After two former Republican officials were convicted in June of participating in a massive extortion conspiracy, U.S. Attorney Kenneth Parker said the investigation was continuing. There were at least two signs last week that the probe could intensify.
Former Ohio House of Representatives Speaker Larry Householder was sentenced to 20 years in federal prison on June 29, and former state Republican Party Chairman Matt Borges was sentenced to five years a day later. Both played roles in the scandal in which Akron-based FirstEnergy and other utilities paid more than $61 million to push through a $1.3 billion taxpayer bailout that was largely intended for a subsidiary that FirstEnergy spun off that owns two nuclear plants in northern Ohio.
In addition to Householder and Borges, two other people arrested in July 2020 pleaded guilty, and a third person committed suicide.
But on March 10, just after the jury convicted Householder and Borges, a reporter asked Parker the obvious question: What about the people who paid the bribes? Will they be charged? Parker would say only that the investigation was continuing.
Attorneys for the men who held top executive positions at FirstEnergy at the time of the conspiracy — former CEO Chuck Jones and former Vice President Michael Dowling — have already said in court documents that they believe Federal investigators are looking at their clients.
Two more pieces of evidence emerged this month that federal investigators are considering further criminal charges in connection with the bribery and money laundering scandal.
On Aug. 4, Hilary M. Williams, who represents FirstEnergy, filed a lawsuit as part of a massive class-action lawsuit against the company over the bailout scandal. She told dozens of pension and investment fund lawyers suing the company that they are not the only ones who want to see emails and text messages sent by FirstEnergy executives during the bribery scheme.
“Mr. Counsel… we confirmed this morning that we can disclose to the parties that certain government entities have requested the entire contents of the iPad and iPhone devices used by Mr. Jones or Mr. Dowling between January 1, 2016 and December 31, 2020,” Williams wrote. “Consistent with protocol in this matter, these documents will be made available to all parties and we expect to do so at approximately the same time that they are made available to the requesting government entities.”
She added. “Mr. Dowling and Mr. Jones used more than a dozen devices during the relevant period, and processing and reviewing the contents of those devices requires significant processing time, followed by time for reviewing for confidentiality and privilege. We are working to complete the review as soon as possible and expect these productions to be made on or about September 15, 2023.”
A spokeswoman for the U.S. attorney’s office would not comment on whether the “government entities” Williams referred to worked for Parker, whose office prosecuted Householder and Borges.
However, last week, Parker sent a letter to the Ohio Public Utilities Commission asking the regulator to further delay its investigation into the extortion scandal.
“The PUCO proceeding involves matters related to an investigation by the United States Department of Justice, and the United States believes that further disclosure of information in the PUCO proceeding may directly interfere with or impede the United States’ ongoing investigation,” the letter reads. “Therefore, the United States respectfully requests that the PUCO suspend the PUCO proceeding for a period of six months from the date of this letter. The United States reserves the right to request an extension of the suspension after that time.”
Among those the feds may investigate are Jones, Dowling and Sam Randazzo, whom Gov. Mike DeWine nominated to be PUCO chairman in early 2019.
In a deferred prosecution agreement, FirstEnergy said it paid Randazzo a $4.3 million bribe just before his nomination in exchange for favors the regulator allegedly did for the company. Randazzo denies wrongdoing, but Householder’s trial witnesses testified that Randazzo played key role in developing a law on rescuing victims of corruption.
The plaintiffs in the class action lawsuit filed earlier this month SMS and e-mails between Jones, Dowling and Randazzo. They indicate that the three met at Randazzo’s Columbus apartment in December 2018 and agreed to pay the future regulator $4.3 million, making it clear they expected something in return. They also appear to indicate that in addition to working on the bailout, Randazzo helped exempt FirstEnergy from a 2024 rate review that the company was required to undergo.
The class action plaintiffs accuse FirstEnergy of violating securities laws by concealing its illegal conduct from investors. Last week, they filed a transcript of a phone call from July 23, 2020 — days after Householder, Borges and three others were arrested in connection with the extortion conspiracy — in which Jones apparently misled analysts about his role and that of his company in the conspiracy.
“I believe FirstEnergy has acted appropriately in this matter, and we intend to cooperate fully with the investigation to, among other things, ensure that our company and our role in supporting House Bill 6 are understood as accurately as possible,” said Jones, who was fired months later. “In the meantime, we wanted to share our initial perspective on this matter and reinforce the values that guide our company.”
Jones also claimed that he and his subordinates were held to “the highest standards of conduct.”
“This is a serious and disturbing situation,” he said. “Ethical behavior and maintaining the highest standards of conduct are core values for the FirstEnergy family and me personally. These high standards have strengthened the trust of our employees, customers and the financial community. We strive to apply these standards in all of our business dealings, including our participation in the political process.”
Jones sat to testify in the class action lawsuit in July. Last week, U.S. District Judge Kimberly Jolson ordered Dowling to testify in October.
