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Analysis: Where are Ohio’s guardrails against corruption?




Photo by Doris Morgan on Unsplash

This is the first of three analysis pieces from former PUCO Commissioner Ashley C. Brown analyzing the failures and deficiencies in Ohio’s utility regulation and anti-corruption guardrails.

Perhaps the most notable — but least commented on — aspect of the House Bill 6 bribery scandal is the almost complete absence of any meaningful state guardrails against corruption. Given that First Energy, the confessed briber, owns utilities regulated by the state, the absence of effective guardrails is especially noteworthy. The facts that have emerged, and the actions undertaken, have been almost exclusively due to federal investigators and prosecutors.

Ohio has a long list of institutional safeguards that failed to function.

At least two county prosecutors have jurisdiction over the scandal but did nothing. The Ohio Inspector General — responsible for investigating executive branch corruption — the Ohio Ethics Commission, and legislative ethics authorities with relevant powers all did nothing.

It took the Ohio House more than a year to expel a member indicted for bribery. The legislature has only partially repealed HB6, a bill whose passage was heavily influenced by bribery. The governor’s office, packed with former FirstEnergy personnel or their relatives, not only took no action regarding the scandal occurring on its watch, but also could not even bring itself to comment on the felony racketeering convictions last week, much less act, on the scandal.

The Nominating Council, charged with screening PUCO candidates, did not even bother to check conflicts of interest of the persons whose names it submitted to the governor for appointment.

The only state agency which made a systemic effort to uncover facts has been the Office of Consumers’ Counsel, but its ability to do so has been severely constrained by roadblocks erected by the PUCO and, ironically, by the U.S. Attorney at the express request of FirstEnergy.

Perhaps the most notable failure of the state’s institutional guardrails is the PUCO, the agency charged with oversight of Ohio’s electric utilities.

Its initial failure can only be partially explained by the fact that FirstEnergy has admitted to bribing the then-Chair FirstEnergy admitted bribing more than $4 million dollars (That former Chair, who, to date, has not been charged, denies taking a bribe).

The PUCO chair, however, lacked the authority to act on his own. It takes three of the five commission members to take action, but the other four Commission members simply followed the chair.

With the single exception of a dissent by one commissioner on a rehearing motion, the other four commissioners voted with the chair that FirstEnergy has confessed it bribed, on every matter involving that company, and did so without any public discussion.

They also failed to object to the suppression of consultant reports that raised red flags about HB6-related matters. They did so, even though, as in now disclosed email exchanges, have revealed, PUCO personnel had suspicions as to where the chairman’s loyalties lay.

Once it was revealed that FirstEnergy was operating a criminal enterprise, and the PUCO had a new chair, the commission failed to use the many tools it has, such as management audits, show cause orders, license revocation inquiries, or receivership proceedings.

Instead, it opened four separate, not irrelevant but somewhat marginal inquiries, which enabled the commission to both delay and play regulatory rope-a-dope to stymy intervenors such as Consumers’ Counsel, before happily acceding to the U.S. Attorney’s request to temporarily suspend all investigations.

The delay guarantees that consumers will keep paying more under a scheme derived by corrupt means, and that malefactors will continue to collect their ill-gotten gains.

Ashley C. Brown served for 10 years as a PUCO Commissioner. He recently retired after 28 years as Executive Director of the Harvard Electricity Policy Group at Harvard University’s Kennedy School. He is co-author of The World Bank’s Handbook on Evaluating Infrastructure Regulation, and has advised governments and conducted training in more than 25 countries on energy markets and regulation.

This commentary was republished from the Ohio Capital Journal under a Creative Commons license.

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