The Akron, Ohio-based utility appointed President
FirstEnergy’s shares fell 5.7% at 3:08 p.m. in New York.
The firings are the company’s strongest move yet in response to an alleged conspiracy involving a former unit, Energy Harbor Corp. In July, federal officials arrested the speaker of the Ohio House of Representatives and four political associates were indicted on federal racketeering charges involving almost $61 million in bribes tied to a more than $1 billion bailout of two nuclear plants owned by Energy Harbor. Two of the associates, including a lobbyist for a FirstEnergy subsidiary, pleaded guilty Thursday, according to the U.S. attorney’s office for the southern district of Ohio.
FirstEnergy no longer owns the reactors and wasn’t named in the affidavit filed in July by federal authorities. In the charging document, prosecutors said an Ohio-based utility owner -- identified only as “Company A” -- steered almost $61 million over three years to the Ohio house speaker in exchange for supporting a bill passed in 2019 creating the nuclear subsidies. The company was widely believed to be FirstEnergy.
“The guilty pleas and the executive turnover at FE certainly add credence to the allegations,” Height Securities analyst Josh Price said in research note. They also increase “risk for companies and policymakers not explicitly mentioned in the affidavit,” he said.
FirstEnergy had sought to
In addition to subsidizing nuclear reactors,
Within days of it being enacted, environmentalists and others were gathering signatures in support of a referendum to overturn it. The firm described as “Company A” worked closely with supporters of the law to defeat the repeal effort, prosecutors said. It devolved into a political mud fight, including a television ad, contending that overturning the law would give China control over Ohio’s power grid.
At one point, prosecutors said, a lobbyist involved in the effort was driving with company executives when they asked for the car to pull over in front of a library where a supporter of the repeal effort was collecting signatures. One of the executives got out of the car to talk him, prosecutors said.
“It was the CEO of the company,” the lobbyist said, according to an
Jones was not named in the affidavit. Efforts to contact him were unsuccessful.
FirstEnergy identified the two other fired executives in a filing as Dennis Chack, senior vice president of product development, marketing and branding; and Michael Dowling, senior vice president of external affairs.
Last month, Ohio’s attorney general
FirstEnergy didn’t give any more details in Thursday’s statement on the policies that were violated, only saying that they were uncovered as part of an independent board review into the investigations.
“It’s a disappointing development, and one that raises questions as to what exactly the conduct was that led to the board’s decision,” said
“Clearly there was enough of an issue to cause this change in leadership,” Patterson said in a phone interview. “The question is, what was it and are there any significant ramifications that may unfold as a result of it.”
FirstEnergy on Thursday also named board member
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