Battle over how Ohio regulator spent $4.3 million utility “bribe” continues

By: - July 21, 2023 5:00 am

FBI agents remove boxes of materials from PUCO Chairman Sam Randazzo’s condo in Columbus Nov. 17, 2020. Photo courtesy of Daniel Konik/Statehouse News Bureau.

Attorneys are continuing to battle over documents regarding how Ohio’s former top utility regulator spent and spoke about $4.3 million he received in 2019. The company paying it later said the money was a bribe made in exchange for official action.

Attorneys for the plaintiffs in a class-action suit against Akron-based FirstEnergy want to know what Sam Randazzo, Gov. Mike DeWine’s first appointee to chair the Public Utilities Commission of Ohio, did with the money as part of their lawsuit over one of the largest bribery and money laundering conspiracies in Ohio history.

FirstEnergy and other Ohio utilities paid more than $60 million through dark money groups between 2017 and 2019 to make then-Rep. Larry Householder, R-Glenford, speaker. From that perch, Householder shepherded and protected a $1.3 billion ratepayer bailout that mostly was intended for FirstEnergy.

Householder last month was sentenced to 20 years in federal prison for his role helping to lead the conspiracy. Former GOP Chairman Matt Borges was sentenced to five years for his more minor role. 

Both men are appealing, while more indictments in the case are expected.

The plaintiffs in the class-action suit — a big group of pension and investment funds — are claiming that the reckless conduct of FirstEnergy’s leadership harmed their investments and cost them big money.

For its part, FirstEnergy fired several of its top executives and signed a deferred prosecution agreement in 2021 admitting to its role in the conspiracy and agreeing to pay $230 million. The corporation’s new leadership now seems to want to forget the episode.

In an interview published Tuesday in the Akron Beacon Journal, new CEO Brian X. Tierney called the racketeering conspiracy a “trauma” and said, “I think the company has done a good job taking responsibility for what happened, entering into a deferred prosecution agreement with the Department of Justice, owning up to what happened, taking steps to ensure that that doesn’t happen again, making changes in management, making additions to management and making sure that something like that never happens here again.”

The former private-equity executive added, “So that now allows us to focus on the future and put that past behind us.”

Not so fast, the plaintiffs in the class action suit and a few of the fired former executives said in a motion filed on June 30, the same day Borges was sentenced. 

The plaintiffs joined with former FirstEnergy CEO Chuck Jones and Vice President Michael Dowling in demanding that FirstEnergy produce the report from the internal investigation it conducted after Householder, Borges and others were arrested. Jones and Dowling haven’t been charged, but in court filings, they’ve said they’re objects of the feds’ ongoing investigation.

The former executives and the class-action plaintiffs argued that FirstEnergy has selectively disclosed parts of its investigation to throw some employees under the bus, while concealing others to protect executives and board members who are still running the company — despite Tierney’s desire to “put that past behind us.”

As part of their effort, the class-action plaintiffs want to know what Randazzo, the former PUCO chairman, did with the $4.3 million that FirstEnergy admitted was a bribe — and what he told others about it during the conspiracy and during the 17 months following Householder’s arrest.

Just before and while he was the state’s top regulator, Randazzo played a major role in drafting legislation providing the corrupt bailout to utilities he was supposed to be overseeing. In a sign that problems persist at the PUCO, the agency was asked during Householder’s trial if it had a policy against commissioners and staff writing utility legislation. It apparently does not.

“The PUCO is a state agency and will always be responsive to requests for information or technical assistance to the Ohio General Assembly on matters related to utilities and commercial transportation,” spokesman Matt Schilling responded. 

The class-action plaintiffs and Randazzo’s attorneys have been going back and forth since April 5 over what Randazzo must do “to produce any documents regarding the $4.3 million payment within (his) possession, custody, or control.” They’ve also disputed the time period that covers.

In May, Randazzo disclosed that he paid about $1.5 million to the U.S. Treasury in taxes. He said he made another $2.1 million in mortgage payments and he lent his daughter’s restaurant $100,000.

But even as he did, U.S. Magistrate Judge Kimberly Jolson slammed the former PUCO chairman for what she saw as a lack of cooperation. She wrote that his conduct so far, “does not suggest good-faith compliance with their discovery obligations.”

The plaintiffs still want to know what Radazzo was communicating to others about the payment — and not just up until the time his condo was searched in November 2020, but until the end of 2021. In addition, the class-action lawyers demand that Randazzo hire a contractor to search the cloud for communications, instead of simply searching devices from which messages presumably might have been deleted.

After all, the class-action attorneys said in a July 14 motion, Randazzo had long been a recipient of FirstEnergy largesse when Gov. Mike DeWine nominated him to be the state’s top utility regulator in early 2019.

“FirstEnergy Corp… has admitted that it paid Randazzo (through his two shell entities… ) over $22 million to do nothing — and that money is on top of Randazzo’s earnings from his decades-long career as a lawyer,” the motion said. “Actually, FirstEnergy has admitted that the final $4,333,333 it paid Randazzo was to do something — something illegal by selling out his position as Chairman of the Public Utilities Commission of Ohio.”



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Marty Schladen
Marty Schladen

Marty Schladen has been a reporter for decades, working in Indiana, Texas and other places before returning to his native Ohio to work at The Columbus Dispatch in 2017. He's won state and national journalism awards for investigations into utility regulation, public corruption, the environment, prescription drug spending and other matters.