Attorneys: Ex-CEO of Utility planned Ohio payments

Attorneys representing investors in FirstEnergy Corp. said Wednesday that the former chief executive of utility giant FirstEnergy Corp. and a top officer orchestrated payments to public officials in an alleged $60m bribery schemeto secure a legislative bailout for Ohio's two nuclear plants.

Attorneys: Ex-CEO of Utility planned Ohio payments

Under a federal judge's order, the two attorneys wrote in a court record that Chuck Jones, former CEO of FirstEnergy, and Michael Dowling, senior vice president, were responsible for the company.

FirstEnergy fired Jones and Dowling in October 2020 after they violated the company's codes of conduct and policies. This was three months after federal investigators had arrested one of Ohio’s most powerful politicians in the largest corruption scandal in state history.

The firings of the executives implied that the scheme was approved at the top levels of the company. However, this is the first public link between FirstEnergy executives and the arrangement of the payments.

The attorneys stated in an affidavit that "discovery would have proven at trial that two senior executives from FirstEnergy devised, orchestrated FirstEnergy’s payments to public officials for favorable legislation or regulatory action."

They also stated that Jones and Dowling "vehemently denied" having acted improperly.

Both have not been charged criminally in the investigation. Jones long maintained that he didn't do anything wrong. Their attorneys received messages seeking comment.

Initial objections were made by the attorneys to revealing the names during a March hearing. They claimed that public disclosure could cause harm to FirstEnergy, its criminal and civil cases.

The order was based on a settlement proposed by shareholders for FirstEnergy of lawsuits against top executives and board members. This settlement stemmed from allegations that FirstEnergy paid bribes for a $1B bailout for nuclear plants owned at the time by a wholly owned FirstEnergy subsidiary.

FirstEnergy's insurance will pay $180 million to the company, less attorney fees, for board members and executives. Another provision is that six of the long-serving board members will not be eligible to stand for reelection at FirstEnergy’s next shareholder meeting.

John Adams, U.S. District Judge, stated that he wanted to understand why the settlement was reached with no depositions of current and former FirstEnergy executives and why no attempt had been made for former executives to pay millions in compensation.

FirstEnergy, which was not charged with any of its executives, announced in July that it would pay a $230million criminal penalty under a deferred prosecution agreement with U.S. Department of Justice.

In July 2020, Ohio House Speaker Larry Householder and four of his associates were indicted on racketeering conspiracy federal racketeering charges. They were also indicted for their involvement in the bribery scam. Federal authorities claim that $60 million from FirstEnergy was used by Householder supporters to elect him to the Ohio House Speakership. This was to pass the bailout legislation, and prevent the opposition from placing a referendum in Ohio.

Householder has pleaded guilty to not guilty and will be tried in court early next year.


 

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