Former DeWine aide warned governor about utility regulator before the FBI raided his home
More than two years before FirstEnergy Corp. admitted to paying Ohio’s top utility regulator a $4.3 million bribe, Mike DeWine’s former campaign treasurer warned senior aides to the new governor about the eventual nominee’s “opaque and undisclosed” financial ties to the company.
The warning came in a 198-page dossier alleging Sam Randazzo — a lawyer and lobbyist who represented gas companies and industrial scale electricity buyers — uses businesses registered in his name to “funnel” money from FirstEnergy to buy real estate.
Indeed, between January 2013 and May 2015, Randazzo and his companies purchased eight properties worth nearly $4.1 million, according to the dossier and an independent review of property records. They include six units in Columbus, one in Cuyahoga Falls, and two in Naples, Florida.
DeWine’s chief of staff, Laurel Dawson, received the packet Jan. 28, 2019. The nominating council of the Public Utilities Commission of Ohio, chaired by a former FirstEnergy lobbyist, had included Randazzo among four nominees given to the governor. DeWine got the final choice.
J.B. Hadden — a Columbus lawyer who has represented American Electric Power; a board member of two nonprofits that control millions of AEP’s political spending; and DeWine’s campaign treasurer from 2009 to 2015 — delivered the dossier, according to a DeWine spokesman. Hadden said in a text message he thought it was important to let DeWine know what people were saying about Randazzo.
“As a longtime supporter of Gov. DeWine, I’ve always been honest with him when I think he needs to know something to aid in a decision,” Hadden said.
At the time, Randazzo was winding down a storied career as a legal and political bulwark against renewable energy in Ohio. As a lobbyist and public official, he waged a years-long quest to kill two state programs: one requiring electric companies to sell at least 12.5% of their mix from renewable sources by 2025, and another requiring them to reduce their customers’ energy use by 22% by that same year.
As both a lawyer and a lobbyist, Randazzo represented huge energy consumers like TimkenSteel and Marathon Petroleum to secure better electricity deals from Ohio utilities. He also lobbied at the statehouse for the Ohio Gas Company, a utility serving 50,000 in Northwest Ohio, and Vectren Energy, which sells and delivers gas to 4 million homes in six states.
“When I spoke with him years ago, he was extremely anti-renewables and extremely anti-efficiency, to the point of being irrational,” said Leah Stokes, a political science professor at UC Santa Barbara, who wrote a book spotlighting the successful, fossil-fuel backed, 12-year campaign to roll back clean energy in Ohio.
“With hindsight, it seems there were rational, monetary reasons for him to take those positions.”
On Feb. 4, 2019, DeWine named Randazzo as the PUCO’s chairman.
Less than two years into Randazzo’s five-year term, FBI agents raided his German Village condo and seized boxes of material. He resigned days later, stating that the events could “right or wrong, fuel suspicions about and controversy over decisions I may render in my current capacity.”
The next summer, FirstEnergy entered into an agreement with the U.S. Department of Justice, admitting it paid Randazzo $22 million between 2010 and 2019 for favorable PUCO rulings and other favors. That includes $4.3 million, paid just before DeWine appointed him.
Randazzo issued a statement after FirstEnergy’s admission denying wrongdoing, though acknowledging the existence of a consulting agreement with the company. He has not been charged with a crime and has refrained from public comment.
He and two lawyers representing him in related civil cases did not respond to repeated interview requests or questions.
In its deferred prosecution agreement, FirstEnergy described multiple favors from Randazzo as PUCO chairman to the company. They include helping lawmakers write House Bill 6, which included a bailout for two nuclear plants and another provision its CEO said would “somewhat recession-proof” the company. Federal prosecutors estimated the bill was worth about $1.3 billion to FirstEnergy.
FirstEnergy, in its agreement, also credited Randazzo with waiving a PUCO requirement that would have forced the company to open its books to the commissioners — a point of major financial concern from CEO Chuck Jones.
This account of Randazzo’s ascent is gleaned from 20 interviews with people familiar with Randazzo’s work, PUCO filings, regulatory audits, media reports, and criminal and civil court records related to the scandal.
Randazzo’s final appointment wound through DeWine, whose 2018 campaign received $1 million from FirstEnergy via its PACs, executives, and lobbyists, according to the Dayton Daily News. After receiving both the dossier and another letter from environmentalists warning of Randazzo’s “extreme bias” against renewable energy, DeWine appointed him regardless.
Fighting windmills
In July of 2008, Ohio Gov. Ted Strickland signed into law Senate Bill 221, which required Ohio’s electric utilities to generate at least 25% of their energy from “alternative energy resources” by 2025. Half was to come from renewables, and half from new technology that can increase output without burping more carbon into the air. The bill also created an energy efficiency standard, requiring utilities to reduce their customers’ electricity demand by 22% by 2025.
Randazzo would spend the next 11 years as a lobbyist and public official seeking to freeze or roll back the programs, which finally died via HB 6. Ohio is now one of just 17 states without an energy efficiency program, according to the National Conference of State Legislatures.
Alongside the other efforts, in 2014, Randazzo lobbied on the state budget, which contained language that tripled the required distance between a windmill and a property line, effectively choking off the wind energy industry in Ohio.
At the time, Randazzo worked as general counsel to the Industrial Energy Users of Ohio (IEU). Its membership has included big energy buyers like universities, TimkenSteel, Marathon Petroleum, Energizer Manufacturing, and others. Randazzo’s job was essentially to use the aggregated buying power of IEU’s members to secure them cheaper electricity costs via cases before the PUCO.
According to FirstEnergy’s admission to federal prosecutors, Randazzo entered a “consulting agreement” with the company in 2013. While lobbyists and lawyers who appear in court for clients must disclose who they’re representing, consultants are spared such scrutiny. By 2015, FirstEnergy said it beefed up its consulting contract with Randazzo “in exchange” for IEU withdrawing its opposition to a PUCO case that allowed FirstEnergy to pass on hundreds of millions in charges to its customers.
On May 28 of that year, Randazzo wrote a letter withdrawing IEU’s opposition to a new electricity sales plan from FirstEnergy under the PUCO’s review. He said IEU wouldn’t call any witnesses and withdrew prior testimony from its members against the proposal.
Similarly, in 2013, Duke Energy customers sued the utility for allegedly providing for such side deals. A deposition from a Duke official, referenced in the dossier, notes a $100,000 payment to IEU amid the arrangement. In 2018, a similar settlement brokered with American Electric Power granted IEU a similar $8 million settlement, according to Columbus Business First.
It’s unclear to what extent IEU or its members were aware that Randazzo, IEU’s general counsel, was also receiving money from FirstEnergy, a sometimes-adversarial party. Matthew Pritchard, IEU’s current general counsel, declined to comment.
Electric costs are a zero-sum game in this context, according to Neil Waggoner, an environmental activist with the Sierra Club’s Beyond Coal campaign. Better deals for big customers mean bigger costs for residential ones.
“[Randazzo] had all this influence because he knew the stuff — he was active, and around this for a long time,” Waggoner said. “It was always known that he was hostile to clean energy.”
On some occasions, Randazzo literally shared the stage with the industry. He appeared on a panel: “Powering the Future of Ohio’s Economy,” in 2018, alongside executives from Dynegy Inc., FirstEnergy, AEP, Duke Energy, and AES Ohio.
After Randazzo ascended to the PUCO chairmanship, he helped write HB 6 — legislation FirstEnergy admitted paying $60 million into as a bribe to a nonprofit controlled by House Speaker Larry Householder. Householder has pleaded not guilty to a charge of racketeering and awaits trial next year.
Despite its name (the “Ohio Clean Air Program”), the bill…
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