Former Public Utilities Commission of Ohio Chair Sam Randazzo has been indicted on several bribery charges alleging that FirstEnergy paid him over $4 million before his appointment in 2019 with the understanding that he would act in the company’s interest.
“Today’s indictment outlines an alleged scheme in which a public regulatory official ignored the Ohio consumers he was responsible for protecting, instead taking a bribe from an energy company seeking favors,” FBI Cincinnati Special Agent in Charge William Rivers said in an announcement of the charges. “The FBI will remain vigilant in investigating allegations of corruption at all levels of government and hold those who violate the law accountable for their actions.”
Randazzo served as commission chair from April 2019 until November 2020, when he resigned following an FBI raid on his home in Columbus. He was indicted on Nov. 29 of this year with two counts of travel act bribery, one count of wire fraud, five counts of making illegal monetary transactions, two counts of honest services wire fraud, and one count of conspiring to commit travel act bribery and honest services wire fraud.
FirstEnergy spokesperson Jennifer Young said the company cannot comment on the allegations; however, it has sought to remedy past issues. The company agreed to pay a $230 million fine in July for allegedly spending $61 million in bribes, campaign contributions and advertising for the election of former Ohio House Speaker Larry Householder, who supported a bill providing $1.5 billion in subsidies for the company’s nuclear plants. (See DOJ Orders $230 Million Fine for FirstEnergy.)
“While we can’t comment on the actions taken by the U.S. Attorney’s Office for the Southern District of Ohio, FirstEnergy has taken significant steps to put past issues behind us. Today we are a different, stronger company with a sound strategy and focused on a bright future,” Young said in an email.
According to the indictment, Randazzo solicited a $4.3 million payment from former FirstEnergy CEO Charles Jones and Michael Dowling, former senior vice president of external affairs, in late 2018 in exchange for seeking a position on the commission to aid the company. After meeting with two executives at his home in December, Randazzo allegedly arranged the payment, which was made on Jan. 2, 2019, and the executives lobbied for his appointment. The indictment included messages between the executives and Randazzo.
“We’re gonna get this handled this year, paid in full, no discount. Don’t forget about us or Hurricane [Jones] may show up on your doorstep! Of course, no guarantee he won’t show up sometime anyway,” one executive messaged Randazzo, accompanied by an “image of a venomous snake protruding from a hurricane.”
“Made me laugh — you guys are welcome anytime and anywhere I can open the door. Let me know how you want me to structure the invoices. Thanks,” Randazzo responded, according to the indictment. He added, “I think I said this last night, but just in case — if asked by the administration to go for the chair spot, I would say ‘yes.’”
After his appointment in April 2019, the indictment shows further messages between the executives and Randazzo discussing how he could aid the company in ensuring the passage of House Bill 6, which provided subsidies for the company’s nuclear plants, and help a financial issue they referred to as the “Ohio 2024 hole.”
A series of messages between executives said, “Stock is gonna get hit with Ohio 2024. Need Sam to get rid of the ‘Ohio 2024 hole.’”
Another executive responded, “I spoke with Sam today. Told me 2024 issue will be handled next Thursday.” The announcement of the charges stated that the commission issued an order the following Thursday alleviating the issue.
In another message sent on March 4, 2020, an executive recounted being told by Randazzo that he would help with an issue the company was facing but needed time because of discussions circulating among commission staff about his allegiances.
“He will get it done for us but cannot just jettison all process. Says the combination of overruling staff and other commissioners on decoupling, getting rid of SEET [significantly excessive earnings tests] and burning the DMR [distribution modernization rider] final report has a lot of talk going on in the halls of PUCO about does he work there or for us? He’ll move it as fast as he can. Better come up with a short-term workaround,” the message said.
The indictment also alleges Randazzo embezzled at least $1 million from an industry group representing large industrial energy users in Ohio through his consulting firm Sustainability Funding Alliance of Ohio going as far back as 2010. When the group received settlement payments to be distributed among its membership, it said Randazzo used his control of its bank accounts to divert a portion of the payments to a fictitious member he created. He allegedly attempted to conceal the embezzlement by sending the funds through multiple bank accounts and concealing the amount the group received.
The announcement states that Randazzo could face 20 years in prison if convicted.
“Public officials — whether elected or appointed — are tasked with upholding the highest level of integrity in their duties and responsibilities. Such service to the public must be selfless, not selfish,” U.S. Attorney Kenneth Parker said in the announcement. “Through the indictment unsealed today, we seek to hold Randazzo accountable for his alleged illegal activities.”
