FirstEnergy will pay $100 million to resolve an investigation by the U.S. Securities and Exchange Commission related to bribes involving the passage of legislation in Ohio that in part aimed to prop up financially struggling nuclear power plants, the Akron, Ohio-based utility company said Thursday.
FirstEnergy previously paid the U.S. $230 million to settle criminal charges stemming from the H.B. 6 political corruption scandal.
From 2017 to 2020, FirstEnergy and FirstEnergy Solutions paid about $60 million to Generation Now, an entity controlled by Larry Householder who was elected speaker of the Ohio House of Representatives in January 2019, the SEC said in a settlement order issued Thursday.
The payments to GenNow aimed to help Householder get elected as speaker; help Householder gather support for H.B. 6; defeat a referendum effort aimed at placing a measure to repeal H.B. 6 on the Ohio ballot; and, fund a term-limit initiative led by Householder, which could have allowed him to remain in power for up to 16 additional years, the SEC said. Householder is serving a 20-year term in federal prison.
In July 2020, FirstEnergy violated the antifraud provisions of the Securities Act and the Securities Exchange Act by making misrepresentations about its role in the bribery scheme to investors in an earnings call and in a filing with the SEC, the commission said.
Also, FirstEnergy failed to keep accurate books and records and failed to have and maintain an adequate system of internal accounting controls with respect to payments to third-party organizations, the SEC said.
In deciding to accept FirstEnergy’s settlement offer, the SEC said it considered the fact that FirstEnergy provided “substantial cooperation to the commission’s staff throughout its investigation, including by proactively sharing facts, providing regular updates and analyses, and identifying key documents.”
FirstEnergy also put in place a new compliance and ethics program; revised its political activity and lobbying/consulting policies; terminated executives and employees who engaged in misconduct; and hired a new chief legal officer, the SEC said.
"We are pleased to have reached a resolution with the SEC as we continue to turn a new chapter," said Brian Tierney, FirstEnergy president and CEO, said in a statement. "Our focus today is investing in our regulated electric companies to improve the customer experience and support the energy transition."
In the second quarter this year, FirstEnergy reserved $100 million in anticipation of the settlement agreement.
