Politicial Bribes

Judge gives lawyers 24 hours to identify FirstEnergy executives who ordered political bribes

Further scuttling a proposed settlement for FirstEnergy shareholders, a federal judge asked their lawyers, within 24 hours, to answer his question about which company officials ordered what was described as the largest political corruption scheme in Ohio history.

FirstEnergy and its shareholders were close to settling the shareholder derivative lawsuit, announcing an agreement in February pending judicial review. He is asking FirstEnergy’s insurers to pay the company $180 million for damages suffered in the scandal. The proposed settlement would also exclude six board members when their terms expire and require corporate reforms related to “political and lobbying activities”.

U.S. District Judge John R. Adams, however, refused to approve anything until plaintiffs’ attorney answered a crucial question: Who at FirstEnergy ordered the $64 million in kickbacks? political de-wine?

Adams threatened to hold plaintiff’s attorney Jeroen Van Kwawegen in contempt for dodging the question earlier this month. Adams’ threat on March 11 ranged from professional sanctions to the removal of his role as shareholders’ attorney.

On Tuesday, Adams gave plaintiffs “one final opportunity” to answer his question in a sworn affidavit by noon Wednesday. In his order, Adams highlighted the public interest in the case: FirstEnergy, a publicly traded company, admitted to bribing officials. The public cannot trust or even value FirstEnergy’s corporate reforms if the company is allowed to leave such gaping plot holes, he said.

“It’s not just FirstEnergy’s trust that needs to be rebuilt,” Adams wrote. “This system of corruption has undoubtedly undermined the confidence Ohioans had in the political process used by their elected officials. The public has a right to know why the political process has been so easily corrupted.”

During the corruption campaign, some of the defendants named in the lawsuit received $105 million in compensation, according to Adams. (Adams did not offer specific dates, but prosecutors roughly trace events to between 2017 and 2019.)

The settlement agreement was announced the same day those executives were due to begin their depositions, giving them a loophole to answer questions under oath. None of them have been criminally charged. Adams’ order even lists their specific compensation, including:

  • Charles Jones, former CEO of FirstEnergy: $55 million
  • James Pearson, former vice president and treasurer of FirstEnergy: $23 million
  • Steven Strah, current CEO of FirstEnergy: $17 million
  • Former FirstEnergy CEO and Senior Vice President Robert Reffner: $2.5 million

“As a result, people who received over $100 million in compensation were not required to sit in a room, take an oath, and answer honestly for the actions they took,” he said. -he declares. “The settlement also reveals that none of these alleged wrongdoers will be required to contribute even $1 to the final settlement.”

The settlement calls for the $180 million to be deducted from court-ordered attorneys’ fees and costs for the plaintiffs. According to Adams, the settlement agreement allows plaintiffs’ attorneys to seek up to approximately $48 million in attorneys’ fees and expenses.

A FirstEnergy spokeswoman declined to comment. Kwawegen did not immediately respond to an email, nor did a spokeswoman for the U.S. Attorney for the Southern District of Ohio.

Last week, attorneys for FirstEnergy and its shareholders argued they could not answer Adams’ question because it would violate confidentiality agreements associated with pre-trial proceedings and settlement talks. The shareholders’ attorneys said their obligations were to make shareholders whole, not to promote the public interest through transparency.

In July 2021, FirstEnergy, as a company, entered into a Deferred Prosecution Agreement with the United States Department of Justice. The company agreed to cooperate with the government’s criminal investigation and pay a $230 million fine to potentially avoid a wire fraud charge against it.

In a lengthy statement of facts attached to the deal, FirstEnergy admitted to paying $60 million to a “dark money” nonprofit secretly controlled by former House Speaker Larry Householder to adopt the project. House Bill 6, energy policy review legislation worth an estimated $1.3 billion to the company. . The company also admitted paying $4.3 million to Sam Randazzo, a former state utility regulator, just before Randazzo was named to the job by Gov. Mike DeWine.

The company’s admissions, Adams said, are inconclusive as to the guilt of the parties involved, but “they provide a clear and concise roadmap for litigating this case fully and fairly.”

The householder has pleaded not guilty and is awaiting trial scheduled for January 2023. Randazzo has not been charged and has denied wrongdoing.

Two Householder allies, a lobbyist and a political adviser, pleaded guilty to their role in the scandal. The central nonprofit Householder, allegedly controlled to advance the scheme, also pleaded guilty.

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