CINCINNATI (WXIX) – A corruption investigation into a $61 million bribery scheme that has resulted in the convictions of four people including Ohio’s former House speaker and now an 11-count indictment against the state’s former top utility regulator is going after millions from a dark money group that also was involved, court records show.
Federal officials are suing want $6,475,426.61 forfeiture from two PNC Bank accounts belonging to Partners for Progress Inc. because the non-profit group received “proceeds traceable to conspiracy to commit honest services wire fraud,” Assistant U.S. Attorney Deborah Grimes wrote in a newly filed complaint.
This is another new development in what federal officials have said is likely the largest money laundering scheme ever against the people of the state of Ohio.
Partners for Progress is a political organization used by FirstEnergy to help fund the House Bill 6 bribery scheme, prosecutors have said.
The group funneled millions from FirstEnergy Corp. to former Speaker Larry Householder’s efforts to gain control of the Ohio House as FirstEnergy sought a financial bailout from lawmakers to save its nuclear plants, federal court records show.
Partners in Progress, according to prosecutors, was controlled by and operated for FirstEnergy’s benefit.
This money that federal authorities are now trying to gain full control of was seized in 2021 as part of the federal investigation against Householder and three co-conspirators who have since been convicted of engaging in a racketeering conspiracy.
FirstEnergy has admitted to and agreed to pay a $230 million fine for “conspiring to commit honest services wire fraud” as part of a deferred prosecution agreement with federal officials. The company also agreed to pay the more than $6.4 million now being sought.
FirstEnergy said it paid Sam Randazzo, the now former chairman of the Public Utilities Commission of Ohio (PUCO) a $4.3 million bribe to use his position to save the company hundreds of millions with favorable rulings. Randazzo’s attorney has always denied this.
Randazzo made his initial court appearance Monday hours after his indictment was unsealed. He and his lawyer declined to comment afterward.
Partners for Progress was founded by former FirstEnergy lobbyist Dan McCarthy in 2017. He served as its president until he resigned in late 2018.
In early 2019, Gov, Mike DeWine appointed McCarthy to his administration as his top lobbyist, the legislative director.
McCarthy has not been accused of any wrongdoing. He quit the governor’s administration in 2021, citing “the pace and grind” of the job, according to his resignation letter, and has been working as a state government lobbyist.
In May, DeWine appointed him to a four-year term on the Ohio Senate Racing Commission.
His biography on the commission’s website does not mention Partners in Progress.
It states:
“Principal at North Hill Consulting, McCarthy most recently served as Governor DeWine’s Legislative Director. Previously he was employed by and eventually owned The Success Group, one of Ohio’s largest and most successful independent lobbying firms. He served two years as a legislative aide in the House Democratic Caucus. An avid horseplayer and former thoroughbred owner, his horses have won at tracks throughout the country including Saratoga, Churchill Downs, Gulfstream Park, and Keeneland.”
Partners for Progress Inc. worked for the “advocacy in support of nuclear power and the power generation in general,” according to its tax forms.
These organizations are referred to as “dark money” groups because they don’t have to disclose who their donors are.
This new legal action details the dark money group’s role in the scheme as orchestrated in part by FirstEnergy Corp. executives, former CEO Chuck Jones (who is referred to as “Executive 1″) and former vice president Michael Dowling (”Executive 2″), along with Householder, who is dubbed “Public Official A .”
“Although Partners for Progress appeared to be an independent 501(c)(4) on paper, in reality, it was controlled by certain former FirstEnergy Corp. executives, who funded it and decided its payments to entities associated with public officials,” the complaint states.
“For example, FirstEnergy executives directed the formation of Partners for Progress and decided to incorporate the entity in Delaware, rather than Ohio, because Delaware law made it more difficult for third parties to learn background information about the entity.
“Certain First Energy Corp. executives also were involved in choosing the three directors of Partners for Progress, two of whom were FirstEnergy Corp. lobbyists. Before Partners for Progress was formally organized, Executive 2 directed that $5 million be designated for an unnamed 501(c)(4) in December 2016.
“FirstEnergy Corp. exclusively funded Partners for Progress through payments from FirstEnergy Service, which totaled approximately $25 million from 2017 to 2019, approximately $15 million of which was paid to Generation Now,” the complaint alleges.
“Certain former FirstEnergy Corp. executives directed Partners for Progress to make payments in 2018, 2019 and 2020, including payments to Generation Now, which helped conceal FirstEnergy Corp. as the source of the payments from the public.”
In other new related developments, attorneys for FirstEnergy shareholders who are plaintiffs in a civil suit over the House Bill 6 scandal have subpoenaed records from DeWine.
They also want to schedule a deposition with Lt. Gov. Jon Husted early next year between Feb. 28 and March 19, according to copies of the records his office swiftly released to FOX19 NOW on Tuesday upon public record request.
Like McCarthy, there has been no indication from federal officials that DeWine or Husted have done any wrongdoing or are objects of their investigation.
We reached out to DeWine’s spokesman on Monday in light of Randazzo’s indictment.
“While our office was not privy to the indictment and have not yet reviewed it, the indictment alleges very serious acts,” his spokesman, Dan Tierney, responded. “Our office has full faith in the criminal justice system to adjudicate these serious allegations in an appropriate manner.”
FOX19 NOW requested comment Tuesday from McCarthy, a spokesman for DeWine and a spokeswoman for Husted about the civil case and forfeiture complaint.
“We’re aware of the civil investor lawsuit against First Energy,” said Husted’s spokeswoman, Hayley Hayley Carducci. “The Lt. Governor has already provided public records pertaining to this, and we will continue to comply as we have done in the past. There’s no new information to disclose.”
She referred questions about Randazzo to DeWine’s spokesman.
As for Jones and Dowlin, neither has been charged but their attorneys have written in civil court records that they face potential indictments so they should not have to be deposed but a federal judge disagreed and refused to postpone them.
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