Attorneys dig up thousands of new documents in case against FirstEnergy

By: - September 22, 2023 4:55 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.

Lawyers for pension and investment funds suing Akron-based FirstEnergy report that as they press the company for documents relating to alleged bribery, the company is finding thousands more.

Meanwhile, the U.S. Justice Department isn’t commenting on rumors that further charges might be filed next month in the biggest bribery and money-laundering scandal in Ohio history.

Investors for huge pension and investment funds have sued FirstEnergy alleging violations of U.S. Securities and Exchange Commission rules in a way that badly harmed their investments.

Former CEO Chuck Jones and Vice President Michael Dowling directed more than $60 million in company money into 501(c)(4) dark money groups controlled by former Ohio House Speaker Larry Householder, R-Glenford, between 2017 and 2020. Householder used that money to pass and protect a $1.3 billion ratepayer bailout that was mostly intended to prop up two Northern Ohio nuclear reactors FirstEnergy was spinning off — although hundreds of millions also went to “recession-proof” FirstEnergy and to prop up two 68-year-old coal-fired power plants that are partially owned by Columbus-based AEP, which also contributed to the dark money groups.

Jones and Dowling also gave $4.3 million to Sam Randazzo, whom Gov. Mike DeWine in 2019 nominated to chair the Public Utilities Commission of Ohio. In a deferred-prosecution agreement, FirstEnergy said the payment was a bribe, but Jones, Dowling and Randazzo all deny that was the case.

More evidence of their denials came in a Tuesday court filing by the plaintiffs in the class-action civil suit. 

FirstEnergy said the payment was made through Randazzo’s “consulting company in return for (Randazzo) performing official action in his capacity as PUCO Chairman to further FirstEnergy Corp.’s interests” and that “it was under no legal obligation to make the payment . . .,” FirstEnergy said in its deferred prosecution agreement.

But Dowling, Jones and Radazzo “have tried to portray the payment as a settlement for the benefit of the Industrial Energy Users-Ohio (“IEU-Ohio”) trade group in recent depositions,” the class-action lawyers said Tuesday. Jones, Dowling and Randazzo have sat for sworn depositions in the civil suit, but transcripts were submitted to the court Tuesday under seal.

Householder in June was sentenced to 20 years in federal prison for his role in the conspiracy and former Ohio GOP Chairman Matthew Borges was sentenced to five years. Three others were charged, with two who cooperated awaiting sentencing. The third died by suicide.

Throughout those proceedings, U.S. Attorney Kenneth Parker has said that the investigation continues. 

Word had it that Jones, Dowling and Randazzo would be charged before Labor Day, which didn’t happen. Now charges are rumored to be coming in October. Jennifer Thornton, Parker’s spokeswoman, on Thursday declined to comment.

Lawyers in the class-action suit said their clients lost huge sums as investors when FirstEnergy stock plummeted in the wake of the arrests of Householder and others in July 2020. The company failed in its duty to disclose its executives’ reckless conduct, the civil suit says. 

And as the pension and investment funds sue FirstEnergy, they said the company has been reluctant to provide documents relating to that illegal conduct. The parties have long been battling over the matter — including over the keywords FirstEnergy must use as it searches its records.

The acronym “SLH” was used to denote “Speaker Larry Householder” and it came up frequently in records presented during Householder’s seven-week trial. But attorneys for the plaintiffs in the civil case are still waiting for newly found records containing “SLH.”

“…  on September 1, 2023, FirstEnergy revealed that the term ‘SLH’ resulted in nearly 1,448 additional, unique documents (including family attachments) for the time period January 1, 2014 through December 31, 2020, that have not been produced,” the Tuesday filing said.

For their part, FirstEnergy’s attorneys accused their opponents of gross impatience.

“… there has not been any ‘months long delay,’ which is a gross mischaracterization of the record,” the FirstEnergy attorneys said in the filing, which was a status update to the court.

The attorneys for the investors also accused FirstEnergy of concealing records relating to Randazzo behind attorney-client privilege. The company conceded that the $4.3 million payment to the regulator was a bribe, so under the “crime-fraud exception,” it can’t use attorney-client privilege to withhold its lawyers’ communications with Randazzo, the plaintiffs’ attorneys said.

FirstEnergy attorneys “approved payments to Randazzo under the (Sustainability Funding Alliance) consulting contract [from the legal department’s budget] and knew those payments were payments to Randazzo; (the attorneys) also knew that SFA did not provide consulting services to the legal team[; and] knew he was being paid ‘every month to do nothing,’” plaintiffs lawyers said in Tuesday’s filing.

For their part, FirstEnergy’s lawyers insisted that they have diligently worked to comply with the plaintiffs’ document requests.

“There is a long history to Plaintiffs’ repeated attempts to manufacture a gap in FirstEnergy’s production of communications with Samuel Randazzo where none exists,” they said in Tuesday’s filing.



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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.