Electric services company FirstEnergy Corp. has begun discussions with the U.S. Attorney’s Office regarding resolution of the Ohio nuclear bailout federal corruption scandal, according to a regulatory filing last week.

Those discussions include the possibility of FirstEnergy entering into a deferred prosecution agreement, the filing said.

Ohio Speaker of the House Larry Householder and four others were arrested and charged by the Department of Justice in July 2020 in connection with a federal corruption scandal. The scandal, in which FirstEnergy became embroiled, allegedly involved a racketeering conspiracy that concerned $60 million being paid to nonprofit group Generation Now (which was also charged) to pass and uphold a billion-dollar nuclear plant bailout.

Before Ohio Governor Mike DeWine signed legislation on March 31, 2021, repealing the nuclear bailout and other provisions of the earlier bill, it would have directed more than $1 billion in state subsidies to nuclear power plants formerly owned by a FirstEnergy subsidiary.

In July 2020, FirstEnergy said it “received subpoenas for records” from the U.S. Attorney’s Office for the Southern District of Ohio in connection with the investigation.

“FirstEnergy was not aware of the criminal allegations, affidavit or subpoenas before July 21, 2020,” the company said in the regulatory filing.

“As these discussions are preliminary, FirstEnergy cannot currently predict the timing, the outcome, or the impact of a possible resolution of this ongoing investigation,” the company said.

It added it is “probable that it will incur a loss in connection with the resolution of this investigation.”

Separately, FirstEnergy announced March 31 that its Ohio utilities—Ohio Edison, The Illuminating Company, and Toledo Edison—collectively will credit customers approximately $26 million in previously collected revenues.

“Moving forward, the company remains committed to engaging in a holistic and transparent manner with key stakeholders,” the company said.

In response to the investigation, FirstEnergy has continued to clean house. It fired its former Chief Ethics Officer Ebony Yeboah-Amankwah and appointed Antonio Fernández as its new chief ethics and compliance officer. Fernández assumed the role April 12.

FirstEnergy also fired Chief Legal Officer Robert Reffner; former CEO Charles Jones; its SVP of product development, marketing, and branding; and its SVP of external affairs.

Jaclyn Jaeger is a freelance contributor to Compliance Week after working for the company for 15 years. She writes on a wide variety of topics, including ethics and compliance, risk management, legal, enforcement, technology, and more.

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