PUCO Chair Sam Randazzo Resigns Following FBI Search, FirstEnergy Report

Nov 20, 2020

Gov. Mike DeWine on Friday announced the resignation of Public Utilities Commission chair Sam Randazzo, several days after an FBI search of his Columbus home.

On Thursday, Randazzo was implicated in a FirstEnergy report that said several former executives improperly made a $4 million payment last year to a firm tied to a future Ohio utility regulator.

"The FBI search of his home, coupled with the SEC filing yesterday, that he would going forward – his words – be a distraction from the work the PUCO and felt that this is the best thing for him to do," DeWine said at a press conference Friday, while thanking Randazzo for his service.

DeWine appointed Randazzo, a longtime utility attorney and lobbyist, to the position of PUCO chair in February 2019. In recent months, Randazzo has been involved in an audit of FirstEnergy over its alleged role in a $61 million federal racketeering case.

On Monday, FBI agents searched and retrieved several boxes from Randazzo's townhome.

"Regardless of disclosures of prior business relationships to you and your team," Randazzo wrote in his letter to DeWine, "the impression left by an FBI raid on our home, the statement included in FirstEnergy Corp.'s filing with the Securities and Exchange Commission yesterday and the accompanying publicity will, right or wrong, fuel suspicions about and controversy over decisions I may render in my current capacity."

The FBI declined to comment on the purpose of Monday's search. The next day, the governor said there was no indication Randazzo was the target of an investigation.

“We’re waiting for additional information, quite candidly,” DeWine said. “I hired him. I think he’s a good person. If there’s evidence to the contrary, we’ll act accordingly. But I’m not going to act without the facts.”

Randazzo's is just the latest name in a statewide shakeup that began with a federal corruption investigation involving FirstEnergy, former Ohio House Speaker Larry Householder, and several top lobbyists.

In its filing Thursday with the Securities and Exchange Commission, FirstEnergy said former senior management members were fired after an internal investigation discovered they made a $4 million payment to terminate a "purported consulting agreement" with an unnamed entity.

The report says that entity is associated with an individual who was then appointed as an "Ohio government official directly involved in regulating Ohio companies." While the filing does not single out Randazzo by name, the PUCO chair fits the filing's description.

"Due to the ongoing nature of the investigations, I’m not able to elaborate beyond the 10-Q filing," said FirstEnergy spokesperson Jennifer Young. "In addition, the company does not name individuals, other than company employees or directors, in its public filings. The board will continue to take decisive action to address this matter and ensure we have effective processes and procedures in place to uphold our standards and values going forward."

FirstEnergy has fired CEO Chuck Jones and several other executives in the last month for violations of company policy.

Federal investigators say a utility believed to be FirstEnergy paid millions of dollars through a dark money group to Householder and several others, in exchange for the passage of a controversial nuclear bailout law. The conspiracy also allegedly worked to stop a referendum aimed at overturning HB6, which passed by the legislature and signed into law by DeWine last year. 

Householder, who was ousted as Speaker after his arrest, has pleaded not guilty. However, two of his alleged associates pleaded guilty to the racketeering conspiracy charges.

PUCO is in the middle of reviewing FirstEnergy's political expenditures related to HB6. But Randazzo has been criticized for potential conflicts of interest in the matter, including owning a company that's a creditor for Energy Harbor, the former FirstEnergy subsidiary that owns two nuclear plants benefiting from HB6. Randazzo has said that he is not involved with legal work or lobbying for any businesses regulated by PUCO.

Environmental groups that long opposed Randazzo celebrated news of his resignation and reiterated calls to repeal HB6, which also eliminated the state's green energy mandates.

"Mr. Randazzo’s decades-long history of advocating against clean energy raised serious concerns about whether he would be able to support and carry out Gov. DeWine’s stated 'all-of-the-above' energy strategy," said Heather Taylor-Miesle, president of the Ohio Environmental Council Action Fund, in a statement. "Decisions made by the PUCO and the Ohio Power Siting Board, under his tenure, indicated and confirmed his deep biases against renewable energy and energy efficiency."

State Rep. David Leland (D-Columbus), one of the Democrats leading the push to repeal HB6, issued a written statement following Randazzo's resignation.

"The dominoes continue to fall as Ohioans keep learning just how deep the corruption that created HB6 is," Leland wrote. "So far, we have had five federal indictments, two guilty pleas, five energy executives that have been terminated and now the top utility regulator in the state and an architect of HB6 has resigned. But what hasn’t happened? House Republicans still stand in the way of repealing HB6."

PUCO vice chair M. Beth Trombold will take the position of acting chair until a new leader is named.