March 8, 2021 update: FirstEnergy responded to months old allegations that its new CEO Steven Strah signed checks to Generation Now, which last month plead guilty to participating in a $60 million racketeering conspiracy.
Jennifer Young, a spokesperson for FirstEnergy. contacted the Energy and Policy Institute this morning and offered “clarifying information” regarding those allegations.
Young said the allegations were based on a name confusion and it would have been Steven Staub, FirstEnergy’s treasurer, whose name appeared electronically on company checks at the time.
Strah did not sign company checks, according to Young.
Young confirmed that Strah served as Chief Financial Officer (CFO) of the FirstEnergy Service Company in 2018, the subsidiary that allegedly wrote the checks to Generation Now that same year.
The allegations were based on court filings described in the October 2020 blog post below.
A lawsuit alleges that FirstEnergy’s new acting CEO Steven Strah signed checks to Generation Now, the dark money group indicted in the federal racketeering case against former Ohio House speaker Larry Householder.
“… Defendant Strah, who ‘is now the President of [FirstEnergy],’ was FESC’s Senior Vice President and CFO until May 2020 and signed the checks that FESC paid to Generation Now,” a shareholder lawsuit filed on Sept. 30 by the pension fund for the Massachusetts-based IBEW Local 103 alleges, based on information from the FBI’s criminal complaint against Householder.
Strah was named acting CEO yesterday, when FirstEnergy announced the termination of his predecessor, Charles Jones, and two others. The firings are the latest fallout from a federal racketeering case that centers on allegations that Householder and four political operatives secretly received $60 million through a front group called Generation Now Inc. to secure a $1 billion bailout for two nuclear power plants via legislation, House Bill 6, passed last year by Ohio’s state legislature. The bill also subsidized coal plants and ended Ohio’s renewable energy and energy efficiency standards.
Following the firings, an analyst for Morgan Stanley asked Christopher Pappas, the executive director of FirstEnergy’s board, if he is confident that no other employees violated the company’s policies or code of conduct.
“The investigation, Stephen, is still ongoing, and it would be premature to make any comments on that till we get to a more conclusive state,” Pappas said in response during FirstEnergy’s third-quarter earnings call.
FirstEnergy has not been formally named or charged in the case, but is widely recognized to be the “Company A” described as the scheme’s primary funder in the complaint and a grand jury indictment. FirstEnergy, a subsidiary service company, and the utility’s political action committee have all been subpoenaed in the investigation.
Strah is named as a defendant in multiple lawsuits against FirstEnergy related to the investigation.
“Bank account records indicate that x4788 is also a Company A Service Company account,” according to a footnote in the FBI’s criminal complaint, which prosecutors filed in a federal court in July. “For example, checks to Generation Now from x4788 were signed by Senior VP and CFO for Company A Service Company, who is now the president of Company A Corp.”
Strah previously served as the President of FirstEnergy Corp., a position to which he was appointed “in May 2020 as part of the Company’s ordinary-course succession planning process,” FirstEnergy said in a press release yesterday announcing Jones’ firing.
Strah was Senior Vice President and Chief Financial Officer for both FirstEnergy Corp. and the FirstEnergy Service Company in 2018, according to a regulatory filing. The criminal complaint lists two checks paid to Generation Now from account “x4788” in October 2018, when the group spent money to support state House candidates supported by Householder.
“In the final months before the 2018 general election, Company A dropped another $500,000 into the Generation Now account,” the complaint said. “This time the money was paid by check from account x4788.”
Evidence presented in the FBI complaint points to the “Company A Service Co.” as having “wired the bulk of the millions of dollars to Generation Now for the benefit of Company A-1.”
“Company A-1” is widely assumed to be FirstEnergy Solutions, the subsidiary of FirstEnergy Corp. that in February emerged from bankruptcy as a new company called Energy Harbor, which now owns the nuclear plants. The Wall Street Journal reported last week that Energy Harbor has also been subpoenaed in the racketeering investigation.
The FirstEnergy Service Company retained Juan Cespedes in 2018 to lobby for FirstEnergy Solutions. Cespedes, along with former Householder aide Jeff Longstreth, pled guilty in the racketeering case yesterday, hours before FirstEnergy fired Jones and promoted Strah.
FirstEnergy also fired Michael Dowling, senior vice president of external affairs for the service company, yesterday, along with its senior vice president of branding Dennis Chack.
The criminal complaint described phone records as evidence of multiple phone calls that Householder had with Jones, Dowling, and FirstEnergy’s director of state affairs for Ohio, who is likely lobbyist Ty Pine. Pine was not included in the list of employees fired yesterday.
Top photo is of a cooling tower at FirstEnergy’s Davis-Besse nuclear power plant by Joseph Varnum obtained on Wikipedia Commons. Creative Commons Attribution-Share Alike 3.0 Unported License