On Friday, a federal judge denied an appeal from FirstEnergy Corp., which could result in the disclosure of two internal investigations regarding the company’s bribery scandals. Despite fighting to keep the investigations confidential for the past year, the company’s efforts have been thwarted by the judge’s ruling.
After the arrest of Larry Householder, the former Ohio House Speaker and four other individuals who were accused of a scheme in which Householder allegedly received $61 million from FirstEnergy for personal and political gain in exchange for $1.3 billion bailout legislation, the company hired the law firms of Jones Day and Squire, Patton Boggs to investigate its executives’ actions. As per the orders of a special master and a federal judge, FirstEnergy has been instructed to provide these findings to plaintiffs who are suing the company.
US District Judge Algenon Marbley issued a ruling on Friday that prevents FirstEnergy from appealing the release of certain documents to a higher court. Although this ruling doesn’t immediately require the company to release the records, it is a step closer to potential transparency. When asked for comment on whether FirstEnergy will comply with the ruling and hand over the documents, the company declined to provide a statement.
Jennifer Young, the spokeswoman, stated that they are unable to comment due to the ongoing litigation.
Although Friday’s order has been issued, it does not mark the conclusion of the case. The civil case is currently on hold as other pre-trial matters are resolved during the discovery process. Previous orders requesting the release of the investigations have generated excitement and hope, but ultimately no significant information has been made available yet.
In 2020, the company terminated CEO Charles Jones, senior vice president of product development, marketing and branding Dennis Chack, and senior vice president of external affairs Mike Dowling, citing its internal review. The investigation in 2021 led to the company’s agreement with the U.S. Attorney’s Office for the Southern District of Ohio, where FirstEnergy agreed to pay a $230 million penalty. Additionally, the company admitted to bribing Householder and Sam Randazzo, a top appointee who was responsible for regulating FirstEnergy and its peers.
Jones and Dowling currently face criminal charges for allegedly bribing Randazzo. They have both pleaded not guilty. Randazzo, who was accused of accepting their bribes, passed away before the trial by suicide. Householder, who was involved in the affair, is currently serving a 20-year prison sentence. Additionally, three other men have either pleaded guilty or been convicted in connection with the scandal.
Investors in FirstEnergy have filed a securities fraud lawsuit, following the company’s plummeting share price after news of the arrests surfaced. In June 2023, the investors initiated legal action to obtain copies of the investigations conducted alongside the criminal probes. However, FirstEnergy fiercely opposed this, citing attorney-client privilege as a reason to protect the reports. In their efforts to secure the release of the internal investigations, both Jones and Dowling joined the plaintiffs as individuals.
In November, the company was ultimately supported by a special master, along with Marbley in May. The investigations were deemed to offer some legal value, but they were also found to serve a business and human resources purpose, which caused the privilege to be eroded.
The legal arguments in this case have taken on a higher level of importance due to the involvement of the Ohio Consumers’ Counsel. This state agency has been a staunch advocate for transparency, refunds for customers, and holding the company accountable for their actions. In an agreement with FirstEnergy, the agency will receive all records that the company provides to the plaintiffs during the pre-trial evidence exchange process. Since the Ohio Consumers’ Counsel is a state agency, these records are accessible through public records requests, while most of these records are typically kept confidential until trial.
Consumers Counsel Maureen Willis, who oversees the office, expressed approval of Judge Marbley’s decision to reject FirstEnergy’s latest effort to prevent public access to its HB6 internal investigation reports, stating, “Judge Marbley got it right.” It is high time for the truth to be revealed, and Willis wonders, “What is FirstEnergy concealing from consumers?”