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San Francisco Chronicle
2 days ago
- Business
- San Francisco Chronicle
5 years after Ohio's $60M bribery scandal, critics say more could be done to prevent a repeat
COLUMBUS, Ohio (AP) — Five years after a $60 million bribery scheme funded by FirstEnergy Corp. came to light in Ohio, expert observers say the resulting prosecutions, lawsuits, penalties and legislation haven't led to enough change and accountability to prevent politicians and corporate executives from cutting similar deals in the future. The scheme — whose prospective $2 billion-plus pricetag to consumers makes it the largest infrastructure scandal in U.S. history — surfaced with the stunning arrests of a powerful Republican state lawmaker and four associates on July 21, 2020. That lawmaker, former House Speaker Larry Householder, is serving 20 years in federal prison for masterminding the racketeering operation at the center of the scandal. Jurors agreed with prosecutors that money that changed hands wasn't everyday political giving, but an elaborate secret scheme orchestrated by Householder to elect political allies, become the House speaker, pass a $1 billion nuclear bailout law in House Bill 6 and crush a repeal effort. One of the dark money groups Householder used also pleaded guilty to racketeering. Householder and a former lobbyist have unsuccessfully challenged their convictions. Two of the arrested associates pleaded guilty, and the other died by suicide. Dark money keeps flowing Any hope that the convictions would have clarified federal law around 501(c)4 nonprofit 'dark money' groups or prompted new restrictions on those hasn't materialized, said former U.S. Attorney David DeVillers, who led the initial investigation. 'I think it's actually worse than it was before,' he said. 'Nationally, you have both Democrats and Republicans using these, so there's no political will to do anything about it.' Indeed, a study released in May by the Brennan Center for Justice found that dark money unleashed by the 2010 Citizens United decision hit a record high of $1.9 billion in 2024 federal races, nearly double the $1 billion spent in 2020. The vast majority of money from undisclosed donors raised into dark money accounts now goes to super PACs, providing them a way to skirt a requirement that they make their donors public, the study found. DeVillers said one positive result of the scandal is that Ohio lawmakers appear genuinely concerned about avoiding quid pro quos, real or perceived, between them and their political contributors. Anti-corruption legislation perennially introduced by Ohio Democrats since the scandal broke has gone nowhere in the GOP-dominated Legislature. Republican legislative leaders have said it is outside their authority to amend federal campaign finance law. The U.S. Attorney's office declined to discuss the investigation because prosecutions remain ongoing. Two fired FirstEnergy executives have pleaded not guilty on related state and federal charges and await trial. Former Public Utilities Commission of Ohio Chairman Samuel Randazzo, to whom FirstEnergy admitted giving a $4.3 million bribe in exchange for regulatory favors, had faced both federal and state charges. He died by suicide after pleading not guilty. State regulator hasn't penalized FirstEnergy Akron-based FirstEnergy — a $23 billion Fortune 500 company with 6 million customers in five states — admitted using dark money groups to bankroll Householder's ascendance in exchange for passage of the bailout bill. It agreed to pay $230 million and meet other conditions to avoid prosecution, and faced other sanctions, including a $100 million civil penalty by the U.S. Securities and Exchange Commission. But FirstEnergy hasn't yet faced consequences from the state regulator. 'They never actually got penalized by regulators at the PUCO level,' said Ohio Consumers' Counsel Maureen Willis, the lawyer for Ohio utility customers. Testimony in four PUCO proceedings stemming from the scandal finally began last month after the cases were delayed for nearly two years, in part at the request of the Justice Department. They're intended to determine whether FirstEnergy used money for bribes that was meant for grid modernization and whether it improperly comingled money from its different corporate entities. FirstEnergy spokeperson Jennifer Young said it invested $4 billion in grid upgrades in 2024 and plans to spend a total of $28 billion through 2029. Young said FirstEnergy has redesigned its organizational structure, established a dedicated ethics and compliance office, overhauled the company's political activity and lobbying practices and strengthened other corporate governance and oversight practices. 'FirstEnergy is a far different company today than it was five years ago,' she said. The PUCO also made changes in response to the scandal. Chair Jenifer French told state lawmakers that ethics training has been enhanced, staff lawyers and the administrative law judges who hear cases now report to different directors to ensure legal independence, and she never takes a meeting alone. Some tainted money hasn't been returned to customers Ashley Brown, a retired executive director of the Harvard Electricity Policy Group who previously served as a PUCO commissioner, said the commission is the only state entity with the power to order FirstEnergy to return tainted cash — including the bribe money — to customers. That largely hasn't happened. He said the Ohio commission had vast power to hold FirstEnergy accountable for its misdeeds but hasn't conducted its own management audit of the energy giant, demanded an overhaul of FirstEnergy's corporate board or pressed for public release of FirstEnergy's own internal investigation of the scandal, whose findings remain a mystery. Shareholders won some accountability measures as part of a $180 million settlement in 2022, but they continue to fight in court for release of the investigation. Willis does, too. 'How do you allow a utility to operate a vast criminal conspiracy within the utility (with) consumer dollars, and you don't even look at what went wrong?' Brown said. PUCO spokesperson Matt Schilling reiterated that the commission's probes are ongoing. He said the panel has vowed to take its proceedings 'wherever the facts lead.' The portion of HB 6 that bailed out two FirstEnergy-affiliated nuclear plants was repealed in 2021, and $26 million was refunded to customers. The scandal investigation revealed that other power distribution companies got a lucrative payout of their own added to the bill in exchange for their buy-in: subsidies for two unprofitable Cold War-era coal plants. It wasn't until April that a law was passed repealing those subsidies. Until that takes effect Aug. 14, the charges cost Ohio ratepayers $445,679 a day — and it's unclear if or when they'll get that money back. A ticker on Willis' website puts the total they've paid at more than $500 million and counting.
Winnipeg Free Press
2 days ago
- Business
- Winnipeg Free Press
5 years after Ohio's $60M bribery scandal, critics say more could be done to prevent a repeat
COLUMBUS, Ohio (AP) — Five years after a $60 million bribery scheme funded by FirstEnergy Corp. came to light in Ohio, expert observers say the resulting prosecutions, lawsuits, penalties and legislation haven't led to enough change and accountability to prevent politicians and corporate executives from cutting similar deals in the future. The scheme — whose prospective $2 billion-plus pricetag to consumers make it the largest infrastructure scandal in U.S. history — surfaced with the stunning arrests of a powerful Republican state lawmaker and four associates on July 21, 2020. That lawmaker, former House Speaker Larry Householder, is serving 20 years in federal prison for masterminding the racketeering operation at the center of the scandal. Jurors agreed with prosecutors that money that changed hands wasn't everyday political giving, but an elaborate secret scheme orchestrated by Householder to elect political allies, become the House speaker, pass a $1 billion nuclear bailout law in House Bill 6 and crush a repeal effort. One of the dark money groups Householder used also pleaded guilty to racketeering. Householder and a former lobbyist have unsuccessfully challenged their convictions. Two of the arrested associates pleaded guilty, and the other died by suicide. Dark money keeps flowing Any hope that the convictions would have clarified federal law around 501(c)4 nonprofit 'dark money' groups or prompted new restrictions on those hasn't materialized, said former U.S. Attorney David DeVillers, who led the initial investigation. 'I think it's actually worse than it was before,' he said. 'Nationally, you have both Democrats and Republicans using these, so there's no political will to do anything about it.' Indeed, a study released in May by the Brennan Center for Justice found that dark money unleashed by the 2010 Citizens United decision hit a record high of $1.9 billion in 2024 federal races, nearly double the $1 billion spent in 2020. The vast majority of money from undisclosed donors raised into dark money accounts now goes to super PACs, providing them a way to skirt a requirement that they make their donors public, the study found. DeVillers said one positive result of the scandal is that Ohio lawmakers appear genuinely concerned about avoiding quid pro quos, real or perceived, between them and their political contributors. Anti-corruption legislation perennially introduced by Ohio Democrats since the scandal broke has gone nowhere in the GOP-dominated Legislature. Republican legislative leaders have said it is outside their authority to amend federal campaign finance law. The U.S. Attorney's office declined to discuss the investigation because prosecutions remain ongoing. Two fired FirstEnergy executives have pleaded not guilty on related state and federal charges and await trial. Former Public Utilities Commission of Ohio Chairman Samuel Randazzo, to whom FirstEnergy admitted giving a $4.3 million bribe in exchange for regulatory favors, had faced both federal and state charges. He died by suicide after pleading not guilty. State regulator hasn't penalized FirstEnergy Akron-based FirstEnergy — a $23 billion Fortune 500 company with 6 million customers in five states — admitted using dark money groups to bankroll Householder's ascendance in exchange for passage of the bailout bill. It agreed to pay $230 million and meet other conditions to avoid prosecution, and faced other sanctions, including a $100 million civil penalty by the U.S. Securities and Exchange Commission. But FirstEnergy hasn't yet faced consequences from the state regulator. 'They never actually got penalized by regulators at the PUCO level,' said Ohio Consumers' Counsel Maureen Willis, the lawyer for Ohio utility customers. Testimony in four PUCO proceedings stemming from the scandal finally began last month after the cases were delayed for nearly two years, in part at the request of the Justice Department. They're intended to determine whether FirstEnergy used money for bribes that was meant for grid modernization and whether it improperly comingled money from its different corporate entities. FirstEnergy spokeperson Jennifer Young said it invested $4 billion in grid upgrades in 2024 and plans to spend a total of $28 billion through 2029. Young said FirstEnergy has redesigned its organizational structure, established a dedicated ethics and compliance office, overhauled the company's political activity and lobbying practices and strengthened other corporate governance and oversight practices. 'FirstEnergy is a far different company today than it was five years ago,' she said. The PUCO also made changes in response to the scandal. Chair Jenifer French told state lawmakers that ethics training has been enhanced, staff lawyers and the administrative law judges who hear cases now report to different directors to ensure legal independence, and she never takes a meeting alone. Some tainted money hasn't been returned to customers Ashley Brown, a retired executive director of the Harvard Electricity Policy Group who previously served as a PUCO commissioner, said the commission is the only state entity with the power to order FirstEnergy to return tainted cash — including the bribe money — to customers. That largely hasn't happened. He said the Ohio commission had vast power to hold FirstEnergy accountable for its misdeeds but hasn't conducted its own management audit of the energy giant, demanded an overhaul of FirstEnergy's corporate board or pressed for public release of FirstEnergy's own internal investigation of the scandal, whose findings remain a mystery. Shareholders won some accountability measures as part of a $180 million settlement in 2022, but they continue to fight in court for release of the investigation. Willis does, too. Monday Mornings The latest local business news and a lookahead to the coming week. 'How do you allow a utility to operate a vast criminal conspiracy within the utility (with) consumer dollars, and you don't even look at what went wrong?' Brown said. PUCO spokesperson Matt Schilling reiterated that the commission's probes are ongoing. He said the panel has vowed to take its proceedings 'wherever the facts lead.' The portion of HB 6 that bailed out two FirstEnergy-affiliated nuclear plants was repealed in 2021, and $26 million was refunded to customers. The scandal investigation revealed that other power distribution companies got a lucrative payout of their own added to the bill in exchange for their buy-in: subsidies for two unprofitable Cold War-era coal plants. It wasn't until April that a law was passed repealing those subsidies. Until that takes effect Aug. 14, the charges cost Ohio ratepayers $445,679 a day — and it's unclear if or when they'll get that money back. A ticker on Willis' website puts the total they've paid at more than $500 million and counting.
Miami Herald
12-07-2025
- Politics
- Miami Herald
Florida spends $4 million on new ‘ideology-free' college accreditor
Florida's higher education leaders are fast-tracking an ambitious, multi-state plan to form a new college accreditor — an effort which Gov. Ron DeSantis is touting as a way to subvert the grip of 'woke accreditation cartels' on academia. The State University System's Board of Governors on Friday approved a roadmap for establishing the Commission for Public Higher Education, a new accrediting agency backed by university systems from five neighboring red states: North Carolina, Georgia, Tennessee, South Carolina and Texas. Florida plans on launching a six-month test run of the new accreditation process with six universities this December, according to the agency's business plan approved unanimously by the Board of Governors in the Friday meeting. The organization aims to secure the U.S. Department of Education's stamp of approval for the accreditation by June 2028. The agency must have at least two years of experience operating as an accreditor before it can seek recognition from the U.S. Department of Education. Florida's GOP-dominated Legislature is backing the venture with a $4 million start-up injection. The agency is anticipating that participating university systems will dedicate similar contributions, per the business plan. Accreditation, which colleges must obtain in order to receive federal student financial aid funding, is meant to act as a quality-control measure for institutions. But critics of the current system say the process is cumbersome and lacks mechanisms for universities to provide input on evaluation criteria. Once a niche subject rarely discussed outside of academic policy wonk circles, accreditation is an increasingly hot topic among conservatives. Some Republicans say accreditors stifle innovation and force left-wing ideology upon institutions. A 'secret weapon' Prominent GOP officials seeking to shake up accreditation are deploying wartime rhetoric. President Donald Trump has threatened to wield the accreditation system as a 'secret weapon' to force schools to adopt policies favored by conservatives. When DeSantis announced Florida's new accrediting agency last month, he said the accreditation establishment had colluded to form 'juntas.' For the governor, seizing control of accreditation is one of the final frontiers in his quest to reshape Florida's higher education landscape, aiming to root out what he sees as rampant left-wing orthodoxy on college campuses. Republican state lawmakers under DeSantis have pushed for laws banning diversity, equity and inclusion spending at state universities and scrubbing 'identity politics' from general education courses. DeSantis' has said one of his biggest gripes with accreditors is that they threaten to yank accreditation from schools without DEI initiatives. But the Southern Association of Colleges and Schools Commission on Colleges — the longtime accreditor of Florida's 40 public universities and colleges — is the only one of the seven southern accreditation agencies that mandate DEI criteria. Discussions between Florida and the University of North Carolina system began last year, Florida university system chancellor Ray Rodrigues told the Miami Herald in an interview, because of shared concerns over SACSCOC's supposed political overreach. In 2023, the accreditor began investigating UNC-Chapel Hill to determine whether it violated accreditation criteria when it established the School of Civic Life and Leadership — an academic unit meant to promote civil discourse — without faculty input. Florida's beef with SACSCOC goes back farther. In 2021, the agency raised concerns after the University of Florida initially barred professors from offering expert testimony in a voting rights lawsuit against the state. (The university later reversed course.) That same year, SACSCOC dinged the Board of Governors for considering then-Education Commissioner Richard Corcoran — a sitting board member at the time — for the Florida State University presidency. (Corcoran has served as president of New College of Florida since 2023.) For administrators, the accreditation process can be cumbersome. It involves hosting campus visits and filling out lengthy spreadsheets. Robert Shireman, a former Obama-era Education Department official, described the process as the higher-ed equivalent of filing taxes. 'If you feel like you're a good college, it can be annoying,' said Shireman, who currently serves on the National Advisory Committee on Institutional Quality and Integrity, which advises the U.S. Secretary of Education on accreditation. According to Shireman, accreditation critics across the political spectrum have raised concerns that accrediting agencies are sluggish and lack mechanisms for universities and colleges to have a say in how they are evaluated. SACSCOC, for instance, is overseen by a 77-member board that meets twice a year. The CPHE's board is far leaner, initially consisting of six members selected directly by participating university systems, according to the agency's business plan — a composition that Shireman said may allow the agency to more nimbly make decisions. Unusual structure In terms of organizational structure, the agency will operate as a nonprofit with the Florida Board of Governors acting as its sole member. That's unusual for an accrediting agency, Shireman said. Accreditors typically operate as nonprofits, but are rarely managed by state agencies and act independent of the institutions it holds accountable. Whether or not the agency could maintain the independence necessary to be seen as legitimate emerged as a key concern during Friday's board meeting. Kimberly Dunn, the board's faculty representative, suggested barring the agency from accrediting Florida's public universities until it had established independence. Not everybody is on board with the accreditation overhaul. Robin Goodman, an English professor at Florida State University, told state board members on Friday they were pushing for 'a solution in search of a problem.' Florida's current accreditation setup, Goodman said, was working perfectly fine and was helping universities climb national rankings. She called the DeSantis' DEI concerns a 'non-evidence based claim' and raised concerns about whether the governor would use CPHE as a Trojan Horse for injecting conservative ideas into curricula. 'That just seems like a bad decision and will make our universities not as great as they are now,' Goodman told board members. Dunn, the faculty representative, said it was important to ensure the agency's accreditation criteria didn't impose or restrict certain content in curriculum. Rodrigues, the university system chancellor, responded that Florida can't establish an accreditor that 'removes left wing ideology and replaces it with right wing ideology.' 'The point of this is to have an accreditor that's not involved in ideology at all,' Rodrigues said. 'It's completely focused on academic excellence [and] quality education.'
Chicago Tribune
01-07-2025
- Politics
- Chicago Tribune
Afternoon Briefing: What new Indiana laws went into effect today
Good afternoon, Chicago. Dozens of new laws that affect education in Indiana, from sex education to teacher pay, become effective today. State lawmakers spent three months, from January to April in Indianapolis, crafting the bills that Gov. Mike Braun would eventually sign into law. The GOP-dominated legislature focused closely on education, from establishing a new K-12 grading system to creating new rules for teaching sex education. Today is also the deadline for requiring state and local agencies in Indiana like county commissions, town and city councils and school boards to livestream public meetings. State lawmakers passed the new law in 2023, deliberately giving elected bodies two years to prepare. Here's what else is happening today. And remember, for the latest breaking news in Chicago, visit and sign up to get our alerts on all your devices. Subscribe to more newsletters | Asking Eric | Horoscopes | Puzzles & Games | Today in History An Illinois lawmaker who represented parts of Chicago's South Side from 2013 to 2019, Christian Mitchell also served as a deputy governor in the administration of Gov. JB Pritzker from 2019 to 2023 when he was a lead strategist on energy issues. Read more here. More top news stories: Some Clarendon Hills residents are speaking out against the proposed addition of a downtown plaza on Prospect Avenue, an idea being considered by village officials. Read more here. More top business stories: June went by quickly for the Chicago Cubs, who went 13-13 and missed out on a chance to put some space between them and their closest pursuers, the Milwaukee Brewers and St. Louis Cardinals. The outlook for the White Sox isn't quite as rosy as that of the Cubs, but neither is the short-term goal. Read more here. More top sports stories: Tyler, the Creator got comfortable yesterday at the first of a two-night stand at a packed United Center. He sat down, unlaced his shoes and slipped them off. He sprawled on a chaise, had a snack and sympathetically complained about body aches that greet people in their mid-30s. He made a B-stage on the floor his own domain — a personal den complete with an old-school hi-fi. Read more here. More top Eat. Watch. Do. stories: Senate Republicans hauled President Donald Trump's big tax breaks and spending cuts bill to passage Tuesday on the narrowest of votes, pushing past opposition from Democrats and their own GOP ranks after a turbulent overnight session. Read more here. More top stories from around the world:
Chicago Tribune
30-06-2025
- Business
- Chicago Tribune
Indiana schools ready for bevy of new education laws
Dozens of new laws that impact education in Indiana, from sex education to teacher pay, become effective Tuesday. State lawmakers spent three months, from January to April in Indianapolis, crafting the bills that Gov. Mike Braun would eventually sign into law. The GOP-dominated legislature focused closely on education, from establishing a new K-12 grading system to creating new rules for teaching sex education. According to Gary Teachers Union president GlenEva Dunham, there are 87 new laws relating to education. 'It's crazy. I'm going to try to have a lawmaker come in and explain it all at our next union meeting,' Dunham said. Most Indiana K-12 leaders are focused on the fallout from a tax reform measure, Senate Bill 1, that provides property tax relief to taxpayers, but slashes revenue for schools and local governments. The taxpayer relief at the expense of local governments was part of Braun's 'do more with less' mantra. Braun, a businessman, argued that local governments and school districts could find efficiencies to help them trim costs. The law also calls for school districts to share referendum revenue with charter schools attended by students in their district beginning in 2028. It would impact about 30 districts and hit the Gary Community School Corp. hard since more than half its eligible students attend charters. The tax relief law is estimated to cost districts about $744.4 million, per a legislative estimate. The measure also limits referendums to the fall ballot only. That's already had an impact as the Duneland School Board voted last week to shift the renewal of its $71.2 million operating referendum from May 2026 to the Nov. 4 ballot to ensure funding is available next year. 'The impact of SEA 1 will be news for a while as public entities come up with ways to keep quality services intact, as per the expectations of many constituents,' said Lake Central Superintendent Larry Veracco. In the state budget, the legislature also provided schools with 2% additional money or about $640 million. Braun and GOP lawmakers continued to expand the state's voucher system, dropping income limits and making it a universal 'school choice' program funded by taxpayers. Here's a look at other new laws: The bill drew controversy and plenty of testimony. In the end, the law ushers in party politics into school board races for the first time. The law allows a candidate to declare a party or disregard the party tag and run as a nonpartisan candidate. The federal Hatch Act limits political activities for federal employees and opponents said it prevents them from running for a school board because the contests are partisan. Dormant since 2018, letter grades return next year with a new framework to assess performance. The State Board of Education has until the end of the year to finalize new rules, but it's likely to add IREAD literacy scores, student attendance and chronic absenteeism to the third grade assessment. Schools in grades 4-8 could be evaluated on ILEARN proficiency in math and English, attendance data and advanced courses. High schools in grades 9-12 could be graded on measures that dovetail with the state's new diploma standards just approved by the state board in December. Within the 200-page bill is a provision that caps the percentage of teachers eligible for Teacher Appreciation Grants at 20%. Veracco said it's problematic in a time when salary increases will likely be small and won't keep pace with inflation. Dunham said it creates a 'divide and conquer' system as some teachers could receive a $7,500 stipend for high performance while other teachers would not receive anything. 'It's selective and subjective, we argued against it,' said Dunham, who also heads the Indiana Federation of Teachers. State Rep. Tonya Pfaff, D-Terre Haute, said previously 90% of teachers are considered effective or highly effective and presently could receive grants between $250 and $600. The new system would mean about 54,000 won't receive the stipend. It increases the minimum salary from $40,000 to $45,000. It also increases the amount of tuition support required from 62% to 65%. Just 44 districts had minimum salaries over $45,000 last year. It requires the State Board of Education to establish chronic absenteeism guidelines and create a list of best practices to reduce student discipline. Chronic absenteeism was defined as missing at least 10% of school for any reason. It allows county prosecutors to hold 'intervention meetings' with parents before any legal action is taken. Teachers will be required to show 'age-appropriate' students a three-minute ultrasound video tracking fetal development and a computer-generated look at fertilization and development. Teachers will also discuss the importance of consent in sexual relations. Parental consent forms must say if the class will be taught by gender or in a unified setting, as well as the teacher's sex. Schools will be required to provide early intervention for K-8 students at-risk of not meeting grade level proficiency. It calls for schools to give a screening test for K-2 students for targeted support. The wide-ranging bill from House Education chairman Robert Behning, R-Indianapolis, takes aim at current education law. He said its purpose is to lighten the load of regulations off school districts. One of those regulations halts state guidelines for teacher preparation to include training on social-emotional learning, cultural competency and restorative justice. Right-learning groups have opposed the concept saying those values could conflict with what students learn at home. Opponents said the training helped reduce suspensions and behavioral incidents. Republicans said the bill doesn't ban the practice, it just makes it no longer a requirement. The bill also discards the education requirement so the governor could appoint a Secretary of Education with no education experience. Added, was the removal of a 2018 requirement for high schools to offer a semester-long elective ethics course.
