Updated (7/26): Statement on Behalf of Former FirstEnergy CEO Chuck Jones Regarding Company's Deferred Prosecution Agreement

7/22: FirstEnergy To Pay $230 Million Under Deferred Prosecution Agreement Relating To Charge Of Conspiracy To Commit Honest Services Wire Fraud

July 22, 2021

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Reporting by Paul Ring • ring@energychoicematters.com

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Updated, 7/26:

Former FirstEnergy CEO Chuck Jones issued the following statement on July 23, following FirstEnergy's deferred prosecution agreement with Justice Department announced on July 22

Mr. Jones did not engage in any unlawful activity or violate any of FirstEnergy’s policies. Mr. Jones also believes that no other FirstEnergy employee engaged in unlawful activities in their dealings with government officials. Mr. Jones did not make or authorize any payment of any money to any public official in exchange for any official act.

Whether one agrees with it or not, the First Amendment and campaign finance laws allow the use of 501(c)(4) entities for appropriate political activity; allow individuals and corporations to support political candidates in a lawful manner; and allow individuals and corporations to lobby on behalf of legislation and government policies.

Mr. Jones is very disappointed that FirstEnergy would falsely implicate so many hard working and dedicated employees in wrongdoing who were committed to implementing the Board’s stated goals.

--- Statement from former FirstEnergy CEO Chuck Jones

Earlier:

The U.S. Attorney's Office for the Southern District of Ohio today announced that, "FirstEnergy Corp. has been charged federally with conspiring to commit honest services wire fraud and has agreed to pay a $230 million monetary penalty. The company signed a deferred prosecution agreement that could potentially result in dismissal of the charge."

The U.S. Attorney's Office for the Southern District of Ohio stated, "The charge and agreement stem from the U.S. Attorney’s Office’s ongoing public corruption prosecutions. In today’s court filings, FirstEnergy Corp., an Akron, Ohio-based public utility holding company, admits it conspired with public officials and other individuals and entities to pay millions of dollars to public officials in exchange for specific official action for FirstEnergy Corp.’s benefit."

The U.S. Attorney's Office for the Southern District of Ohio stated, "FirstEnergy Corp. acknowledged in the deferred prosecution agreement that it paid millions of dollars to an elected state public official through the official’s alleged 501(c)(4) in return for the official pursuing nuclear legislation for FirstEnergy Corp.’s benefit."

The U.S. Attorney's Office for the Southern District of Ohio stated, "The company also acknowledged that it used 501(c)(4) entities, including one it controlled, to further the scheme because it allowed certain FirstEnergy Corp. executives and co-conspirators to conceal from the public the nature, source and control of payments."

The U.S. Attorney's Office for the Southern District of Ohio stated, "FirstEnergy Corp. further acknowledged that it paid $4.3 million dollars to a second public official. In return, the individual acted in their official capacity to further First Energy Corp.’s interests related to passage of nuclear legislation and other company priorities."

The U.S. Attorney's Office for the Southern District of Ohio stated, "FirstEnergy Corp. has cooperated substantially with the government, and according to the deferred prosecution agreement, the company must continue to cooperate fully with the United States in all matters related to the company’s conduct described in the agreement and other conduct under investigation by the government, among other obligations."

Donald T. Misheff, nonexecutive chairman of FirstEnergy's board of directors, stated, "FirstEnergy's Board of Directors moved swiftly and decisively to investigate this matter and, along with the management team, has cooperated and will continue to fully cooperate with the U.S. Attorney's Office that is investigating the matter. This resolution and the actions we have agreed to implement build on the substantial steps we have taken over the past several months to strengthen our leadership team, ensure we have a best-in-class compliance program, and significantly modify our approach to political engagement as we work to regain the trust of our stakeholders. We thank the office of the United States Attorney for the Southern District of Ohio for its professionalism and engagement with FirstEnergy throughout this process."

The payment of the $230 million fine will be split equally between the U.S. Treasury and the Ohio Development Service Agency for the benefit of Ohio utility customers. The company expects to record a charge in this amount for the second quarter this year. This fine will not be recovered in rates or charged to customers.

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