FirstEnergy’s former headquarters in downtown Akron
Tribune News Service
COLUMBUS, Ohio – A federal judge blocked an appeal Friday from FirstEnergy Corp., potentially leading to the release of two internal investigations into the company’s bribery schemes that it has spent the past year fighting to keep secret.
Following the arrest of ex-Ohio House Speaker Larry Householder and four accomplices – all accused of advancing a plot in which Householder took $61 million from FirstEnergy for personal and political gain in exchange for $1.3 billion bailout legislation – the company brought in the law firms of Jones Day and Squire, Patton Boggs to investigate its executives’ conduct. A special master and federal judge have previously ordered FirstEnergy to turn those over to plaintiffs suing the company.
The ruling Friday from U.S. District Judge Algenon Marbley doesn’t immediately force the release of the documents but blocks the company from appealing the issue to a higher court. FirstEnergy declined to comment when asked if it will now hand over the records.
“We are unable to comment due to pending litigation,” said spokeswoman Jennifer Young.
Friday’s order isn’t necessarily the end of the road. Discovery – the evidence exchange process – has been paused in the civil case as other pre-trial issues are worked out. And previous orders seeking the investigations’ release yielded optimism and hype, but no grand release.
The company cited its internal review in 2020 when it fired CEO Charles Jones; senior vice president of product development, marketing and branding Dennis Chack; and senior vice president of external affairs Mike Dowling. It also cited the investigation in 2021 when it announced its agreement with the U.S. Attorney’s Office for the Southern District of Ohio, where the company agreed to pay a $230 million penalty and admitted to bribing Householder along with Sam Randazzo, a top appointee responsible for regulating FirstEnergy and its peers.
Jones and Dowling have since been criminally accused of bribing Randazzo and pleaded not guilty. Randazzo was accused of taking their bribes but died by suicide before trial. Householder is serving a 20-year prison sentence. Three other men have either pleaded guilty or been convicted in connection with the affair.
Alongside the criminal probes, a cadre of investors in FirstEnergy has sued alleging securities fraud, given losses the investors incurred as news of the arrests tanked the company’s share price. In June 2023, the investors began mounting a legal effort to obtain copies of the investigations. FirstEnergy fought this relentlessly, claiming the reports are protected by attorney-client privilege. Both Jones and Dowling, as individuals, joined the plaintiffs in seeking the release of the internal investigations.
A special master eventually sided with the company in November, as did Marbley in May. They found the investigations may have provided some legal value, but they also served a business and human resources purpose, which erodes the privilege.
The niche legal arguments take on higher stakes because the Ohio Consumers’ Counsel – a state agency that has fought for more transparency, refunds for customers, and consequences for the company – entered an agreement with FirstEnergy to receive all records the company provides to the plaintiffs in the pre-trial evidence exchange process. As a state agency, this makes the records available via public records requests, while most such records remain confidential until trial.
“Judge Marbley got it right – shutting down FirstEnergy’s latest attempt to block public disclosure of its HB6 internal investigation reports,” said Consumers’ Counsel Maureen Willis, who directs the office. “It’s way past time for the facts to come out. What is FirstEnergy hiding from consumers?”
