Nuclear power company First Energy prosecuted for corruption, but still finds it worthwhile to bribe politicians

It is the largest fine ever imposed by the U.S. Attorney’s Office for the Southern District of Ohio.

But it is a pittance when compared to the earnings it brought in last year: $1.1 billion. For that reason, the company’s stock has a 52-week range of between $26 and its current high of $39 a share.

Paying Bribes Got FirstEnergy In Trouble, But It Is Still Making Political Donations , Forbes, 15 Nov 21,

Has FirstEnergy Corp. learned anything from its nuclear energy scandal and criminal probe? Prosecutors say that if the company fully cooperates then it will drop the charges against it in three years. But the utility is still giving millions to lobby lawmakers — a bit cringeworthy, given the events.

It’s legal. But the company’s chief executive since March, Steven Strah, has said that FirstEnergy FE +1.2% will play a more subtle political role. The protocol now is strict oversight of its lobbying activities — the kind of thing that would avoid, for example, bribing public officials to keep open struggling nuclear plants. For sure, FirstEnergy’s campaign spending is already at $1.5 million this year. That is in line with the contributions it has been making for the last decade.

FirstEnergy is sticking to “the way they did business 50 years ago,“ said Ashley Brown, a former Ohio public utilities commissioner, who now leads the Harvard Electricity Policy Group. “That’s part of why they’re just a lobbying firm with a utility sideline.”

Brown’s comments appeared in a story by Eye on Ohio, which joined with Energy News Network in the endeavor. Eye on Ohio is a division of the Ohio Center for Journalism.

In a deferred prosecution agreement reached over the summer between FirstEnergy and federal prosecutors, the utility admitted that it conspired with and subsequently bribed public officials: $60 million, which was used to secure a $1.3 billion bailout package for its nuclear units and to also help defeat a voter initiative that would have thrown out that law.

The company was penalized $230 million — money to be split equally between the federal and state government. In Ohio, it will be used to help low-income citizens pay their utility bills. It is the largest fine ever imposed by the U.S. Attorney’s Office for the Southern District of Ohio. But it is a pittance when compared to the earnings it brought in last year: $1.1 billion. For that reason, the company’s stock has a 52-week range of between $26 and its current high of $39 a share.

Prosecutors said that they wanted the penalty to “sting” but they did not want to disrupt the company’s business. They filed one charge: conspiracy to commit honest services and wire fraud, which will be dismissed if FirstEnergy continues to cooperate.

“Our activity in this space will be much more limited than it has been in the past, with closer alignment to our strategic goals and with additional oversight and significantly more robust disclosure,” says CEO Strah, before investors. “These efforts, together with enhanced policies and procedures, will help to bring additional clarity around appropriate behaviors at FirstEnergy.”

The bargain between prosecutors and the utility examines how FirstEnergy took monies from its regulated units and then paid off public officials. Former Ohio House Speaker Larry Householder has already been charged. Former Ohio Public Utilities Commission Chairman Sam Randazzo has resigned his position. The power company used a dark money group called Generation Now to hide its efforts. A lobbyist has pleaded guilty along with a staffer for Householder, who set up the shady organization to receive the dirty money.

A New Track

Subsequent to this criminal settlement, Ohio’s Attorney General Dave Yost added FirstEnergy’s former CEO Charles Jones to a list of defendants his office is suing. (Prosecutors would not comment on whether Jones is also in criminal trouble.) The civil complaint also includes ex-FirstEnergy senior vice president Michael Dowling and Sam Randazzo.

The “corruption was more cancerous than previously thought––necessitating adding additional defendants and giving rise to additional claims,” the lawsuit says. Ohio’s legislature, meantime, has revoked the $1.3 billion bailout. …… https://www.forbes.com/sites/kensilverstein/2021/11/15/paying-bribes-got-firstenergy-in-trouble-but-it-is-still-making-political-donations—and-amends/?sh=1e29ece1150a