CLEVELAND, Ohio – Attorneys for FirstEnergy Corp. shareholders Wednesday identified two former senior executives at the Akron utility as people behind the payments in the House Bill 6 scandal.
The attorneys said in a filing that if the investors’ lawsuit had gone to trial, evidence would have shown that Charles Jones, the former chief executive officer, and Michael Dowling, who had led the company’s lobbying efforts, “devised and orchestrated FirstEnergy’s payments to public officials in exchange for favorable legislation and regulatory action.”
Neither Jones nor Dowling has been charged. Carole Rendon, an attorney for Jones, said the filing is not evidence. In an emailed statement, she said, “Mr. Jones did not engage in any unlawful conduct or violate any of FirstEnergy’s policies.”
Dowling’s attorney, John McCaffrey, declined to comment. In other civil filings, Dowling has denied wrongdoing.
Jones and Dowling were fired in October 2020, months after then-Ohio House Speaker Larry Householder and four allies were indicted on federal racketeering charges.
U.S. District Judge John Adams ordered attorneys for the investors to file by noon Wednesday the names of the people “who paid the bribes” in the tainted legislation. Adams made the order after attorneys attempted to sidestep his questions by claiming the confidentiality of the mediation process.
Investors, on behalf of the company, sued the utility’s directors and officers in the summer of 2020 before Adams. They alleged a lack of oversight that led to what authorities have called the largest bribery scheme in Ohio.
Similar cases are pending in U.S. District Court in Columbus and in Summit County Common Pleas Court.
The investors’ allegations, filed in what is known as a derivative lawsuit, stem from the $60 million in payments delivered to a nonprofit tied to Householder, a Republican. He has denied the allegations. His attorneys have called the payments political contributions.
In exchange for the payments, Householder and a group of allies pushed a $1.3 billion legislative bailout of two aging nuclear plants that had been owned by a former FirstEnergy subsidiary, according to court documents.
In their filing Wednesday, attorneys Jeroen van Kwawegen and Thomas Curry cited a deferred-prosecution agreement filed against FirstEnergy last July. In it, the company agreed that it bankrolled the scandal by paying “millions of dollars to and for the benefit of public officials in exchange for specific official action for FirstEnergy Corp.’s benefit.”
The agreement cited two company officials who pushed the payments, but it identified them only by Executive 1 and 2. Van Kwawegen and Curry’s filing says Jones was Executive 1, and it lists Dowling as Executive 2.
The agreement “describes Executive 1 and Executive 2′s central roles in the events giving rise to this litigation,” according to the attorneys’ filing Wednesday. The lawyers said Jones and Dowling “have vehemently denied acting improperly.”
The prosecution agreement indicates the two former FirstEnergy officials worked for months to gain Householder’s help, from his push to speakership in 2019 to the hundreds of thousands of dollars in regular payments. They called and texted numerous times about the legislation, according to the agreement.
On Jan. 7, 2019, the Ohio House selected Householder as speaker. Afterward, the prosecution agreement shows, Householder texted Jones, saying, “Thanks for everything. It was historic.” The same day, another person texted Jones and Dowling, “Big win in the Ohio Speaker vote.”
House Bill 6 passed months later. Major portions of it, including the bailout, were repealed last year.
The filing Wednesday follows Adams’ fight to find the people responsible for the payments, as he believed residents had a right to know the details of a public corruption scandal. Attorneys for the shareholders had sought to keep the information shielded, claiming they had the confidentiality of a mediation process.
Adams questioned how attorneys reached a yet-to-be finalized settlement without deposing any witnesses in the case. Shareholders, on behalf of the company, had sued the utility’s directors and officers and alleged a lack of oversight that led to the scheme.
The settlement calls for insurers of the utility’s top leaders to pay $180 million that would go to the company for the damages the scheme caused. Six of 16 board members will step aside this year.
Adams questioned why top officials at a publicly held company have yet to be forced to pay for any of the damage they caused. He cited the fact that the utility’s leaders earned more than $105 million in compensation during the scheme.
Jennifer Young, a spokeswoman for FirstEnergy, declined to comment on Wednesday’s filing. She said in an email that FirstEnergy “continues to take steps to rebuild trust with stakeholders and position the company for the future.”
She said it includes strengthening the leadership team, enhancing its compliance program, implementing “more robust oversight of government affairs engagement” and resolving multiple regulatory proceedings.
Householder and his political aide, Jeffrey Longstreth, and lobbyists Neil Clark, Juan Cespedes and Matthew Borges were indicted on federal racketeering charges in July 2020.
Longstreth and Cespedes have pleaded guilty, as has the nonprofit linked to Householder, Generation Now. Borges and Householder deny the allegations and are expected to go to trial Jan. 23. Clark died by suicide last year.