The Rundown

Report: FirstEnergy being investigated by federal securities and exchange commission

By: - September 15, 2020 10:34 am

Davis Bees Nuclear Power Station with electricity pylons, Ohio. Getty images.

The company at the center of what prosecutors are calling the biggest corruption scandal in Ohio political history is being investigated by the U.S. Securities and Exchange Commission, reported Tuesday afternoon:

The examination became public in a lawsuit the company and a consulting firm filed in U.S. District Court in Cleveland against a former employee of the firm who accessed financial information about the Akron-based utility.

The investigation appears to have begun soon after a federal grand jury indicted former Ohio House Speaker Larry Householder and four allies on racketeering charges involving the passage of a $1.3 billion bailout bill for two nuclear power plants, according to court filings.

Former Ohio House Speaker Larry Householder, four political operatives and a dark-money group were charged by federal prosecutors in a criminal complaint that FirstEnergy paid them $61 million to get a $1.3 billion nuclear bailout from ratepayers in the form of House Bill 6.

Charged along with Householder were Matt Borges, a lobbyist who was formerly chairman of the Ohio Republican Party, Neil Clark, a lobbyist who owns Grant Street Consulting, Juan Cespedes, also a lobbyist, and Householder’s close adviser, Jeffrey Longstreth. The investigation centered on their efforts to get HB 6 passed into law.

All are charged with racketeering, which carries a prison sentence of up to 20 years. They have pleaded not guilty.

The criminal complaint says that “Company A,” the former FirstEnergy Solutions of Akron now known as Energy Harbor, worked to save its failing nuclear plants by funneling $61 million into Generation Now, a 501(c)(4) “dark money” group controlled by Householder.

The money was used for three general purposes, the complaint said. First it was used to build “Team Householder” through campaign contributions and other measures that helped Householder win the speakership in 2019. The money was also allegedly used for the personal benefit of Householder and the other conspirators. Finally, the money was allegedly used to fend off a petition effort to repeal HB 6, going so far as to buy plane tickets for and pay $2,500 each to people circulating it to get out of town.

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