Ohio Attorney General Dave Yost has agreed to a settlement in the state’s largest-ever bribery and money-laundering scandal with the giant utility company that bankrolled it.
The settlement amount of just $20 million represents less than one-third of the bribes paid by Akron-based FirstEnergy and is dwarfed by the benefits Ohio utilities have received from residents as a result of the corrupt legislation that was paid for with those bribes.
Yost’s office is sending regular press releases, but this did not apply to Monday’s settlement, which was first reported by Cincinnati Enquirerquoting SEC filing by FirstEnergy.
In response to questions, his office said Yost “voluntarily recused himself from the case several months ago to avoid any suggestion that the case was politically motivated or that its outcome was influenced by politics or political decision-making,” but did not explain how.
The announcement 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 taxpayer bailout package, most of which went to FirstEnergy.
Yost’s office added that the company had cooperated with the state’s prosecution of two former executives and that the company had undergone reform since the scandal.
“A non-prosecution agreement signed between FirstEnergy, the Ohio Attorney General’s Office and the Summit County District Attorney’s Office requires FirstEnergy to provide evidence, access to witnesses and testimony in ongoing criminal cases against (former CEO) Chuck Jones and (former Vice President) Michael Dowling, as well as in civil proceedings related to the passage of” the bailout corruption law, spokesman Steve Irwin said in an email.
By agreeing to the pact, FirstEnergy will not be charged with a crime. The company paid the federal government $230 million in 2021 to dismiss the criminal charges in this case.
By dropping the charges, state and federal governments allowed FirstEnergy to avoid a major financial hit. Consultants told the company it could face almost $4 billion in fines if he is charged, the Cleveland Plain Dealer reported Tuesday.
According to weeks of testimony in federal court in Cincinnati last year, FirstEnergy executives began courting Larry Householder and other state leaders in delayed 2016. The executives bet heavily on coal and nuclear generation, which was losing money, because they failed to anticipate that the fracking boom would make gas-fired electricity cheaper.
So the executives — CEO Jones and Vice President Dowling — began a frantic search for a way to save the company.
They funneled $61 million in corporate money into 501(c)(4) shadow finance groups. From there, the money went to elect cordial Republicans who would vote to appoint Householder as Speaker of the Ohio House of Representatives in early 2019.
From this perch, Householder oversaw the corrupt bailout package, House Bill 6.
Sam Randazzo, Gov. Mike DeWine’s choice 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 Randazzo a $4.3 million bribe that committed suicide in April.
DeWine, whose administration had several high-ranking officials tied to FirstEnergy, signed the bill the same day it passed. But it immediately faced opposition from a fierce campaign to repeal the bailout.
FirstEnergy executives — who are now under state indictment — were so concerned about the repeal attempt that they put up $36 million to stop it. The result was a campaign that included false, xenophobic TV ads, intimidation of people collecting signatures for the repeal of the law, and even accusations of assault.
Yost gave HB 6 supporters a lot of support in the heat of the fight to repeal it.
Before repeal could go on the ballot, supporters had to collect 1,000 valid signatures from registered voters and submit a vote tally to the attorney general. Yost had to approve that before repeal supporters could begin collecting the necessary 265,000 additional voter signatures. And they had just 90 days to do so after DeWine signed the corrupt bailout package into law on July 23, 2019.
The tally and 1,000 signatures were submitted in 10 days. But then Yost rejected the first-round ballot text. When they submitted different text and more signatures—and Yost approved them—the time to collect more than a quarter million signatures was shortened by 40 percent, and the repeal failed.
Although Yost, who hopes to become governor in 2026, has not commented on his behavior during that time, some conspirators have.
During last year’s trial, federal prosecutors presented messages between former Ohio Republican Party Chairman Matt Borges, who is serving a five-year prison sentence for his role in the crime, and Juan Cespedes, who has pleaded guilty.
In one, Borges said the attorney general told him he thought the bailout was bad law, but he didn’t say so publicly to do a favor to Borges and FirstEnergy. Yost “We would be at the forefront (of the opposition) if it weren’t for (FirstEnergy’s) support and your commitment,” Borges allegedly quoted Yost as saying.
In another, Borges — who managed some of Yost’s previous campaigns — said of the repeal summary:If the law allows him to reject this language, he will do so..”
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 undertake reforms to strengthen its internal ethics programs, increase transparency and promote reporting of questionable conduct by its employees and management,” Irwin said. “It has also restructured its board and management to remove those responsible for the conduct that led to the House Bill 6 scandal. This is an important step in holding accountable for their crimes the disgraced corporate leaders who used their positions of power to betray FirstEnergy taxpayers, employees and the people of Ohio.”
But institutional investors are in court, arguing that FirstEnergy is trying to limit the scope of the scandal. They accuse the company of trying to shield other executives and board members who may have been guilty — or at least may have known about it.
Indeed, the company has fought tooth and nail to keep the internal investigation it ordered in the wake of the scandal from being handed over. After an attempt to appeal the handover order was denied, the company filed a risky motion for a writ of mandamus on July 30.
After the HB 6 scandal broke in 2020, Yost made a donation $24,000 in donations from FirstEnergy and Cespedes to charity. The question remains when he will explain what he knew and did in the scandal that imprisoned Householder for 20 years and led to two suicides — including the suicide of the accused lobbyist Neil Clark.
Meanwhile, taxpayers continue to pay large bucks as a result of HB 6. Its provisions, which benefited FirstEnergy alone, were repealed after the scandal erupted. But the state has refused to repeal the rest of the law.
It contains an agent that has paid so far 343,000,000 dollars to subsidize two aging coal-fired power plants owned by a group of Ohio utilities. One isn’t even in Ohio.
