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Tuesday, July 27, 2021

DeWine Says He Didn't Know About Alleged $4.3 Million Bribe of Utility Regulator He Appointed Until FBI Raid, Resignation

Posted By on Tue, Jul 27, 2021 at 8:08 AM

click to enlarge Sam Randazzo - THE OHIO CHANNEL
  • The Ohio Channel
  • Sam Randazzo

Gov. Mike DeWine distanced himself Monday from a utility regulator he appointed who was accused last week of accepting millions in bribes from FirstEnergy Corp.

FirstEnergy said in a court filing last week that it paid Sam Randazzo $22 million in consulting fees in the decade leading up to his appointment as chairman of the Public Utilities Commission of Ohio.



This includes a $4.3 million payment, sent shortly before DeWine appointed Randazzo in early 2019, to hand down rulings favorable to the company. The company was under no legal obligation to make the payment, the court filing states.

Randazzo has not been charged with a crime.

DeWine, answering questions on the filing for the first time, said while he didn’t know about the $4.3 million payment, “everybody” knew that Randazzo worked for FirstEnergy during the appointment process.

“I knew he worked for FirstEnergy,” DeWine said. “What I knew was the relationship was over with, that would have been the important thing to me. Whether or not it had been six months or whatever period of time it had been. Everybody knew Sam Randazzo had worked for FirstEnergy, so it wasn’t an issue. My understanding was that relationship had been terminated.”

In 2019, the PUCO — with Randazzo at the helm — issued an order reversing a requirement that FirstEnergy undergo a rate review in 2024, which would entail the company opening its books to regulators.

Days before he entered the order, a FirstEnergy executive said to another company executive in a text message Randazzo was going to make the rate review “go away,” according to the court filing. The executives saw the rate review as a threat to future revenues. One day after the PUCO issued the order, “Executive 1,” thanked Randazzo via text message, attaching an image showing the company’s stock price increasing.

Despite admitting knowledge of Randazzo’s work history with FirstEnergy, DeWine brushed aside a question about why he would appoint someone with known financial ties to a utility company to regulate that company.

“You say financial relationship, I would describe it as, ‘He worked for them,’” DeWine said. “He did work for them and he was paid for that. We knew that, everybody knew that. So there’s no new information.”

A passage in the court filing states that FirstEnergy executives, texting one another, said court records filed at the time disclosing Randazzo’s ties to FirstEnergy were a bullet that “grazed the temple” and “Forced [State Official 1]/[State Official 2) to perform battlefield triage.”

The anonymous identifications raise the specter of prosecutors broadening the scope of their probe. Alongside the FirstEnergy deal, prosecutors have already racked up related guilty pleas from lobbyist Juan Cespedes as well as Jeff Longstreth, a political adviser to House Speaker Larry Householder, R-Glenford. They also secured indictments against Householder and lobbyists Matt Borges and Neil Clark.

Householder and Borges have pleaded not guilty. Clark died by suicide earlier this year.

DeWine said he’s not aware of himself or any member of his office appearing in the deferred prosecution agreement under a pseudonym but noted that he only read the document “quickly.”

When asked when he first learned of the $4.3 million payment, DeWine said it was October 2020. This would be one month before the company, under heavy scrutiny by the DOJ, disclosed the payment to the U.S. Securities and Exchange Commission. The disclosure coincided with an FBI raid on Randazzo’s condominium.

When asked why he kept the information quiet for a month, DeWine seemed to walk back the remark, saying he was unsure of the dates but his “operable point” was he didn’t know about the payment before hiring Randazzo.

Dan Tierney, a spokesman for the governor, clarified in an interview later Monday evening that Randazzo called DeWine’s chief of staff, Laurel Dawson, in late October and informed her of a “large” payment he received from FirstEnergy as a means to terminate his contract. The governor, however, only learned of the payment after agents raided Randazzo’s home, according to Tierney.

DeWine said no one from FirstEnergy pushed him to appoint Randazzo. When asked the same of Lt. Gov. Jon Husted, he said he wasn’t aware of that. Husted was not pressured by FirstEnergy to appoint Randazzo, a spokeswoman said in an email.

DeWine said he had no reason to deny a previous report from the Dayton Daily News detailing a dinner featuring DeWine, Husted, and FirstEnergy’s CEO Chuck Jones and Senior Vice President Mike Dowling on Dec. 18.

When asked if they discussed Randazzo’s appointment at the dinner, DeWine said he would need to check his calendar. Tierney said Monday evening that they’re still working on locating the calendar.

That same day, two FirstEnergy executives joined Randazzo at his condo to discuss “remaining payments under the consulting agreement and [Randazzo’s] candidacy for the open PUCO chair position,” according to FirstEnergy’s statement of facts.

Two court filings from May and December 2018 entered during the bankruptcy case of FirstEnergy Solutions, a wholly owned subsidiary of its parent company, detail FirstEnergy owing money to two companies that appeared in Randazzo’s financial disclosures.

Neither of those companies appear in a resume and cover letter Randazzo submitted to the PUCO, obtained in a public records request.

A FirstEnergy spokeswoman declined comment and referred to information enclosed in the deferred prosecution agreement.

Last summer, the DOJ accused then-House Speaker Larry Householder of accepting $61 million from FirstEnergy, using various pass-through entities to obscure the source, and spending it to engineer passage of House Bill 6. That legislation — which gutted Ohio’s renewable energy portfolio standards and energy efficiency standards for utilities, bailed out two coal plants owned by several utilities, and bailed out nuclear plants formerly owned by a FirstEnergy subsidiary — was worth an estimated $1.3 billion to FirstEnergy, according to prosecutors.

Last week’s filing seems to mark a shift in the investigation away from Householder and toward other officials like Randazzo (who helped draft HB 6, per court documents).

Randazzo could not be reached through his former employer, contact information on legal and lobbying disclosures, or a personal email and phone number accessed in a LexisNexis search.

A targeted Google search using Boolean terms identified only on report linking FirstEnergy and Randazzo during the era of his appointment: a January 2019 report from the Energy and Policy Institute. However, Randazzo had a well-known history as an energy lawyer appearing before the PUCO and as a lobbyist, representing fossil fuel companies and combatting renewable energy projects.

“Sam Randazzo was not some guy hiding under a bush,” DeWine said. “Everybody who knew Sam Randazzo, here’s what they knew: he’s a subject matter expert.”

Originally published by the Ohio Capital Journal. Republished here with permission.

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