CEO Fired After a 56 Million Mistake!

After FirstEnergy Corp. admitted in court to bribing state officials, it sent word to its former CEO about his salary

What Exactly Happened?

In November 2021, the compensation committee of the company’s board made a “recoupment demand” to former CEO Charles Jones for $56 million, according to a quarterly report filed Tuesday. The money includes his compensation over roughly three years. Investors suing the company have identified Jones as an orchestrator of the bribery operation.

The Akron-based utility company fired Jones in October 2020, after federal prosecutors accused then-House Speaker Larry Householder of racketeering and two of his alleged conspirators pleaded guilty. FirstEnergy later admitted to paying a combined $64 million into entities controlled by Householder and Sam Randazzo, the state’s top utility regulator, in exchange for favorable legislation and regulatory treatment.

The company said it would withhold any money it still owes Jones against the recoupment demand. However, the filing warns that there’s no guarantee Jones will pay the rest. It makes no mention of taking legal action.

“There can be no assurance that the efforts to seek recoupment from Mr. Jones will be successful and the approximately $56 million recoupment demand has not been recognized in FirstEnergy’s financial statements,” the filing states.

Jones has not been charged with a crime. FirstEnergy, as a company, entered into a deferred prosecution agreement with the U.S. Department of Justice last summer. It agreed to cooperate with related criminal investigations to avert a charge of honest services wire fraud. The company also paid a $230 million penalty and admitted to a lengthy set of facts detailing the operation. None of its current or former executives have been charged.

FirstEnergy admitted to using nonprofit entities “as a mechanism to conceal payments for the benefit of public officials and in return for official action.”

Householder, a Republican, has pleaded not guilty and awaits trial in January 2023, as does one other alleged conspirator, lobbyist and former state Republican Party chairman Matt Borges. Randazzo has not been charged with a crime and has maintained his innocence.

FirstEnergy said in its filing it paid about $60 million into nonprofits secretly controlled by Householder. As House Speaker, Householder in 2019 muscled a bill into law that’s worth about $1.3 billion to FirstEnergy, via a bailout of nuclear plants it owned at the time and other friendly provisions.

You may also like