Plaintiffs in a civil lawsuit tied to a massive corruption and money laundering scandal have subpoenaed Ohio Gov. Mike DeWine and scheduled a deposition with Lt. Gov. Jon Husted.
There have been four convictions in the scandal so far, and U.S. Attorney Kenneth L. Parker said the investigation is continuing. There is no indication that DeWine or Husted are the subject of it.
Still, members of the DeWine-Husted administration played significant roles in the scandal, and DeWine’s nominee to head the Ohio Public Utilities Commission could be a target of the investigation.
The document and testimony requests are part of a class action lawsuit filed by huge investors in Akron-based FirstEnergy against the company over its role in the scheme. Between 2017 and 2020, the company paid over $60 million in taxpayer bailout worth $1.3 billion whose primary purpose was to maintain power at two failing nuclear power plants in northern Ohio.
Those already sentenced include former inmates from Ohio House Speaker Larry HouseholderR-Glenford, who was sentenced to 20 years in prison for his role in what federal authorities say may have been the largest corruption and money-laundering scheme in Ohio history. Former state Republican Party Chairman Matt Borges in June he was sentenced to five years in prison for his role.
However, other people who played a significant role in the scandal have not yet been charged.
They include former FirstEnergy CEO Chuck Jones and former Vice President Michael Dowling, who used money to get Householder elected speaker in 2018 and then pass and protect House Bill 6, the corrupt bailout legislation. They also include Sam Randazzo, DeWine’s first nominee to head the Public Utilities Commission of Ohio.
Jones, Dowling and Randazzo deny wrongdoing, but in a deferred prosecution agreement, FirstEnergy said Jones and Dowling paid Randazzo a $4.3 million bribe when DeWine was selecting Randazzo to be FirstEnergy’s chief regulator. In that post, Randazzo helped write the corrupt bailout bill and he helped FirstEnergy avoid a scheduled audit known as the “rates case”, which was due to be presented in 2024.
Big investors like pension funds and mutual funds are suing FirstEnergy over the scandal, arguing that the company violated securities laws by failing to disclose its reckless conduct. Then, when federal officials were arrested in July 2020, the value of the stock plummeted — and so did their investments.
Plaintiffs in the civil case have been fighting with Randazzo (who is not a defendant) since April over whether he complied with a judge’s order to produce documents relating to $4.3 million he received from FirstEnergy just before the company’s regulation began.
The investigating judge and the court expert in the case have consistently criticized Randazzo for not cooperating more fully, the latest case came last week. Randazzo appealed to the top of the food chain, asking U.S. Magistrate Judge Kimberly Jolson not to bind him to a discovery order issued by special counsel Shawn K. Judge.
The plaintiffs in the civil case have asked Jolson to force Randazzo to comply with a judge’s order to cough up more information. As part of their lawsuit, they have provided a schedule of depositions they have planned or are in the process of planning. To prepare for them, they could probably apply the information and documents they are seeking from Randazzo.
One of the scheduled hearings involves Randazzo himself, with a “hearing date” set for March 4-29.
Another involves Husted, the lieutenant governor, whose term is set to run from Feb. 28 to March 19. Dave Anderson of the Energy and Policy Institute first drew attention to the document listing Husted’s testimony.
Hayley Carducci, a spokeswoman for Husted, said Tuesday that Husted was cooperating.
“We are aware of the investor’s civil lawsuit against First Energy,” she said in an email. “The Lt. Governor has already released public records regarding this matter, and we will continue to comply as we have in the past. There is no new information to release.”
Like Randazzo, Husted is not a defendant in the civil case.
DeWine also recently received a subpoena to produce documents in a civil case.
“We’re reviewing it with an attorney to see what can be provided,” spokesman Dan Tierney said in an interview. “Our office is subject to the Public Records Act, and in some ways this is no different.”
Tierney noted the difference between a class action lawsuit, the case in which Householder and Borges have already been convicted, and proceedings in which others can be charged.
“This is a civil case, and anyone has the right to file a civil case if they want to,” Tierney said of the proceeding that subpoenaed the governor’s documents. “A civil lawsuit is one where people say they’ve been wronged and want the court to award them damages. That’s very different than a criminal case where the federal government says public integrity rights have been violated.”
He added: “What still remains a criminal case is the fact that no one from our office or the lieutenant governor’s office was questioned, subpoenaed, or had any of those types of legal documents filed.”
Even without such requests, DeWine and his administration were complicit in crafting and passing the corrupt utility bailout in several ways:
- He nominated Randazzo to head the PUCO a day after it was publicly disclosed that FirstEnergy paid a group controlled by Randazzo millions of dollars for years. “I forced DeWine/Husted to do battlefield triage,” Jones, FirstEnergy’s CEO, said in a text message to Dowling. “It’s a brutal game.”
- While still a FirstEnergy lobbyist, Dan McCarthy founded Partners for Progress, a 501(c)(4) “dark money” group through which Jones, Dowling and others pumped millions into the conspiracyDeWine hired McCarthy as legislative director and kept him in the job for a year after Householder and the others were arrested.
- HB 6, the rescue bill, was highly controversial because Householder pushed it through the Legislature, other lawmakers at his trial testified. Still, DeWine signed it the day it passed, and when Householder was arrested, the governor’s first move was to uphold the law — and parts of it still are. DeWine changed his mind a day later, calling for repeal and replace subsidies.
Morgan Trau assisted in the preparation of this report.
