FirstEnergy Hit With Wire Fraud Accusation, Will Pay $230 Million

CINCINNATI, OH — FirstEnergy agreed to pay a $230 million monetary penalty and sign a deferred prosecution agreement after being charged with conspiring to commit honest services wire fraud, the Department of Justice announced Thursday.

The agreement could result in dismissal of the charge, prosecutors said.

Thursday's announcement of charges against FirstEnergy stems from the investigation into House Bill 6, a nuclear bailout bill, which the Department of Justice previously described as the largest bribery scandal in Ohio political history.

House Bill 6 provided a $1.3 billion bailout for two FirstEnergy nuclear plants (now Energy Harbor plants) in Ohio. The legislation is now at the heart of a racketeering investigation involving Ohio House Speaker Larry Householder and other political figures.

"In today’s court filings, FirstEnergy Corp., an Akron, Ohio-based public utility holding company, admits it conspired with public officials and other individuals and entities to pay millions of dollars to public officials in exchange for specific official action for FirstEnergy Corp.’s benefit," the Department of Justice said.

FirstEnergy also acknowledged it used tax-exempt organizations to funnel money to elected officials to influence the vote House Bill 6, the Department of Justice said. Using the tax-exempt organizations allowed FirstEnergy to conceal its payments to elected officials, the Department of Justice added.

"This is a humbling moment for our company. And we should take this moment to recognize that this type of conduct, at the highest levels in the company, was wrong and unacceptable. We have to ensure that something like this never happens again," said FirstEnergy President and CEO Steve Strah in a statement.

Finally, in its deferred prosecution agreement, FirstEnergy acknowledged it paid $4.3 million to a second public official who then helped pass House Bill 6 and other legislative priorities for the company.

“FirstEnergy’s Board of Directors moved swiftly and decisively to investigate this matter and, along with the management team, has cooperated and will continue to fully cooperate with the U.S. Attorney’s Office that is investigating the matter,” said Donald T. Misheff, nonexecutive chairman of FirstEnergy’s board of directors."

The Department of Justice said FirstEnergy has cooperated with investigators, but must continue to do so under the terms of the deferred prosecution agreement. Within 60 days, the company must also pay $115 million to the United State and $115 million to the Ohio Development Service Agency's Percentage of Income Payment Plus Plan, which provides help to Ohioans paying regulated utility bills.

"Other terms in the agreement include publicly disclosing on its website any FirstEnergy Corp. contributions to 501(c)(4) entities and entities known by FirstEnergy Corp. to be operating for the benefit of a public official, either directly or indirectly, and making various provisions to improve corporate compliance moving forward," the Department of Justice said.