Records show stained utilities backed DeWine
Watchdogs: Lack of transparency casts doubt in voters’ minds.
Akron-based FirstEnergy and FirstEnergy Solutions donated more than $1 million to nonprofit groups and political campaigns since 2017 to help elect Gov. Mike DeWine, according to a Springfield News-Sun investigation.
The utility companies’ use of undisclosed political donations is at the center of an alleged nearly $61 million bribery scheme that federal prosecutors say resulted in a $1.3 billion energy bailout bill being passed into law. DeWine has not been identified as a target of that federal investigation.
The Springfield News-Sun examined multiple campaign finance and IRS records to uncover the amount of the energy companies’ support for DeWine’s election efforts.
The U.S. Supreme Court has ruled that the kind of giving found in the records is a form of free speech and legal as long as the nonprofits are independent and don’t coordinate work with political candidates. However, government watchdog groups say the lack of transparency in huge political contributions like this makes it much harder for voters to know whether their public officials are acting for the benefit of donors or constituents.
The biggest single check that is publicly disclosed — $500,000 — came from FirstEnergy Solutions on Oct. 11, 2018, to the Republican Governors Association, IRS records show.
DeWine met with FirstEnergy executives at an RGA fundraiser in downtown Columbus on Oct. 10, 2018, according to his spokeswoman.
More money might have flowed from FirstEnergy to nonprofit organizations that aren’t required to disclose their donors. The organizations disclose some expenditures to the IRS, and those public records give a partial picture of money flowing between the groups.
In a Feb. 18 earnings call, FirstEnergy top executives pledged transparency and said the company ceased political contributions and would no longer contribute to politically oriented nonprofit organizations. But the company declined to disclose contributions it might have made to political groups that supported DeWine in recent years.
“We’re committed to sharing all the information we can, when we are able to share it. However, because of the ongoing investigations, that’s not information we’re able to provide at this time,” FirstEnergy spokeswoman Jennifer Young said.
DeWine declined an interview for this story. His Press Secretary Dan Tierney said: “Gov. DeWine has supported the importance of energy long before FirstEnergy supported his 2018 campaign.”
Tierney noted that DeWine’s support for nuclear power goes back to the early 2000s and that this consistent support might have motivated FirstEnergy to support him for governor. “But those contributions had no influence on his consistent nuclear policy perspective,” Tierney said.
Tierney also said “The independent expenditure committees that supported the governor’s 2018 election were, consistent with election law, independent of his campaign.”
In July, federal prosecutors charged former Ohio House Speaker Larry Householder and four others with racketeering, alleging they ran a nearly $61 million bribery scheme using undisclosed political money to position Householder as speaker and then pass and defend a $1.3 billion bailout law. While FirstEnergy and FirstEnergy Solutions aren’t specifically named in court documents, the descriptions identify those companies as alleged participants in the scheme and the utility has said it is working with investigators.
The Springfield News-Sun has been analyzing House Bill 6 since its introduction in April 2019 and digging into the public corruption case since it was revealed in July 2020.
DeWine signed the HB6 in July 2019 and defended the law after prosecutors connected it to the bribery scheme. He later changed course and called for its repeal.
Following the money
A 2010 landmark U.S. Supreme Court decision opened the door for corporations, nonprofits, labor unions and other associations to make political contributions. The decision in Citizens United v. Federal Elections Commission led to the rise of so-called “super political action committees” and nonprofit groups known as 501(c)4 organizations.
Since 2017, when DeWine began running for the 2018 governor’s race, his team has received support from a number of these nonprofit groups.
Here is the rundown:
■ The Republican Governors Association is affiliated three political groups: State Solutions Inc., a 501(c)4 group; American Comeback Committee, a state-focused super PAC; and RGA Right Direction, a political action committee. RGA Right Direction spent $3.9 million on pro-DeWine TV ads in Ohio in 2018, according to Medium Buying.
■ Securing Ohio’s Future Inc. and its political action committee, Securing Ohio’s Future Action Fund, raised and spent money to get out the vote for DeWine’s candidacy in 2018. Securing Ohio’s Future Action Fund spent $5 million in 2018 to get pro-DeWine voters to vote, campaign finance records show.
■ Protecting Ohio Inc. and its political action committee, Protecting Ohio Action Fund, supported the governor’s daughter Alice DeWine in her unsuccessful run in the 2020 GOP primary for Greene County prosecutor. She has previously said this group worked independent of her campaign and she wasn’t informed of its activities.
■ Partners for Progress is a 501(c)4 organization funded by FirstEnergy. It gave $75,000 to Protecting Ohio Inc. and $300,000 to Securing Ohio’s Future Inc. IRS documents show:
■ The Republican Governors Association gave $2.75 million to Securing Ohio’s Future Action Fund in 2018.
■ RGA also gave $1.1 million to American Comeback Committee. State Solutions also gave $11 million to American Comeback. In turn, American Comeback gave $2.15 million to Securing Ohio’s Future Action Fund.
■ Securing Ohio’s Future Inc., which does not have to disclose its donors, also contributed $2.1 million to Securing Ohio’s Future Action Fund.
■ Generation Now is a 501(c)4 organization that was funded mostly by FirstEnergy, Partners for Progress and Empowering Ohio’s Economy, which is another 501(c)4 funded by American Electric Power. Generation Now pleaded guilty to federal racketeering earlier this month.
Campaign finance records show:
■ Since 2017, FirstEnergy executives, former executives, FirstEnergy Solutions executives, their relatives and the FirstEnergy PAC contributed $94,285 to the DeWine campaign committee in cash or in-kind assistance.
■ During the same period, lobbyists for the energy companies contributed $106,785 to the DeWine campaign. And the same group donated $35,400 to DeWine’s inaugural committee in late 2018 and early 2019.
Some politicians donated contributions from FirstEnergy after the bribery scheme was disclosed. The DeWine campaign didn’t refund or donate any FirstEnergy money after the July 21 arrests, said spokeswoman Lisa Peterson.
Between 2017 and 2018, the DeWine campaign spent a total of $27.88 million, which includes donations from voters, businesses and $4 million in personal loans to his campaign.
The Republican Governors Association receives millions of dollars from corporations and business executives who want pro-business governors elected across the country. RGA spokesman Jesse Hunt did not respond to a request to discuss contributions made to State Solutions but said in a statement: “RGA’s contributions are publicly disclosed, and the RGA doesn’t earmark any funds.”
DeWine’s opponent in the 2018 race for governor, Democrat Richard Cordray, also received some support from FirstEnergy and FirstEnergy Solutions, records show.
The Cordray campaign fund received $1,000 from Gary Benz, a FirstEnergy senior vice president, in October 2018.
FirstEnergy Solutions contributed $350,000 in 2018 to the Democratic Governors Association, which ran ads during the battle between Cordray and DeWine. FirstEnergy gave $102,500 in 2017 and 2018.
Earlier this year, FirstEnergy stuck a deal with shareholders on a new policy of disclosing its future political activity twice a year through May 2024, including corporate political action committees, candidate committees and ballot issue contributions. The policy does not include lobbying expenses.
FirstEnergy connections
Just weeks after DeWine won in 2018, he and his running mate, Lt. Gov. Jon Husted, dined with then FirstEnergy CEO Chuck Jones and Senior Vice President Mike Dowling at the Athletic Club of Columbus on Dec. 18.
Catherine Turcer of Common Cause Ohio said this kind of dinner demonstrates a close relationship between the DeWine administration and FirstEnergy.
The 90-minute dinner came as DeWine was hiring key staff for his administration. Weeks after the dinner, DeWine appointed longtime energy attorney Sam Randazzo to lead the Public Utilities Commission of Ohio, which has regulatory oversight over FirstEnergy, FirstEnergy Solutions and others, and he named Dan McCarthy as his chief legislative lobbyist.
Both Randazzo and McCarthy have ties to FirstEnergy.
FirstEnergy Solutions bankruptcy records show the utility owed money to Randazzo’s consulting firm. On Nov. 15, 2020, FBI agents searched Randazzo’s home, hauling away boxes of material. Despite the raid, DeWine told reporters at the time there was no indication Randazzo was under investigation.
Later that week, FirstEnergy told the Securities and Exchange Commission that it fired Jones, Dowling and another top executive in October 2020 in part because they failed to tell the board about a $4.3 million payment made in January 2019 to someone who was subsequently appointed in February 2019 and started in April 2019 as a state utility regulator.
In a footnote in the Nov. 17, 2020, disclosure, FirstEnergy said the recipient acted “at the request or for the benefit of FE as a consequence of receiving such payment” while serving as a utility regulator.
The disclosure didn’t name Randazzo but the description matches his appointment as
PUCO chairman. After the FBI search and the SEC disclosure, Randazzo resigned from the utility commission.
McCarthy lobbied for FirstEnergy for 10 years and served as president of Partners for Progress. While using pseudonyms, an FBI affidavit alleges that FirstEnergy pumped $25 million through Partners for Progress between February 2017 and October 2018, which sent $13.9 million to Generation Now.
McCarthy resigned from his lobbying firm and Partners for Progress before joining the DeWine administration in early January 2019. Once he joined the administration, McCarthy lobbied on behalf of DeWine on House Bill 6.
When asked whether McCarthy should be required to explain the money that flowed through Partners for Progress, DeWine said he and Husted supported keeping the FirstEnergy Solutions nuclear power plants open as a clean energy source.
“Dan McCarthy is a well respected individual — for many, many years, long before he started working for me as our legislative director. I have faith in his integrity,” DeWine said on Feb. 16.
Experts disagree on transparency
Bradley A. Smith, a law professor at Capital University and former commissioner of the Federal Elections Commission, said: “It sounds like there is a lot of transparency. I see these things and I think was Gov. DeWine’s position on House Bill 6 any secret? I think voters knew that and understood that. I think anybody who is the governor of the state who would not have at least some contact, perhaps an occasional direct meeting and so on, with a major employer of the state like FirstEnergy is probably being derelict in his duty.”
Smith is the founder of the
Institute for Free Speech, a Washington, D.C.-based group, and an advocate for rolling back campaign finance restrictions. Most political spending is done by candidates, parties and political action committees, said Smith. Undisclosed political money represents less than 5% of all political giving nationally, he said.
“I listen to this and I say, ‘So, he was engaged in politics? And we should be shocked by that?’ I don’t think that’s right. Lots of people supported HB6 and now everybody is sort of aghast by HB6‚” Smith said. “… I’m not sure that the substantive arguments in favor of it or opposed to it have changed.”
The debate should focus on the substance of House Bill 6 and those who might have violated the law, Smith said, while others who complied with the law shouldn’t be tarred by the actions of others.
Others say Ohioans would benefit from seeing the full picture and getting complete answers from DeWine.
Rob Kelter of the Environmental Law and Policy Center, which supports a full repeal of HB6, said: “It’s time for the governor to come clean and answer every question that the people of Ohio have about his relationship to FirstEnergy.”
Randi Leppla of the Ohio
Environmental Council Action Fund said, “For the health of our democracy, Citizens United should be reversed and campaign-finance laws revised to prevent the type of dark money that was used — both legally and illegally — to pass House Bill 6. Dark money in politics makes a broken system even worse and creates politicians beholden to their donors instead of their constituents. This corruption results in dirtier air, more health complications and a lagging economy. Ohioans deserve better.”
Contact this reporter at 614-224-1624 or email laura. bischoff@coxinc.com.