Ohio AG announces indictments for ex-FirstEnergy execs, Randazzo in House Bill 6 scandal

Two former Akron-based FirstEnergy executives and ex-Public Utilities Commission of Ohio Chairman Sam Randazzo were indicted Friday in a statehouse scandal that benefited the powerful utility at the expense of Ohio ratepayers.

The executives, ex-CEO Chuck Jones and ex-Senior Vice President of External Affairs Michael Dowling, were charged for the first time in connection with a sweeping pay-to-play scandal that has already landed ex-Ohio House Speaker Larry Householder to federal prison for 20 years. Both men deny any wrongdoing.

Ohio Attorney General Dave Yost announced the charges, which include engaging in a pattern of corrupt activity, during a Monday news conference. He detailed how Randazzo, a Gov. Mike DeWine appointee, betrayed his clients and Ohioans to benefit FirstEnergy and its executives, who were paying the public official millions. Randazzo, 74, of Columbus, has repeatedly said he did nothing wrong.

And for the first time since the scandal broke in 2020, those accused of paying the bribes could be on the hook.

Ohio House Bill 6 corruption case: Who is Chuck Jones?

"There can be no justice without holding the checkwriters and the masterminds accountable," Yost said Monday. “Shout it from the public square to the boardroom, from Wall Street to Broad and High: Those who perversely seek to turn the government to their private ends will face the destruction of everything they were working for.”

But Carole Rendon, Jones' attorney, said in a statement that her client "did not violate the law. He did not bribe anyone. He acted in the best interests of FirstEnergy’s customers as well as its employees and investors, and never betrayed their trust."

An attorney for Dowling, 59, of Massillon, said in a statement that the allegations were “completely false and are not supported by any credible evidence whatsoever," adding that it was shocking that prosecutors would return "an irresponsible indictment and have no evidence to support the charges in the indictment.”

Dowling, Randazzo and Jones, 68, of Akron, were indicted in Summit County Friday. They were released on bond Monday and were ordered to surrender their passports. Their arraignments are set for Tuesday afternoon.

It's not yet clear what Monday's announcement means for an ongoing federal investigation into corruption at the Ohio Statehouse, which led to the convictions of Householder and others. "Today's announcement was strictly related to state charges. We will continue doing our work to pursue justice," U.S. Attorney for the Southern District of Ohio Ken Parker said.

What was the House Bill 6 scheme?

Randazzo is accused of working for FirstEnergy to the detriment of Ohio ratepayers and his legitimate client: the Industrial Energy Users-Ohio, a trade association of large energy users trying to lower their bills.

Randazzo worked as a consultant for FirstEnergy between 2013 and January 2019. In that role, Randazzo made millions lobbying top lawmakers to benefit FirstEnergy. One such payment was $4.3 million that FirstEnergy paid Randazzo in January 2019, shortly before DeWine appointed Randazzo to lead the Public Utilities Commission of Ohio.

Ohio House Bill 6 case: Who is Sam Randazzo?

"It was not a gift: Randazzo would work hard for FirstEnergy from inside the government," wrote Deputy Attorney General Carol O'Brien in the indictment.

While serving as PUCO chairman, Randazzo assisted FirstEnergy in several ways. He helped craft House Bill 6, which would have given a more than $1 billion bailout to two nuclear plants then owned by a FirstEnergy subsidiary. Randazzo also temporarily delayed a rate case that could have cut into FirstEnergy's profits and he helped add a budget provision called decoupling that would have helped the company weather a recession.

Both Jones and Dowling worked with Randazzo and benefitted financially from Randazzo's assistance in the form of FirstEnergy's rising stock prices, the indictment alleges.

"Chuck Jones and Michael Dowling worked with Mr. Randazzo to subvert state government in ways that mightily enriched themselves," Deputy Attorney General Carol O'Brien said. “The ultimate betrayal to his legitimate clients and frankly, to the citizens of the state of Ohio was the FirstEnergy payment of $4.3 million to Sam Randazzo as he was angling for an appointment to the Public Utilities Commission of Ohio. The money was paid for a purpose: to influence Mr. Randazzo in the exercise of his duties as the chair of the PUCO.”

Randazzo is also accused of skimming money from his client, the Industrial Energy Users-Ohio. The indictment alleges Randazzo funneled money from a settlement between FirstEnergy and IEU-Ohio into two shell companies and took a cut of the proceeds.

Federal investigators recently charged Randazzo with accepting money from FirstEnergy to help the company in his role as a utility regulator. Randazzo has pleaded not guilty and awaits trial.

What are the charges?

Randazzo was indicted on 22 felony counts, including:

• One count of engaging in a pattern of corrupt activity, a first-degree felony.

• One count of grand theft, a first-degree felony.

• Two counts of aggravated theft, a second-degree felony.

• One count of bribery, a third-degree felony.

• Three counts of telecommunications fraud, a first-degree felony.

• Eight counts of money laundering, a third-degree felony.

• Six counts of tampering with records, a third-degree felony.

Jones and Dowling were each charged with:

• Once count of engaging in a pattern of corrupt activity, a first-degree felony.

• Two counts of aggravated theft of $1.5 million or more, a first-degree felony.

• One count of bribery, a third-degree felony.

• Two counts of telecommunications fraud, a first-degree felony.

• Four counts of money laundering, a third-degree felony.

Dowling was also charged with two counts of tampering with records, each a third-degree felony. Randazzo's two "shell" companies − Sustainability Funding Alliance of Ohio and IEU-Ohio Administration − also faced criminal charges.

How is this connected to Householder?

A separate, federal investigation led to a 20-year prison sentence for Householder and a five-year sentence for ex-Ohio Republican Party Chairman Matt Borges. They were convicted as part of a massive pay-to-play scheme that involved Akron-based FirstEnergy bankrolling Householder's return to power in exchange for House Bill 6, which included a more than $1 billion nuclear bailout.

Earlier coverage: What you need to know about Ohio's corruption scandal, Larry Householder conviction

Three others were charged along with Householder and Borges. Two pleaded guilty, agreed to cooperate with the investigation and now await sentencing. The third, lobbyist Neil Clark, died by suicide in 2021.

Yost was subpoenaed to testify in that trial but ultimately wasn't called to the witness stand.

As the federal case played out, Yost's Ohio Organized Crime Investigations Commission investigated whether anyone had violated state law as well. On an investors call Friday, FirstEnergy officials said they had been cooperating with the probe and had nothing new to report about it.

Yost also filed a civil lawsuit against FirstEnergy and others shortly after the FBI's 2020 arrests. That case was recently placed on hold because of pending criminal investigations.

Who are Chuck Jones, Michael Dowling?

FirstEnergy fired Jones, Dowling and another senior vice president Dennis Chack in October 2020 following an internal probe into the statehouse scandal.

Jones, an Akron native, joined Ohio Edison as a substation engineer in 1978 and was named CEO in January 2015. Dowling rose through the ranks at Akron-based FirstEnergy Corp., starting in the communications department in 1986 and moving up to senior vice president before being fired in October 2020.

House Bill 6 case: Who is Michael Dowling and what felony violations does he face?

Householder's trial revealed how Jones and Dowling coordinated with the top lawmaker to pass the nuclear bailout. The two also met with Randazzo at his German Village condominium shortly before Randazzo became PUCO chairman.

FirstEnergy has overhauled its board and several executives since the scandal broke in 2020. The company agreed to pay a $230 million penalty as part of a 2021 deferred prosecution agreement, in which FirstEnergy admitted it bribed Householder and Randazzo and agreed to assist in the ongoing federal probe.

"FirstEnergy has taken significant steps to move forward, including reconstituting our senior leadership team and instilling a culture of ethics, integrity and accountability at every level of the organization," FirstEnergy spokeswoman Jennifer Young said Monday.

Read the indictment here:

St vs Randazzo Et Al Indictment 2024-02-12 by Dan Kadar on Scribd

Stephanie Warsmith of the Akron Beacon Journal contributed to this story.

Jessie Balmert is a reporter for the USA TODAY Network Ohio Bureau, which serves the Columbus Dispatch, Cincinnati Enquirer, Akron Beacon Journal and 18 other affiliated news organizations across Ohio.

This article originally appeared on Cincinnati Enquirer: Ohio AG announces indictments in House Bill 6 scandal