![FBI agents remove boxes of materials from PUCO Chairman Sam Randazzo’s condo in Columbus Nov. 17, 2020. - Photo courtesy of Daniel Konik/Statehouse News Bureau.](https://darealprisonart.news/wp-content/uploads/2023/08/randazzo-raid.jpeg)
Photo courtesy of Daniel Konik/Statehouse News Bureau.
FBI agents remove boxes of materials from PUCO Chairman Sam Randazzo’s condo in Columbus Nov. 17, 2020.
In early 2019, news of financial ties between Akron-based FirstEnergy and the man incoming-Gov. Mike DeWine had named to lead the Public Utilities Commission of Ohio began to spread. And as it did, FirstEnergy’s top executives feared they wouldn’t have a regulator they could control, according to documents filed in federal court late last week.
“Great. Now we have none on the list” of nominees, then-CEO Chuck Jones texted Vice President Michael Dowling. Jones later added, ruefully, “Always need a backup plan.”
As it happened, the nominee, Sam Randazzo, ended up being appointed to the commission after being paid $4.3 million by FirstEnergy. He proceeded to help draft a law providing the utility with a $1.3 billion bailout. The company spent another $60 million to pass and then to protect it from a citizen-initiated repeal in what law-enforcement officials have called one of the biggest bribery and money-laundering scandals in state history.
Randazzo, Jones and Dowling haven’t been charged in the scandal, but after a jury trial that convicted two others, two guilty pleas, and a suicide, the three men could be the next targets as federal authorities continue their probe.
If authentic, the communications filed on Friday indicate that the three met in Randazzo’s Columbus condo in December 2018. And they appear to show that the FirstEnergy executives agreed to pay Randazzo a large sum in exchange for favors when Randazzo became the state’s chief regulator.
Another communication 23 months later — just after the FBI searched the condo in November 2020 — shows Randazzo providing a friend “the number for my home which the FBI does not have.”
Demanding records
Lawyers for Randazzo, Jones and Dowling didn’t immediately respond to requests for comment Monday, but attorneys for the former executives have said in separate court filings that they believe the feds are investigating their clients.
The documents filed in federal court on Friday are part of a huge class-action suit against FirstEnergy, Jones, Dowling and a number of other defendants.
In a deferred prosecution agreement, FirstEnergy in 2021 agreed to pay $230 million and admitted wrongdoing, including by bribing Randazzo. But the class-action plaintiffs — large pension and investment funds — are arguing that the company violated securities law by not disclosing its corrupt conduct. And, they argue, the company lost much of its value when that conduct came to light, leaving investors holding the bag.
Randazzo has denied wrongdoing and he isn’t a defendant in the case, but the class-action plaintiffs want him to produce all communications relating to how he spent the $4.3 million he got from FirstEnergy just as he was poised to become its most powerful regulator.
The plaintiffs have been accusing Randazzo since April of foot-dragging. They obtained the messages they filed Friday from a third party and are pointing to them as examples of Randazzo’s lack of cooperation.
Early arrangements
The earliest of the messages was on Dec. 18, 2018, and it appears that the three men had recently met in the residence that the FBI later searched.
“Got it, Sam,” Dowling, then the FirstEnergy vice president, texted Randazzo. “Good seeing you as well. Thanks for the hospitality. Cool condo.”
The “got it” was in response to a column of numbers Randazzo sent that appear to indicate that he was expecting payments from FirstEnergy through 2024:
2019 — 1,633,3332020 — 600,0002021 — 600,0002022 — 600,0002023 — 600,0002024 — 300,000
A seventh entry said “Total 4,333,333” — an amount equal to what FirstEnergy said was a bribe.
The following day, Jones, the CEO, told Randazzo that he wouldn’t have to wait that long for the money, according to the filings. Jones also made it clear that he expected access to Randazzo.
“We’re going to get this handled this year, paid in full, no discount,” the message says. “Don’t forget about us or Hurricane Chuck may show up on your doorstep! Of course, no guarantee he won’t show up sometime anyway.”
Randazzo’s response seemed to be meant to reassure — and he linked the money to favors.
“Made me laugh — you guys are welcome anytime and anywhere I can open the door,” he said. “Let me know how you want me to structure the invoices. Thanks.”
Connections
But on Jan. 30, 2019, problems popped up with Randazzo’s nomination.
FirstEnergy’s nuclear-owning subsidiary, FirstEnergy Solutions, was going through bankruptcy and it had listed the Sustainability Funding Alliance of Ohio on one of its disclosures. Randazzo controlled the group and FirstEnergy had paid him millions through it in the past. Now the press was on to the matter.
“Chuck — Sam Randazzo is going to pull out of the PUCO process ASAP and it’s related to a disclosure on a (FirstEnergy Solutions) bankruptcy filing,” Dowling texted Jones, according to the documents filed Friday. “Reporters called (FirstEnergy) today inquiring about the relationship between (FirstEnergy Solutions) and a group called the Sustainability Funding Alliance of Ohio. You can guess the rest.”
That’s when Jones lamented not having a “backup plan” in the event that Randazzo was not seated on the utility commission. Dowling agreed.
“This is awful,” he wrote. “The FirstEnergy Solutions bankruptcy filing names that group and Sam names the same group on a financial disclosure statement. Unreal. I don’t know why it was listed in the (FirstEnergy Solutions) bankruptcy filing. The payments we made year-end ’18 came from (FirstEnergy) Corp. Services.”
Dowling was ready to throw Randazzo under the bus if the connection proved to be an embarrassment to the incoming DeWine administration.
“They’re going to be mad at Sam (and hopefully not us) for not disclosing the financial relationship,” Dowling wrote. “That’s Sam’s responsibility.”
A day later, however, the financial connection between FirstEnergy and Randazzo apparently wasn’t sufficiently embarrassing and he was picked to head up the PUCO.
“A bullet grazed the temple,” Dowling told Jones, according to one of the texts filed last week.
“Forced DeWine/Husted to perform battlefield triage,” Jones responded, referring to Lt. Gov. Jon Husted. “It’s a rough game.”
A still rougher game
In a trial held in Cincinnati from late January to mid-March, prosecutors put on witnesses and displayed communications describing Randazzo’s 2019 role in drafting House Bill 6, the bailout bill. Not only did it provide $1 billion to prop up two failing nuclear plants FirstEnergy was spinning off, it charged ratepayers about $100 million a year to insulate the company from an economic downturn. For FirstEnergy, it was easy money, in other words.
In June, U.S. District Judge Timothy Black sentenced former Ohio House Speaker Larry Householder, R-Glenford, to 20 years in prison for orchestrating the racketeering scandal. Former state GOP Chairman Matt Borges got five years for his role.
By November of 2019, HB 6 was on the books after FirstEnergy and a subsidiary plowed $36 million into a brutal, dishonest effort to turn back a citizen-initiated repeal. But the FirstEnergy executives weren’t done with Randazzo.
On Nov. 10, 2019, Jones texted a coal executive that another cloud loomed for FirstEnergy.
“And the (FirstEnergy) rescue project is not over,” Jones said, according to documents filed as part of the class-action suit. “At (Edison Electric Institute) financial conference. Stock is gonna get hit with Ohio 2024. Need Sam to get rid of the ‘Ohio 2024’ hole.”
That was an apparent reference to a requirement that FirstEnergy file a “rate case” with the PUCO in 2024. In such a proceeding, regulators assess a utility’s operations and make a judgment about whether its rates and revenues are reasonable.
FirstEnergy was apparently afraid they wouldn’t be. On Nov. 21, 2019, just 11 days after Jones expressed his concerns, the PUCO under Randazzo’s leadership issued an order saying it was “no longer necessary or appropriate” to require FirstEnergy to file a rate case.
The next day, Jones wanted to express his appreciation to Randazzo. He did so by sending the erstwhile regulator a list of prices for six energy stocks that day. FirstEnergy stocks were up 1.5%. The next highest was Avangrid, which was up 0.86%.
“Thank you!!” Jones wrote.
Randazzo replied, “Ha — as you know, what comes up may come down… Thanks for the note. Spoke to Mike (Dowling) last night.”
Then Jones said, “My Mom taught me to say Thank you.”
Flying high
By the start of 2020, things seemed to be going well for those who orchestrated the bailout.
FirstEnergy Solutions would emerge from bankruptcy in February as a separate company, Energy Harbor. The class-action plaintiffs argue that one of FirstEnergy’s major goals in the scheme was to prop up the nuclear plants, get them off their books and shed the liability of having to pay for a decades-long process to close and clean up after them.
At the same time, FirstEnergy was funneling millions more dark-money dollars into an effort to get the state’s legislature to put a constitutional amendment on the ballot. It would change the state’s term-limits so Householder could stay speaker for another 16 years — and presumably continue to do the utilities’ bidding.
But then in July 2020, it all crashed down.
On July 21, the FBI arrested Householder, Borges and other conspirators. By the next day, FirstEnergy stock had lost 34% of its value, the class-action plaintiffs contend.
FirstEnergy fired Jones and Dowling the following October. And then in November, 2020, Randazzo was forced to resign from the PUCO after the FBI searched his condo.
“Pretty stressful few days which started Monday at 6:00 when 10-12 FBI agents with their guns drawn announced their arrival at our home,” Randazzo emailed a friend on Nov. 21, according to the documents filed by the class-action plaintiffs. “But, Carol and I are handling it and doing better each day. Neighbors, friends (like you) family, PUCO staff and people I have worked for over the years have been great. Roger Sugarman (his attorney) is my new hero. So onward!”
Then Randazzo encouraged the friend to call him on the number he believed that the FBI didn’t have.
Originally published by the Ohio Capital Journal. Republished here with permission.
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