This monthly newsletter provides updates on Ohio’s ongoing utility corruption scandal and is a joint project of Eye on Ohio, the nonprofit, nonpartisan Ohio Center for Journalism, and the nonprofit Energy News Network.

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Court orders last week rejected a motion to dismiss criminal charges against former Ohio House Speaker Larry Householder and confirmed he will stand trial with lobbyist Matt Borges later this month. The case charges them and others with bribery and a conspiracy centered on Ohio’s nuclear and coal bailout law, House Bill 6.

Additional developments in that case and other matters relating to Ohio’s ongoing corruption scandal include:

  • U.S. District Judge Timothy Black rejected much of Borges’ and Householder’s efforts to limit factual evidence and expert testimony against them, while granting or reserving judgment on most of the federal government’s evidentiary motions. Jury selection is scheduled to start on Jan. 20.
  • FirstEnergy will pay a $3.9 million penalty for hiding information about nearly $94 million in lobbying expenses from federal regulatory auditors.
  • A public records response by the Public Utilities Commission of Ohio provides no evidence that either it or the DeWine administration formally initiated any ethics investigation of the commission in the wake of Chair Sam Randazzo’s resignation in late 2020.
  • Exhibits used by lawyers to question FirstEnergy’s assistant controller under oath last year were released after months of delay. The materials highlight close dealings between company leadership and Republican operatives.
  • Gov. Mike DeWine appointed former AEP lobbyist Anne Vogel to head the Ohio Environmental Protection Agency.
  • Last month’s bomb cyclone caused a low water problem at the Davis-Besse plant now owned by Energy Harbor (formerly FirstEnergy Solutions).

Criminal trial ahead

On Jan. 3, U.S. District Judge Timothy Black denied former Ohio House Speaker Larry Householder’s motion to dismiss charges in the federal government’s HB 6 criminal case. A separate order that day refused to separate Householder’s trial from that of alleged co-conspirator Matt Borges, who had been a lobbyist for FirstEnergy Solutions and a former chair of the Ohio Republican Party.

The rulings set the stage for the trial of both defendants to move ahead, with jury selection scheduled to start on Jan. 20. The government has subpoenaed former Republican lawmakers Dave Greenspan, Kyle Koehler and Jay Hottinger to testify as part of its case. Householder allegedly pressured them to support HB 6. Federal prosecutors also have subpoenaed Ohio Attorney General Dave Yost.

In other orders issued last month, the court held the prosecution can use statements by alleged co-conspirator Neil Clark, now deceased, against Householder, as long as the government lays the proper foundation and meets its burden of proof at trial. But Judge Black did say the government shouldn’t use the phrase “Householder’s Enterprise” in opening and closing arguments — although the evidence may show Householder was in charge of a criminal enterprise.

Otherwise, Black wrote that defendants could use various approaches to try to impeach the government’s factual and expert witnesses, and he will rule on specific objections when they come up at trial. But evidence of “good acts” and claims of selective prosecution won’t be allowed. And, the judge warned, “the Court will not permit either side to suggest that party affiliation is an inherent sign of dishonesty, nor to stoke political divisions as a method of persuasion.”

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FirstEnergy agrees to federal penalty

FirstEnergy has agreed to pay roughly $3.9 million as a penalty for failing to provide information about lobbying expenses to federal regulatory auditors. The company did not properly account for that spending and other activities, the Federal Energy Regulatory Commission reported in February 2022.

In a similar vein, a January 2022 audit report filed with the Public Utilities Commission of Ohio found that FirstEnergy failed to properly track the use of an unlawful credit support rider. Use of a “money pool” among different subsidiaries made it impossible to determine if funds from the rider were used for HB 6 or other political activities. It’s unclear when or whether any money will be refunded to customers. 

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No ethics investigation

A public records response from the Public Utilities Commission of Ohio indicates the DeWine administration did not formally ask the commission to investigate ethics issues at the agency following former Chair Sam Randazzo’s resignation. Nor does it appear that the PUCO’s leadership took such steps on its own.

Randazzo resigned from the PUCO in November 2020, one day after FirstEnergy disclosed a $4.3 million payment to a firm controlled by him shortly before Randazzo took office. In July 2021, FirstEnergy admitted in a deferred prosecution agreement that payment was meant to secure favorable treatment in his official capacity. Randazzo has denied allegations of wrongdoing and has not been charged with a crime.

Public records have also shown that Randazzo played a central role in shaping HB 6 and in directing the PUCO’s limited response to FirstEnergy’s alleged corruption once the HB 6 scandal broke in mid-2020.

The Energy News Network and Eye on Ohio filed a public records request with the PUCO in April 2022 for materials referring or relating to various communications between the DeWine administration or Lt. Governor Jon Husted with leadership at the PUCO in the wake of Randazzo’s departure. The request was revised and narrowed after an initial denial by the PUCO in July 2022. After multiple follow-ups, the PUCO finally responded on Jan. 3, renewing earlier objections and claiming the request was overbroad and vague.

“It is unclear what you mean by ‘deal with any efforts to investigate alleged corruption by Sam Randazzo or anyone else at the PUCO,’” wrote PUCO lawyer Monica Waller. “That being said, as a courtesy, the PUCO attempted to identify any communications between the individuals listed, during the time period specified[,] and Mike DeWine and/or Jon Husted related to Inspector General, Ohio Ethics Commission, and/or internal investigations of Mr. Randazzo. The PUCO did not identify any records responsive to this part of your request.”

The response did not indicate whether there was any effort to investigate potential ethical breaches by others at the PUCO. Similar objections and responses were provided for requests relating to communications with other individuals in DeWine’s administration and for requests asking about communications relating to the timing of various FirstEnergy cases at the PUCO.

The PUCO did perform limited searches for materials and produced roughly 5 megabytes of documents. Many were transmittals or weekly recaps or comments on pending legislation.

Similar public records requests with follow-up to DeWine and Husted’s offices have gone unanswered by them since July.

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Document duel

After months of delay, the Energy News Network, Eye on Ohio and others have obtained documents lawyers used in questioning FirstEnergy assistant controller Tracy Ashton in a civil lawsuit related to HB 6.

Multiple texts and emails show a close working relationship between company leadership and the DeWine-Husted administration. Former FirstEnergy vice president Michael Dowling described Husted as “highly engaged” on HB 6. Dowling also wrote that DeWine’s former legislative affairs director, Dan McCarthy, said the administration and others would “step in” to get HB 6 done.

“Danny said there will be one more shit bill in the Senate and then a fix for all to like,” Dowling wrote on July 12, 2019.

Before joining DeWine’s administration, McCarthy had been a lobbyist for FirstEnergy and president of a pass-through nonprofit organization that funneled millions of dollars into efforts to pass and preserve HB 6.

The materials also include communications about Randazzo going for the chair spot at the PUCO on the day after Dowling and former FirstEnergy CEO Chuck Jones dined with DeWine and Husted in December 2018. Jones’ texts also show DeWine sought FirstEnergy’s input about what they wanted in a PUCO chair.

The delay in getting the materials reflects ongoing efforts by FirstEnergy to limit disclosures about its role in the HB 6 scandal. The company argued in early September that a stay in four cases at the PUCO should block the Office of the Ohio Consumers’ Counsel from producing the records. The consumers’ counsel responded that the PUCO had no jurisdiction over another agency’s response to public records requests.

On Dec. 12, PUCO attorney examiner Megan Addison basically agreed the commission has no say in how another agency responds to public records requests. Yet her order still gave FirstEnergy extra time to ask a court to stop the disclosures.

The same day the consumers’ counsel appealed that order to the full commission, FirstEnergy then told the commission that it would not ask a court to block the documents’ release after all.

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DeWine picks former AEP exec to head Ohio EPA

DeWine appointed his former policy director Anne Vogel as director of the Ohio Environmental Protection Agency. Vogel’s lobbying for DeWine’s office included work on HB 6. She also was a finalist to succeed Randazzo as PUCO chair after he resigned.

Prior to joining DeWine’s administration, Vogel was managing director of government affairs for American Electric Power. At the Ohio EPA, she will be responsible for enforcing air pollution permits and pollution limits on fossil-fueled power plants and other businesses, as well as laws dealing with water pollution, waste disposal and more.

On Jan. 6 the U.S. EPA proposed lowering the allowable limits for small particulate matter. On Dec. 30, the federal agency also revised its guidance about what counts as “waters of the United States.” Both steps will likely impose stricter limits and higher costs on coal mining, power plants and other industrial operations.

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Bomb cyclone at Ohio nuclear plant

Strong winds across Lake Erie during the Dec. 23 and 24 bomb cyclone storm temporarily lowered water levels near Energy Harbor’s Davis-Besse nuclear plant in Oak Harbor. The conditions caused a technical violation of conditions for the plant’s ultimate heat sink, whose purpose is to draw heat away from a nuclear reactor.

The Nuclear Regulatory Commission described the issue in a Dec. 30 notice, which noted the temporary nature of the low water levels and backup actions taken by the company.

The incident is significant because federal regulators and advocates have raised questions about the reliability of electricity generation, transmission and distribution in the face of extreme weather. The plant is also one of two that ratepayers would have had to subsidize if portions of House Bill 6 had not been repealed. The law’s coal plant subsidies and its gutting of the state’s clean energy standards remain on the books.

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Help wanted

PUCO Commissioner Beth Trombold has resigned after a decade at the agency, effective Feb. 10. Applications for her seat are due to the PUCO Nominating Council by 5 p.m. Eastern time on Jan. 12.

Kathi is the author of 25 books and more than 600 articles, and writes often on science and policy issues. In addition to her journalism career, Kathi is an alumna of Harvard Law School and has spent 15 years practicing law. She is a member of the Society of Environmental Journalists and the National Association of Science Writers. Kathi covers the state of Ohio.