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Ohio Utility to Pay $230M in Settlement Over Bailout Bribery Scheme

The operator of two Ohio nuclear power plants bailed out by legislation pushed by expelled former state House Speaker Larry Householder has agreed to pay a $230 million fine for its part in a bribery scheme.

CINCINNATI (CN) — FirstEnergy Corp., accused of conspiring with Ohio Republican lawmaker Larry Householder to pass a $1 billion bailout of two failing nuclear power plants, agreed Thursday to pay a $230 million fine in exchange for delayed prosecution on federal wire fraud charges.

The details of the deferred prosecution agreement between the Akron-based company and the Justice Department were spelled out in a press release and discussed during a press conference Thursday.

Under the agreement, FirstEnergy is required to pay $115 million to the federal government within 60 days, while the other half of the fine will be paid to the Ohio Development Service Agency's Percentage of Income Payment Plus Plan, which aids Ohioans in making utility payments.

Acting U.S. Attorney Vipal J. Patel and FBI Special Agent in Charge Chris Hoffman spoke to reporters Thursday morning at the Southern District of Ohio U.S. Attorney's Office in Cincinnati.

Patel said the single charge of conspiracy to commit honest services fraud will be dismissed if FirstEnergy holds up its end of the bargain, but emphasized the company "has to do a number of things ... there's a lot."

"FirstEnergy is admitting to its culpability," he said.

Patel said the $230 million fine is the "largest criminal penalty ever collected ... in the history of this office."

"Half is going to Uncle Sam [and] half is going ... to benefit Ohio's regulated utility customers," the prosecutor explained.

Patel also spoke about the 501(c)(4) charitable corporation used by FirstEnergy to funnel the bribes used to pass House Bill 6, the bailout legislation.

"You all see a lot of social welfare going on?" he asked reporters. "I don't. We can do better."

Hoffman called the agreement "historic," and said "public corruption is intolerable" during his brief remarks.

Householder, former speaker of the Ohio House of Representatives, was arrested in July 2020 and later indicted on federal money-laundering charges. He has pleaded not guilty.

Several of his political advisers and co-defendants also pleaded not guilty to racketeering charges in August 2020. Householder was formally expelled from the Ohio House last month.

Prosecutors say FirstEnergy funneled more than $60 million in bribes to Householder through the nonprofit Generation Now as part of an effort to pass HB 6, which bailed out two of its nuclear power plants.

The enterprise is believed to be the largest bribery scheme in Ohio political history, and the power company admitted its role on Thursday in court filings.

"FirstEnergy Corp. acknowledged in the deferred prosecution agreement that it paid millions of dollars to an elected state public official through the official's alleged 501(c)(4) in return for the official pursuing nuclear legislation for FirstEnergy Corp.'s behalf," the press release said.

The company has also been sued in federal court on racketeering claims by a class of Ohioans. A federal judge denied FirstEnergy's motion to dismiss the case in February, ruling that utility surcharges applied after the passage of HB 6 constitute a concrete injury that gives the class standing.

FirstEnergy will be required to produce a list of all payments made to charitable organizations within the next 30 days, and must "improve corporate compliance moving forward," according to the press release.

The company has fired six high-ranking executives in the wake of the charges against Householder and the disclosure of the bribery scheme, including CEO Chuck Jones.

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