An energy company at the center of a $60 million bribery scheme in Ohio, FirstEnergy Corp., has been directed by the U.S. Securities and Exchange Commission to pay a $100 million civil penalty for misleading investors about its involvement in the scandal. The Akron-based company was found to have violated antifraud provisions by misrepresenting its role in the political corruption scheme and failing to disclose related payments, as per the SEC.
The SEC's cease and desist order highlighted that the utility's former CEO had made a series of misrepresentations to investors in a news release and during a July 2020 earnings conference call. This action follows FirstEnergy's agreement to pay $20 million to avoid criminal charges in a deal with state prosecutors.
The bribery scheme revolved around FirstEnergy's efforts to persuade state lawmakers to pass a $1 billion bailout for two of its affiliated nuclear plants and to defend the bill from a repeal effort. Former executives, including CEO Chuck Jones and Senior Vice President Michael Dowling, were indicted in April as part of the investigation. Both individuals were terminated in October 2020 for violating company policies and code of conduct.
Former House Speaker Larry Householder, who received a 20-year sentence for orchestrating the scheme, and lobbyist Matt Borges, sentenced to five years, were among those involved. The scheme involved using $60 million in covertly funded FirstEnergy cash to support Householder's preferred Republican candidates and secure the passage of the tainted energy bill.
FirstEnergy admitted to its role in the bribery scheme in a deferred prosecution agreement with the U.S. Department of Justice in July 2021. As part of the agreement, the company committed to paying $230 million in penalties and implementing a series of reforms within three years to avoid criminal prosecution on a federal conspiracy charge.
