House bill

FirstEnergy shareholder attorneys identify Charles Jones and Michael Dowling for crafting House Bill 6 payments

CLEVELAND, Ohio — Attorneys for shareholders of FirstEnergy Corp. on Wednesday identified two former senior Akron utility executives as behind the payments in the House Bill 6 scandal.

Lawyers said in a filing that if the investors’ lawsuit had gone to trial, evidence would have shown that Charles Jones, the former CEO, and Michael Dowling, who led the company’s lobbying efforts, “conceived and orchestrated payments from FirstEnergy to public officials in exchange for favorable legislation and regulatory action.

Neither Jones nor Dowling have been charged. Carole Rendon, attorney for Jones, said the filing was not evidence. In an emailed statement, she said: “Mr. Jones did not engage in any illegal conduct or violate any of FirstEnergy’s policies.

Dowling’s attorney, John McCaffrey, declined to comment. In other civilian filings, Dowling denied wrongdoing.

Jones and Dowling were fired in October 2020, months after 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 issued the order after attorneys tried to sidestep his questions by demanding confidentiality in the mediation process.

The investors, on behalf of the company, sued the utility directors and officers in the summer of 2020 before Adams. They alleged a lack of oversight that led to what authorities called Ohio’s biggest corruption scheme.

Similar cases are pending in the U.S. District Court in Columbus and the Summit County Common Pleas Court.

The investors’ claims, filed in what is being called a derivative lawsuit, stem from the $60 million in payments made to a nonprofit linked to Householder, a Republican. He denied the allegations. His lawyers called the payments political contributions.

In exchange for the payments, Householder and a group of allies sought a $1.3 billion statutory bailout of two aging nuclear power plants that were owned by a former FirstEnergy subsidiary, court documents show.

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 funded the scandal by paying “millions of dollars to and for the benefit of public officials in exchange for specific official action for the benefit of FirstEnergy Corp.”.

The agreement named two company officials who pushed the payments, but it only identified them as executives 1 and 2. Van Kwawegen and Curry’s filing says Jones was executive 1 and it lists Dowling as executive 2.

The agreement “describes the central roles of Executive 1 and Executive 2 in the events giving rise to this litigation,” according to the attorneys’ filing Wednesday. The attorneys said Jones and Dowling “vehemently denied acting improperly.”

The lawsuit agreement says the two former FirstEnergy officials worked for months to secure Householder’s help, from his push for the presidency in 2019 to hundreds of thousands of dollars in regular payments. They called and texted extensively about the legislation, as per the agreement.

On January 7, 2019, Ohio House selected Householder as their speaker. Subsequently, the suit agreement shows that Householder texted Jones, saying, “Thank you for everything. It was historic. That same day, another person texted Jones and Dowling, “Big win in Ohio president’s vote.”

House Bill 6 was passed months later. Significant parts of it, including the bailout, were repealed last year.

Wednesday’s filing follows Adams’ fight to find those responsible for the payments because he believed residents had a right to know the details of a public corruption scandal. Lawyers for the shareholders had sought to shield the information, saying they had confidentiality for a mediation process.

Adams asked how the attorneys reached a settlement that had yet to be finalized without filing any witnesses in the case. The shareholders, on behalf of the company, had sued the directors and officers of the utility and alleged a lack of oversight that led to the scheme.

The settlement calls on the utility’s top executives’ insurers to pay $180 million that would go to the company for damages caused by the scheme. Six of the 16 board members will retire this year.

Adams asked why senior officials at a public company had not yet been forced to pay for the damage they had caused. He cited the fact that utility executives earned more than $105 million in compensation during the program.

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 this includes strengthening the leadership team, improving its compliance program, implementing “stronger oversight of engagement in government affairs” and resolving multiple proceedings. regulations.

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 pleaded guilty, as did Householder-linked nonprofit Generation Now. Borges and Householder deny the allegations and are expected to stand trial on January 23. Clark committed suicide last year.