COLOMBUS, Ohio – A new federal statement from FirstEnergy offers further details on why the Akron-based utility company abruptly fired three senior executives last month, including former CEO Chuck Jones.
In a statement Thursday to the U.S. Securities and Exchange Commission, the company’s employees described a dubious payment of $ 4 million that the company made in early 2019 to an entity related to someone who was subsequently hired as a civil servant.
The statement said the payment was made to terminate a 201
“It is not yet established whether the payments were for the purposes set out in the consultancy agreement,” the statement said.
The statement said the former senior executives “did not reasonably ensure that the relevant information was communicated within our organization and was not withheld by our independent directors, our audit committee and our independent auditor.”
The statement did not identify the government official by name, but the Ohio Utilities Commission regulates energy distribution tariffs for FirstEnergy and other utilities. Company spokesman Jennifer Young declined to give details and a PUCO spokesman did not return a message immediately.
“We take very seriously violations of FirstEnergy’s company policies and code of conduct,” Young said in an email. “The Council will continue to take decisive action to address this issue and ensure that we have effective processes and procedures in place to uphold our standards and values.”
Dan Tierney, a spokesman for Governor Mike DeWine, said the governor’s office had not seen the filing before and declined to comment because it did not identify the civil servant.
FirstEnergy fired Jones and two other senior executives on Oct. 29 for saying the company had unspecified breaches of company policy. The company declined to comment on the specific reasons, citing an ongoing federal investigation into House Bill 6, a nuclear rescue bill that is at the heart of an ongoing corruption investigation.
But company officials said FirstEnergy had launched an internal review as a result of the HB6 investigation and now says it is trying to tighten its internal controls.
The company said it could face criminal charges from the investigation that led to the July arrest of Larry Hausholder, then chairman of the Ohio House of Representatives and one of Ohio’s most powerful politicians.
Two others arrested in July, Jeff Longstreet, Householder’s biggest political aide, and Juan Chespedes, a lobbyist for the company formerly known as FirstEnergy Solutions, pleaded guilty to federal charges in connection with the investigation.
They admitted to being involved in what federal prosecutors described as a complex $ 61 million bribe scheme by which the Host helped secure HB6, saving $ 1 billion for two nuclear power plants formerly owned by FirstEnergy. . FirstEnergy and its affiliates provided $ 61 million to a network of political groups that helped Householder gain a leadership position in legislation, pressure state lawmakers to pass HB6, and then defend the bill against repeal, prosecutors said.
The host pleaded not guilty and denied any wrongdoing.
In another sign of federal officials investigating Ohio’s energy regulations, FBI agents searched the home of PUCO President Sam Randazzo on Monday, carrying boxes and bags of files and other items. DeWine told reporters on Tuesday that there were no indications that Randazzo was under investigation. The FBI declined to comment on what they are investigating.
DeWine hired Randazzo, a longtime attorney in the utilities industry, to run PUCO in February 2019.
Randazzo did not comment on the search or PUCO officials. Randazzo did not attend the committee meeting on Thursday.
FirstEnergy’s statement on Thursday said the company had $ 3 billion in revenue in the third quarter of 2020, a good profit of $ 454 million.
While FirstEnergy claims in the statement that it “cannot predict” whether the legislator will repeal and / or replace HB6 (a decision that is still in the air), the document states that “it is reasonably possible” that legislators repeal some controversial provision. as “separation”. This allows FirstEnergy to conclude guaranteed annual revenues from household and commercial customers.
At least one legislator says there has been talk of making separation language HB6 less “profitable” for FirstEnergy.
Cleveland.com policy reporter Jeremy Pelzer contributed to this story.