Utility fraud and corruption are threatening the clean energy transition
“The scariest part of this wave of utility scandals is what we don’t know: How many utilities have committed crimes that prosecutors haven’t noticed?” (Image: Generated by Open AI’s Dall E)
By Mario Ariza and Kristi E. Swartz for Floodlight. Also published in Mother Jones
At a press conference last month, flanked by sheriffs and attorneys, Ohio Attorney General David Yost announced the indictments of two utility executives who allegedly tried to “hijack” state electricity policy for their own corrupt ends by paying $4.3 million in bribes to Sam Randazzo, then chair of the state Public Utilities Commission. The two men stand accused of trying to bilk taxpayers out of $1.2 billion on behalf of their former employer, FirstEnergy.
This was just the latest in an ongoing criminal probe of utility corruption that reached deep into the Ohio statehouse. Randazzo had been indicted previously by the Department of Justice, accused of working secretly with executives for more than a decade to secure favorable regulations for FirstEnergy—which pleaded guilty to federal fraud charges in 2021 for its role in the scandal. Last year, three lobbyists, along with former Ohio House Speaker Larry Householder, pleaded guilty to or were convicted of federal racketeering charges. (Faced with the prospect of years in prison, one of the lobbyists took his own life.) Another utility operating in Ohio, American Electric Power, is under investigation by the Securities and Exchange Commission. “Power is inherently seductive and corrosive,” noted a somber Yost, after laying out the latest alleged plot.
The Ohio scandals are no fluke. They are part of a generational resurgence of fraud and corruption in the utility sector, according to a Floodlight analysis of 30 years of corporate prosecutions and federal lawsuits. And they come at a time when trillions of dollars and the health of the planet are at stake as some power companies embrace—while others seek to block—the transition from fossil fuels to wind, solar, and battery storage.
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