An energy company based in Akron, Ohio, that was involved in a $60 million bribery scandal has been directed by the U.S. Securities and Exchange Commission (SEC) to pay a $100 million civil penalty for deceiving investors about its part in the controversy. The SEC found that FirstEnergy Corp. violated antifraud regulations by misrepresenting its involvement in the political corruption scandal and not disclosing relevant payments. The agency stated in a cease and desist order that the company’s former CEO provided misleading information to investors in a press release and later during a conference call in July 2020.
This penalty follows a previous agreement where FirstEnergy agreed to pay $20 million to avoid criminal charges as part of a settlement with state prosecutors. The bribery scheme, which led to a former Ohio House speaker serving a lengthy prison sentence, revolved around FirstEnergy’s endeavors to persuade state legislators to approve a $1 billion bailout for two of its linked nuclear plants and to defend the bill against a repeal attempt.
Brian Tierney, the President, and CEO of FirstEnergy, expressed satisfaction with the settlement reached with the SEC, which mandates the payment of the penalty within 14 days or facing interest fees. In April, two former executives of FirstEnergy, CEO Chuck Jones and Senior Vice President Michael Dowling, were indicted as part of a continuing investigation. Both were dismissed in October 2020 for violating company regulations and codes of conduct, although they have denied any misconduct.
Another individual charged in connection to the scandal, Sam Randazzo, the former chair of the Public Utilities Commission of Ohio, pleaded not guilty in federal and state courts before passing away by suicide at the age of 74 in April. In a separate development, former House Speaker Larry Householder was sentenced in June 2023 to 20 years for his involvement in orchestrating the scheme, while lobbyist Matt Borges, a former chair of the Ohio Republican Party, received a five-year sentence.
Federal prosecutors stated that those implicated in the scandal utilized the $60 million in illicitly funded FirstEnergy funds to elect Householder’s preferred Republican candidates to the House in 2018 and to aid him in securing the speakership the following January. These funds were also used to ensure the passage of the tainted energy bill and to execute what authorities described as a smear campaign to thwart a repeal referendum from reaching the ballot.
FirstEnergy acknowledged its role in the bribery scandal as part of a deferred prosecution agreement with the U.S. Department of Justice in July 2021. As per the agreement, the company consented to pay $230 million in penalties and implement a comprehensive list of reforms within three years to avoid facing federal conspiracy charges.