Ohio's Nuclear Energy Problems
Floor Speech
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Ms. KAPTUR. Mr. Speaker, the production of nuclear power in our country is an awesome responsibility. Put in the hands of the wrong people, it can be deadly.
Those who operate nuclear facilities must be highly trained and honorable. Recall Three Mile Island, Chernobyl, and Fukushima? They all teach us nuclear power in the hands of careless and, indeed, corrupt people can be deadly to thousands of innocent people.
This morning, let us turn to Ohio's two financially strapped nuclear plants, both located in northern Ohio, adjacent to our people's freshwater kingdom, Lake Erie.
In Ohio, the largest corruption crimes in America's commercial plant nuclear history are being litigated. These crimes are also the largest public corruption trials in Ohio's history.
Last week, a Federal grand jury in Cincinnati indicted former chair of Ohio's Public Utilities Commission, Sam Randazzo, on bribery and embezzlement for his role in receiving $4.3 million in kickbacks for what has been labeled the biggest political bribery scandal in Ohio's history.
The nuclear power company, FirstEnergy, ultimately paid more than $60 million in 2018 and 2019 to bribe public officials like the Speaker of the Ohio House, who has now been sentenced to 20 years in prison.
Mr. Speaker, I include in the Record an article entitled ``Sam Randazzo, Ohio's former top utilities regulator, charged with bribery, embezzlement crimes.'' [From the Plain Dealer Cleveland, Dec. 5, 2023] Sam Randazzo, Ohio's Former Top Utilities Regulator, Charged With Bribery, Embezzlement Crimes
(By Jeremy Pelzer, Andrew J. Tobias, and Jake Zuckerman, Zuckerman)
Columbus, OH.--A federal grand jury has indicted Sam Randazzo, the former chair of the Public Utilities Commission of Ohio, on 11 counts
related to bribery and embezzlement, U.S. Attorney Kenneth Parker's office announced Monday.
The indictment states that Randazzo accepted a $4.3 million bribe in exchange for helping FirstEnergy, an Akron-based electric utility, secure its policy priorities, including helping with House Bill 6, the 2019 energy law at the center of a federal bribery probe. FirstEnergy admitted to bribing Randazzo in 2021, but he wasn't charged until now.
If convicted, Randazzo could face up to 20 years in prison.
The 74-year-old Columbus resident self-surrendered on Monday morning at U.S. District Court in Cincinnati, according to a release. He appeared in federal court that afternoon, cuffed at the wrists and ankles, before Chief Magistrate Judge Karen Litkovitz at Cincinnati's federal courthouse. He pleaded not guilty and was released on a bond of his own recognizance.
The 11 counts against Randazzo include: one count of conspiring to commit travel act bribery and honest services wire fraud, two counts of travel act bribery, two counts of honest services wire fraud, one count of wire fraud and five counts of making illegal monetary transactions, according to the release.
As chairman of the PUCO from April 2019 until he resigned in November 2020, Randazzo reviewed requests from gas and electric companies seeking to levy new costs on customers. He accepted $4.3 million soon after meeting with then- FirstEnergy executives Chuck Jones and Mike Dowling in December 2018, as Randazzo was applying to become PUCO chair.
In November 2019, Randazzo pushed to cancel a 2024 rate review case that the company believed would hurt its bottom line by forcing it to reduce the rates it charged customers, as well as open its books to regulators, which they saw as problematic.
Randazzo also played a key role in getting lawmakers, including Ohio Senate Finance Committee Chair Matt Dolan, to include language in the 2019 state budget that loosened state limits on FirstEnergy, and other utilities' ability to make ``significantly excessive'' profits, according to the indictment.
Dolan, a Chagrin Falls Republican now running for the U.S. Senate, previously acknowledged speaking to Dowling, who convinced him of the need to place the amendment in the state budget. The Plain Dealer/cleveland.com reached out to Dolan on Monday for comment.
The indictment states that Randazzo routed the bribe money through his consulting business, Sustainability Funding Alliance of Ohio. He also used that business to funnel to himself at least $1 million meant for Industrial Energy Users-Ohio, a consortium of large-scale energy buyers who he represented in PUCO cases as an attorney.
``Public officials--whether elected or appointed--are tasked with upholding the highest level of integrity in their duties and responsibilities. Such service to the public must be selfless, not selfish,'' the U.S. Attorney said in a statement. ``Through the indictment unsealed today, we seek to hold Randazzo accountable for his alleged illegal activities.''
Roger Sugarman, an attorney representing Randazzo in criminal and civil lawsuits, declined to comment Monday. Randazzo did not respond to questions posed by reporters.
Randazzo's arraignment on Monday advanced a stunning fall from grace from a once respected utility lawyer and lobbyist with notorious influence at the Statehouse. He is often credited with pushing for what would become state laws constricting the growth of wind, solar, and energy efficiency programs in Ohio. State lobbying records reflect years of lobbying work on behalf of the Ohio Gas Company, Vectren Energy and IEU. Now-state Sen. Shane Wilkin once told Randazzo in an email that ``we already know you run the energy world.'' He was a mainstay at IEU's regular ``Ohio Energy Management Conference.''
Gov. Mike DeWine, who appointed Randazzo, had dinner with Jones and Dowling the same night as the latter pair's meeting with Randazzo. DeWine spokesman Dan Tierney said Monday that while the governor's office wasn't privy to the indictment and was still reviewing it, ``the indictment alleges very serious acts. Our office has full faith in the criminal justice system to adjudicate these serious allegations in an appropriate manner.''
Many of the emails and text messages referenced in the indictment to and from the former FirstEnergy executives and Randazzo have previously been made public. However, the indictment's details about his embezzlement charge are new, according to Dave DeVillers, Parker's predecessor as U.S. attorney.
Randazzo resigned as PUCO chair in November 2020, days after the FBI raided his Columbus townhouse. In the years that followed, prosecutors were silent about Randazzo, leading to questions about why they were taking so long to decide whether to file charges.
Ashley Brown, a former PUCO commissioner, said the delay has cost the state's electricity customers, given that the PUCO has paused its own investigations into the HB6 scandal at Parker's request to wait for the federal corruption investigation to wrap up.
In the meantime, electricity customers have continued to pay a fee contained in HB6 that subsidizes a pair of coal plants owned by FirstEnergy and several other utilities.
``It's hard to imagine why he wasn't indicted earlier,'' said Brown, who also questioned why no current or former FirstEnergy officials have been charged so far.
Asked about the length of time it took for charges to be brought, DeVillers said, ``They could have been negotiating with the defense attorney, they could have been talking to him and it fell apart. And then it could be they dug into this count [the embezzlement charge], which seems to be completely different, and needed to ferret that out to find out what that was all about.''
Randazzo is already a defendant in a civil lawsuit filed in 2021 by Ohio Attorney General Dave Yost. As part of that case, a Franklin County judge ordered the seizure of up to $8 million worth of Randazzo's assets, though that decision is still being appealed.
Randazzo's indictment comes several months after ex-Ohio House Speaker Larry Householder was sentenced to 20 years in prison for leading a $60 million bribery scheme using FirstEnergy money to help pass House Bill 6, which included a $1 billion-plus ratepayer bailout for two nuclear power plants then owned by a FirstEnergy subsidiary. Former Ohio Republican Party Chair Matt Borges received 5 years in prison for his role in the scandal; two others connected to the bribery scheme have pleaded guilty and are awaiting sentencing.
FirstEnergy officials previously admitted that Randazzo helped them to develop strategy and legal language for HB6.
After HB6 passed, emails made public last year showed Randazzo, as PUCO chair, worked behind the scenes to hinder attempts to fully repeal the law, and he only grudgingly called for state regulators to take limited action--asking FirstEnergy to investigate itself over whether it misspent any customer money--in response to negative press.
To date, no current or former FirstEnergy officials, have been charged in connection with the HB6 scandal or any of Randazzo's alleged crimes.
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Ms. KAPTUR. Mr. Speaker, FirstEnergy's plot was to foist its billion- dollar-plus corporate losses on the consumers of Ohio due to its pitiful management of its two nuclear power plants in northern Ohio. These are crimes.
While Randazzo was being indicted, the Federal Government moved to claim an additional $6.5 million from FirstEnergy for this crime. We should all be deeply disturbed that inherently dangerous nuclear assets have been in the hands of criminals.
Mr. Speaker, I include in the Record an editorial titled: ``Finally, 11 counts against ex-PUCO chief Sam Randazzo but why still none against then-FirstEnergy officials whose fingerprints are all over the case?'' [From The Plain Dealer Cleveland, Dec. 6, 2023]
Finally, 11 Counts Against Ex-PUCO Chief Sam Randazzo But Why Still None Against Then-FirstEnergy Officials Whose Fingerprints Are All Over the Case? (By Editorial Board)
Monday's unsealing of an 11-count federal conspiracy, bribery, wire fraud and embezzlement indictment against former Public Utilities Commission of Ohio chief Samuel Randazzo was a welcome sign of prosecutorial progress in the FirstEnergy/House Bill 6 corruption case--but it's like the first footfall in a long-delayed reckoning with some of the key officials at the heart of the asserted conspiracy.
Our editorial board had repeatedly urged the U.S. Attorney for Southern Ohio, Ken Parker, to explain publicly why such a long delay in a case whose first arrests--of five Statehouse figures, including now-convicted former House Speaker Larry Householder and former Ohio Republican Party chair Matt Borges--came more than three years ago.
And where is the second footfall--charges against any of the FirstEnergy Corp. executives whose roles in paying out the bribes and soliciting the corrupt actions by Randazzo and others have been detailed in this and prior indictments?
The Randazzo indictment refers to now-departed Executives 1 and 2 at Akron-based FirstEnergy--former CEO Chuck Jones and former Senior Vice President for External Affairs Michael Dowling--as those with the primary contacts with Randazzo over the $4,333,333 bribe FirstEnergy Corp. previously admitted paying Randazzo in a 2021 deferred prosecution agreement.
But they're clearly not the only FirstEnergy officials privy to the laundry list of regulatory and legislative favors Randazzo was helping the company secure, including a lucrative decoupling accounting provision that PUCO staff opposed, modifications to the state's ``significantly excessive earnings test'' (SEET) that were added to the two- year state budget, and ``burning'' of a critical PUCO audit about FirstEnergy's distribution modernization rider (DMR).
According to the Randazzo indictment, ``On or about March 4, 2020, Executive 1 messaged another Company A executive: ``He [Randazzo] will get it done for us but cannot just jettison all process. Says the combination of over ruling Staff and other Commissioners on decoupling, getting rid of SEET and burning the DMR final report has a lot of talk going on in the halls of PUCO about does he work there or for us? He'll move it as fast as he can. Better come up with a short term work around.''
An indictment to shed light on the full scope of corruption entailed in FirstEnergy's actions is needed.
It's possible Parker's delay in indicting Randazzo over bribes long since acknowledged by FirstEnergy and favors that have come into clearer light in civil cases was because he hoped to turn others into cooperating witnesses--or Randazzo into one himself.
Then there's the unexpected embezzlement charge against Randazzo in the indictment, accusing him of defrauding another client, the Industrial Energy Users-Ohio, a group of big energy customers, of $1,104,598.
David DeVillers, the former U.S. Attorney for Southern Ohio under whose leadership the corruption case was first investigated and prosecuted, told cleveland.com's Jeremy Pelzer, Andrew J. Tobias and Jake Zuckerman that the embezzlement charge might have been the whammy in the mix, taking time to sort out. ``It could be they dug into this count, which seems to be completely different, and needed to ferret that out to find out what that was all about,'' DeVillers told the reporters.
Either way, it is to be hoped that the indictment of Randazzo will finally cause Parker to lift his effective hold on important PUCO and other state-level investigations into how both the PUCO and its processes, and the legislative process separately, were so distorted and corrupted, so reforms can be made. That's especially urgent given that unrepealed parts of fatally tainted House Bill 6 right now require electricity customers in Ohio to subsidize--to the tune of more than $200 million so far, according to the Ohio Office of Consumers' Counsel--two money-losing coal plants, one in Indiana. Shining the full disinfectant of transparent investigations on how all this came to be is a critical first step to reform.
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Ms. KAPTUR. Mr. Speaker, since the Davis-Besse plant came online in 1977, its corporate leadership has never understood nuclear power or its dangers. It is only the unionized workers that have saved our lives. The plant shares an old Babcock-and-Wilcox design with the Three Mile Island reactor that partially melted down in 1979. Another plant with the design, the Rancho Seco plant in Sacramento, California, permanently closed in 1989.
Davis-Besse itself is now nearly 50 years old and has a dismal reputation within the industry and a history of too many close calls. In 1985, the plant suffered a loss of the main and backup supplies of cooling water because of a series of system failures, and this should have been a wake-up call, but it went unheeded.
In 2002, we faced the worst nuclear safety incident since Three Mile Island when a major hole was discovered in Davis-Besse's reactor head, endangering the lives of millions of Ohioans and the purity of Lake Erie. The plant's unionized workers again saved us all.
The Davis-Besse nuclear power plant, with its history of safety violations and close calls, is a clear example of how corporate culture can influence safety culture for the worst, and the industry around our country never held them accountable.
The fines and penalties imposed on FirstEnergy have done little to deter misconduct. It is time for us to take bold action and provide our region with safe, advanced, modern power in a platform akin to the Tennessee Valley Authority.
So much more needs to be done to make our communities safe and whole from FirstEnergy's fraud, starting with making sure that the Benton- Carroll-Salem school system where Davis-Besse is located can be made whole. The value of property in the region has gone down 90 percent, which means the school system is going to be nearly $6 million short on what it needs to teach the next generation.
I urge judges in the case to take the grid under FirstEnergy's ownership under safe public conservatorship until a reliable operator can be stood up.
May we find the wisdom and courage to confront these nuclear challenges head-on to usher in a new era of clean and responsible energy for the consumers and people of northern Ohio who have been bilked so royally over the last nearly half century.
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