The U.S. Securities and Exchange Commission has mandated that an energy business central to a $60 million bribery scheme in Ohio pay a $100 million civil penalty for deceiving investors about its involvement in the incident.
According to the SEC, Akron-based FirstEnergy Corp. broke antifraud laws by lying about its involvement in the political corruption scheme and withholding relevant payments.
In a cease and desist order, it claimed that the former CEO of the utility had committed a “number of misrepresentations to investors” in a news release and subsequently on a conference call for earnings in July 2020.
The move follows FirstEnergy’s agreement to pay $20 million to settle with state prosecutors and avoid facing criminal charges, which was reached a month ago.
A former speaker of the Ohio House was already sentenced to a long prison term as a result of the bribery scheme, which focused on FirstEnergy’s attempts to persuade legislators in the state to approve a $1 billion bailout of two of its associated nuclear facilities and to protect the measure against a repeal attempt.
Brian Tierney, president and chief executive officer of FirstEnergy, expressed the business’s satisfaction with the resolution reached with the SEC, which stipulated that the company must pay the penalty within 14 days or risk incurring interest penalties.
As part of the extensive investigation, two former FirstEnergy executives—CEO Chuck Jones and Senior Vice President Michael Dowling—were charged in April. Jones and Dowling were both fired in October 2020 for breaking the company’s code of conduct and policies. They have refuted any misconduct.
Sam Randazzo, the former chair of the Ohio Public Utilities Commission, was also charged alongside them. He entered a not guilty plea in both federal and state courts before taking his own life in April at the age of 74.
In June 2023, lobbyist Matt Borges, a former Ohio Republican Party chair, received a five-year sentence for his involvement in arranging the plot, while former House Speaker Larry Householder received a 20-year sentence.
The $60 million in covertly funded FirstEnergy funds, according to federal prosecutors, was utilized by individuals involved in the conspiracy to help Householder obtain the speakership in January of the following year and to elect Republican candidates of his choosing to the House in 2018.
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The funds were then utilized to push through the corrupt energy bill and, according to officials, to launch a deceptive campaign to keep a repeal vote off the ballot.
Under the terms of a July 2021 deferred prosecution deal with the U.S. Department of Justice, FirstEnergy acknowledged its involvement in the bribery conspiracy.
Subsequently, the business consented to forgo criminal prosecution on a federal conspiracy allegation in exchange for paying $230 million in penalties and putting in place a lengthy list of improvements within three years.
