that FirstEnergy is trying to limit the blast radius of the scandal. They accuse the company of trying to protect other executives and board members who might have been culpable — or at least might have known of the scheme.
Indeed, the company is battling furiously not to turn over an internal investigation it commissioned in the wake of the scandal. After being denied an attempt to appeal an order to turn it over, the company filed a risky petition for a writ of mandamus on July 30.
After the HB 6 scandal broke in 2020, Yost donated $24,000 in contributions from FirstEnergy and Cespedes to charity. It’s an open question when he’ll explain what he knew and did in a scandal that imprisoned Householder for 20 years and led to two suicides — including that of indicted lobbyist Neil Clark.
Meanwhile, ratepayers are still paying big money as a consequence of HB 6. Its provisions solely benefitting FirstEnergy were repealed after the scandal broke. But the state’s leadership has refused to repeal the rest of the bill.
It includes a measure that has so far paid $343,000,000 to subsidize two aging coal plants owned by a group of Ohio utilities. One’s not even in Ohio.
