The former chairman of the Public Utilities Commission of Ohio has been indicted by a federal grand jury on bribery and embezzlement charges, the U.S. Attorney’s Office for the Southern District of Ohio announced in a news release Monday.
Sam Randazzo, 74, of Columbus, self-surrendered at U.S. District Court in Cincinnati Monday morning, the release said. Randazzo is charged in an 11-count indictment that was returned on Nov. 29 and he was scheduled for an initial appearance later Monday.
[UPDATE: Former PUCO chair pleads not guilty for his alleged part in FirstEnergy scandal]
The charges stem from an ongoing investigation into what federal prosecutors have called the biggest political bribery scandal in state history, where Akron-based FirstEnergy paid more than $60 million in 2018 and 2019 to get the legislature to pass and protect a $1.3 billion bailout that was mostly intended to benefit FirstEnergy.
Former House Speaker Larry Householder, R-Glenford, in June was sentenced to 20 years in federal prison after a jury found him guilty of racketeering for his role in the scheme. Former Ohio GOP Chairman Matt Borges was sentenced to five years in the same case.
FirstEnergy fired two of its top executives, CEO Chuck Jones and Vice President Michael Dowling. And it signed a deferred prosecution agreement admitting wrongdoing and committing to pay a $230 million fine.
Jones, Dowling and Randazzo denied wrongdoing, but in the agreement, FirstEnergy said the executives paid Randazzo a $4.3 million bribe just as Ohio Gov. Mike DeWine was nominating him to be the top Ohio regulator overseeing FirstEnergy.
“Public officials — whether elected or appointed — are tasked with upholding the highest level of integrity in their duties and responsibilities. Such service to the public must be selfless, not selfish,” said U.S. Attorney Kenneth L. Parker in Monday morning’s release. “Through the indictment unsealed today, we seek to hold Randazzo accountable for his alleged illegal activities.”
FirstEnergy said the payment was made through Randazzo’s “consulting company in return for (Randazzo) performing official action in his capacity as (Public Utilities Commission of Ohio) Chairman to further FirstEnergy Corp.’s interests” and that “it was under no legal obligation to make the payment … ”
Randazzo was the PUCO chairman from April 2019 until November 2020, when he resigned.
Randazzo faces one count of conspiring to commit travel act bribery and honest services wire fraud, two counts of travel act bribery, two counts of honest services wire fraud, one count of wire fraud and five counts of making illegal monetary transactions.
According to the indictment, Randazzo allegedly received more than $4.3 million from an energy company and its affiliates to provide favorable official actions for the company through PUCO proceedings.
For example, it is alleged that in November 2019, Randazzo included language in a PUCO Opinion and Order that would address an issue for the energy company that was slated to happen in 2024.
“Stock is gonna get hit with Ohio 2024. Need Sam to get rid of the ‘Ohio 2024 hole,’” an energy executive text message read. Another executive messaged, in part: “I spoke with Sam today. Told me 2024 issue will be handled next Thursday.” The next Thursday, the PUCO decision included language alleviating the 2024 issue.
A March 2020 text message from an executive mentions that Randazzo “will get it done for us but cannot just jettison all process.” The message references specific official actions before continuing: “…a lot of talk going on in the halls of PUCO about does he work there or for us? He’ll move it as fast as he can.”
It is alleged that Randazzo received the bribe money from the energy company through his consulting business, Sustainability Funding Alliance of Ohio, Inc. (SFA), which was registered in Ohio in March 2010. SFA filings name Randazzo as the president and sole representative of the business and lists Randazzo’s home address as the business address.
The charging document alleges that Randazzo also used his consulting business, SFA, to carry out an embezzlement scheme, funneling to himself at least a million dollars meant for an association of large, industrial energy users in Ohio.
Randazzo was the general counsel of the industry group for multiple years, including from 2010 until his PUCO appointment, and at times served as the industry group’s executive director. Randazzo controlled the industry group’s bank accounts.
It is alleged Randazzo entered into settlements with companies on behalf of the industry group and kept portions of the settlement payments for himself. As one method to conceal his alleged embezzling, Randazzo allegedly created a fictitious member of the industry group that received payments along with legitimate members.
For example, in March 2019, it is alleged Randazzo attempted to conceal his embezzling by wiring approximately $1.1 million between bank accounts under his control.
If convicted as charged, the defendant could face up to 20 years in prison.
In the release, FBI Cincinnati Special Agent in Charge J. William Rivers said the indictment outlines an alleged scheme in which a public regulatory official ignored the Ohio consumers he was responsible for protecting, instead taking a bribe from an energy company seeking favors.
“The FBI will remain vigilant in investigating allegations of corruption at all levels of government and hold those who violate the law accountable for their actions,” he said.
Last week, it was revealed that plaintiffs in a civil suit related to the massive bribery and money-laundering scandal have subpoenaed documents from DeWine and they’re scheduling a sworn deposition with Lt. Gov. Jon Husted.
Ohio Consumers’ Counsel Maureen Willis in a statement Monday called the indictment an important step to bring justice to Ohio utility consumers.
“It underscores the need for near-term reform of the PUCO selection process that led to his appointment as Chair of the PUCO,” she said. “OCC’s calls for reform so far have gone unanswered. Ohioans deserve better from the public officials in this state.”
