As it sought a massive, corrupt bailout in Ohio, Akron-based FirstEnergy also spent lavishly on Trump-aligned dark money groups and at hotels and golf courses owned by the former president, a new report said this week.
Trump and his aides wanted to provide a federal bailout for the company’s coal and nuclear plants, but they hit a brick wall — first in the form of a regulator, and then by public opposition to corporate bailouts, the report said.
Done by the Energy and Policy Institute, the report is a deep dive into otherwise-secret records that have been pried out as a result of prosecutions and litigation around the Ohio bailout scandal. Called one of the biggest bribery scandals in Ohio history, FirstEnergy funneled $61 million through dark money groups to pass a $1.3 billion ratepayer bailout through the state’s gerrymandered legislature and then protect it from popular opposition.
Former Ohio House Speaker Larry Householder is serving a 20-year federal prison sentence as a consequence of his involvement, former state Republican Party Chair Matt Borges is serving five years and two others have pleaded guilty and await sentencing. Two others were charged and then died by suicide.
Former FirstEnergy CEO Chuck Jones and Vice President Michael Dowling face state felony charges related to their involvement in the scandal. Testimony during last year’s federal trial in Cincinnati showed that the pair were desperate for a bailout anywhere they could get one.
FirstEnergy was heavily invested in coal and nuclear generation when the natural gas boom and the advent of cheap renewables made them uncompetitive. In other words, FirstEnergy’s millionaire leaders had made poor business decisions, and they wanted to escape the consequences.
So by 2016, the executives were seeking bailouts to prop up the plants so they could spin them — and their environmental liabilities — off.
Starting in 2015, FirstEnergy had already contributed $1.25 million to the Cleveland Host Committee to support the 2016 Republican National Convention in that city.
Then, nine days after Trump became the party’s nominee, FirstEnergy CEO Jones met on July 28, 2016 with Trump at Trump Tower. The two discussed electricity generation and how Trump could deliver on his “promise to save coal jobs,” according to a letter the Energy and Policy Institute obtained.
Some time after, Jones met Trump at a Canton fundraiser where Jones “did explain to Mr. Trump that while I was working behind the scenes to help his campaign, because of a (regulatory proceeding) in Ohio I could not be out front and he completely understood that,” Jones said in an email detailed in the report.
Trump’s campaign didn’t respond to questions for this story.
By late 2016, Jones and Dowling were courting Householder at World Series games in Cleveland. And after Trump’s election, they flew the now-imprisoned former speaker to Washington, D.C. aboard FirstEnergy’s corporate jet for Trump’s January 2017 inauguration.
By April 2017, FirstEnergy had engaged Avenue Strategies — a lobbying firm founded by former Trump Campaign Manager Corey Lewandowski — to help it get “federal relief for nuclear and coal-fired plants,” the Energy and Policy Institute report said. The following month, Lewandowski stepped away from the firm amid accusations that he was violating federal lobbying laws by not registering, Politico reported.
Lewandowski, who is again working for Trump, later denied that he lobbied on FirstEnergy’s behalf.
On May 1, 2017, FirstEnergy started really putting money into its efforts, paying $5 million to America First Policies, a 501(c)(4) dark money group founded and run by supporters of Trump. The company financed its bribes in Ohio by pumping tens of millions through such groups, which don’t have to disclose their donors.
As Jones undertook his charm offensive, he used FirstEnergy money to enrich Trump personally. His expense reports show that on a July 2017 trip to Washington, D.C., Jones spent $1,400 on drinks, another $5,400 for dinner and $900 for a room at the Trump International Hotel, as well as $400 on caddie fees at the Trump National Golf Club.
And as he spread around the FirstEnergy largesse, Jones had broad interactions with Trump officials. They include Vice President Mike Pence, EPA Administrator Scott Pruitt, Chief of Staff Rick Dearborn, Chief Strategist Steven Bannon, White House Counsel Don McGahn, Energy and Environmental Policy Advisor Mike Catanzaro, and National Economic Council Director Gary Cohn and Deputy Director Jeremy Katz, according to documents assembled by the Energy and Policy Institute.
To save FirstEnergy’s power-generating subsidiary from bankruptcy, then-Energy Secretary Rick Perry in September 2017 proposed to allow special subsidies for coal and nuclear plants.
The Federal Energy Regulatory Commission rejected the proposal in early 2018, saying allowing it would upend wholesale markets for electricity generation. In other words, the regulator said it would give unfair special treatment to FirstEnergy and other companies that missed the boat on fracking and renewables.
In June 2018, Trump ordered Perry to use a provision in the Defense Production Act to prop up coal and nuclear energy — a step that could cost as much as $11 billion a year. That effort also collapsed as the (correct) public perception grew that both measures proposed by the Trump administration were corporate bailouts, the Energy and Policy Institute report said.
In 2018, Perry called on the states to bail out their own coal and nuclear plants.
Ohio did just that with the corrupt House Bill 6. Householder shepherded it through Ohio’s gerrymandered legislature and Gov. Mike DeWine signed it immediately.
Prosecutors haven’t accused them of wrongdoing, but DeWine, Lt. Gov. Jon Husted, Attorney General Dave Yost and Secretary of State Frank LaRose all played roles in the passage and protection of the billion-dollar bailout that they haven’t fully explained.
For its part, FirstEnergy entered into a deferred prosecution agreement with the Justice Department, admitted wrongdoing and paid a $230 million fine. It fired Jones and Dowling and now says it has new ethical standards.
However, a group of institutional investors suing the utility accuse it of trying to limit accountability to the two former top executives, Jones and Dowling.
FirstEnergy spokeswoman Jennifer Young was asked whether FirstEnergy thought it was proper to enrich Trump-aligned groups and Trump personally as it sought taxpayer bailouts from his administration. She was also asked whether it was proper for a regulated utility to — as Jones claimed — play political kingmaker for the ratepayers the utility serves.
“While we’re unable to respond to your specific questions due to ongoing litigation, it’s important to note that in early 2022, FirstEnergy Corp. adopted a new Political & Public Engagement Policy and Practice grounded in integrity and transparency to ensure principled political and public policy engagement by its Board of Directors, officers, employees, and those acting on the company’s behalf,” Young said in an email. “Positions we take will align with the company’s core values and responsibilities to shareholders and other stakeholders.”
She added, “Led by a reconstituted Board of Directors and executive team, FirstEnergy has taken significant steps to move the company forward and put past issues behind us. Today, FirstEnergy is a different, stronger company with a sound strategy, a highly effective compliance program and a companywide culture of ethics, integrity and accountability.”
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