A federal judge has blocked an appeal from FirstEnergy Corp, which could result in the release of two internal investigations into the company’s bribery schemes. The energy company has been fighting to keep these investigations confidential for the past year.
After the arrest of Larry Householder and his four accomplices, who allegedly conspired to funnel $61 million from FirstEnergy for personal and political gain, the company hired Jones Day and Squire, Patton Boggs law firms to investigate its executives’ conduct. As per the orders of a special master and federal judge, FirstEnergy has to provide these findings to plaintiffs who are suing the company.
U.S. District Judge Algenon Marbley issued a ruling on Friday that prohibits FirstEnergy from appealing the matter to a higher court. While the ruling doesn’t mandate the release of the documents immediately, it effectively blocks any further attempts by the company to delay their handover. FirstEnergy has declined to comment on the issue at this time.
Jennifer Young, the spokeswoman, stated that they are unable to comment due to pending litigation.
The civil case’s evidence exchange process, known as discovery, has been put on hold as other pre-trial matters are resolved. It’s important to note that Friday’s order doesn’t necessarily mark the end of the road. While previous orders to release the investigations have generated hype and optimism, they have yet to result in a significant release of information.
FirstEnergy fired CEO Charles Jones, senior vice president of product development, marketing and branding Dennis Chack, and senior vice president of external affairs Mike Dowling in 2020 following an internal review. The company also cited the investigation in 2021 when it announced its agreement with the U.S. Attorney’s Office for the Southern District of Ohio. As part of the agreement, FirstEnergy admitted to bribing Householder and Sam Randazzo, a top appointee responsible for regulating FirstEnergy and its peers, and agreed to pay a $230 million penalty.
Jones and Dowling currently face criminal charges for allegedly bribing Randazzo, to which they have pleaded not guilty. Meanwhile, Randazzo was accused of accepting their bribes but passed away by suicide before the trial. Additionally, Householder is currently serving a 20-year prison sentence, and three other men have either been convicted or pleaded guilty in relation to the scandal.
Investors in FirstEnergy have filed a securities fraud lawsuit after suffering losses due to the company’s plummeting share price following the arrests and criminal investigations. In an attempt to obtain copies of the investigations, the investors initiated legal action in June 2023. However, FirstEnergy contested this, arguing that the reports were protected by attorney-client privilege. In an interesting turn of events, both Jones and Dowling joined the plaintiffs in their quest to access the internal investigations.
In November, the company won the case with the support of a special master. Similarly, Marbley also ruled in favor of the company in May. Both found that while the investigations may have had some legal value, their primary purpose was to serve the company’s business and human resources needs, which ultimately undermined the privilege.
Due to an agreement between FirstEnergy and the Ohio Consumers’ Counsel, the legal arguments surrounding the case have become even more significant. The state agency has been actively advocating for transparency, customer refunds, and accountability for the company. As part of this agreement, the Ohio Consumers’ Counsel will receive all records that FirstEnergy provides to the plaintiffs during the pre-trial evidence exchange process. Since the agency is a state entity, the records will be accessible through public records requests, unlike most records that are typically kept confidential until the trial.
Consumers Counsel Maureen Willis, who directs the office, spoke out in favor of Judge Marbley’s decision to deny FirstEnergy’s attempt at blocking public disclosure of its HB6 internal investigation reports. “It’s about time the facts are made public,” Willis stated. She also questioned what FirstEnergy may be hiding from consumers.
