COLUMBUS, Ohio (AP) — Fired former FirstEnergy executives improperly paid a firm tied to a future Ohio utility regulator about $4 million early last year to terminate “a purported consulting agreement” that had been in place since 2013, one of the nation's largest electric utilities told federal regulators on Thursday.
Public Utilities Commission of Ohio Chairman Sam Randazzo was not mentioned by name in the company's tardy quarterly report with the U.S. Securities and Exchange Commission. However, Randazzo fits the description of someone who “subsequently was appointed to a full-time role as an Ohio government official directly involved in regulating” FirstEnergy. Randazzo was appointed chairman by Republican Ohio Gov. Mike DeWine on Feb. 4, 2019.
FBI agents searched Randazzo’s Columbus home Monday. The agency has declined to comment on what they are investigating.
The FirstEnergy filing said certain former members of its senior management violated the company's policies and code of conduct in relation to the payment. Five top executives, including CEO Chuck Jones, have been fired in the past month.
“At this time, it has not been determined if the payments were for the purposes represented within the consulting agreement,” the filing said.
Messages were left with Randazzo and a Public Utilities Commission spokesman seeking comment.
FirstEnergy spokesperson Jennifer Young in a statement Thursday night said the company takes violations of its policies and code of conduct “very seriously.” Jones and the other executives were fired after an internal investigation by the company's board of directors.
“The board will continue to take decisive action to address this matter and ensure we have effective processes and procedures in place to uphold our standards and values going forward,” Young's statement said.
FirstEnergy said the payment was discovered as part of the company's internal investigation into allegations against it in a $60 million federal bribery investigation in which former House Speaker Larry Householder is the chief target.
The company has been accused of secretly funneling the $60 million to groups controlled by Householder to ensure passage and to stop a subsequent referendum for legislation that provided a $1 billion bailout for two nuclear plants operated at the time by wholly owned FirstEnergy subsidiary.
FirstEnergy acknowledged in the filing receiving subpoenas from the U.S. Attorney's Office in July involving Larry Householder and others. It said “we are cooperating with the U.S. Attorney’s Office and the SEC in their investigations.”
And, on Aug. 10, the Division of Enforcement for the U.S. Securities and Exchange Commission “issued an order directing an investigation of possible securities laws violations by First Energy,” the filing said. The SEC issued subpoenas to the company and some of its officers on Sept. 1.
In addition to the investigations, FirstEnergy has been sued by angry shareholders and the Ohio Attorney General’s Office. The company told its investors in the filing that the investigations or lawsuits may “divert management’s focus and result in substantial investigation expenses, or otherwise require the commitment of substantial resources.”
DeWine’s spokesman Dan Tierney said “it would be improper for us to comment at this time” because the filing does not include names of any individuals. DeWine told reporters on Tuesday that he had no indication Randazzo was under investigation. He described Randazzo as “a good person” and said he was withholding judgment until he had more facts.