A huge Ohio utility paid Ohio Gov. Mike DeWine’s pick to be the state’s top utility regulator millions and the regulator, Sam Randazzo, proceeded to do favors for the utility that were worth at least hundreds of millions, the utility and federal prosecutors have said.
But more than a year into one of the biggest public-corruption scandals in Ohio history, the governor’s staff won’t say that DeWine regrets hiring Randazzo in the first place.
When the scandal broke last July, then-House Speaker Larry Householder, R-Glenford and four associates were charged in what prosecutors said was “likely the largest bribery and money-laundering scheme ever in the state of Ohio.”
They said Akron-based FirstEnergy and others funneled $61 million through 501(c)(4) “dark money” groups and into an effort to pass a $1.3 billion package that would bail out two aging nuclear reactors, two aging coal plants and provide what amounted to a $102 million-a-year subsidy for FirstEnergy. It also gutted renewable and energy efficiency standards.
More recently, Randazzo’s role has come increasingly into focus. He hasn’t been charged and last week he again denied wrongdoing.
But he resigned late last year after the FBI raided his Columbus condo. And he featured prominently in a deferred prosecution agreement signed last month both by FirstEnergy and the U.S. Attorney’s office.
It said that Randazzo was paid $22 million over the years under a consulting agreement with FirstEnergy — including $4.3 million just weeks before DeWine appointed him as chairman of the Public Utility Commission of Ohio. The agreement also quoted from text messages in which former FirstEnergy executives discuss the payment with Randazzo and in which Randazzo tells them, “you guys are welcome anytime and any whereI [sic] can open the door.”
Despite the fact that Randazzo was supposed to be a neutral regulator, the deferred prosecution agreement said he helped write a provision in the bailout legislation that was worth $102 million a year for FirstEnergy and he helped delay a 2024 rate review so that the subsidy would remain in place after that.
But even with the admissions from a utility that said it was coming clean and paying $230 million in fines, DeWine Press Secretary Dan Tierney wouldn’t say that the governor regretted hiring Randazzo as PUCO chairman.
“There’s an investigation process that’s going on that we need to respect and generally, having been on both sides of these things before, it’s just judicious not to comment in the middle on these things,” Tierney said in an interview last week. “But with the information that was available at the time, the governor said why he made that particular choice.”
The governor has also been reluctant to criticize others in his orbit who figure in the bailout scandal.
Randazzo has said Laurel Dawson helped recruit him to be a PUCO commissioner. Later, as DeWine’s chief of staff, she learned of the $4.3 million payment by FirstEnergy to Randazzo last October. But she didn’t tell DeWine for two-and-a-half weeks and only then after the FBI had raided Randazzo’s condo, according to the administration.
DeWine still supports Dawson, who now serves as counselor to the governor, Tierney said last month.
The governor also has confidence in Dan McCarthy, who as a FirstEnergy lobbyist founded Partners for Progress, a dark money group that Acting U.S. Attorney Vipal J. Patel said was essential to carrying out the bailout conspiracy.
While McCarthy was still president, the first millions of FirstEnergy dollars moved through Partners for Progress and into Generation Now, a separate dark money group that has since pleaded guilty to its role in the conspiracy. McCarthy resigned as president of Partners for Progress to become DeWine’s legislative affairs director, a post from which he helped to pass the tainted bailout legislation.
The closest Tierney would come to criticizing Randazzo was to point out that in his place, DeWine appointed Jenifer French, a former Franklin County Common Pleas judge without deep experience in utilities, but with lots of experience making impartial judgments.
In May, French drew objections from some lawmakers and the state’s official utility watchdog when she claimed that for the most part, the PUCO couldn’t build in refund mechanisms when it grants rate increases.
Sen. Mark Romanchuk, R-Ontario, disagreed. He said that since 2009 the PUCO has allowed $1.5 billion in rate increases that were later ruled to be unlawful — and because the PUCO wouldn’t require refund mechanisms the utilities got to keep the money.
This story was republished from the Ohio Capital Journal under a Creative Commons license.
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