New revelations in House Bill 6 corruption scandal pose increased threat to Gov. Mike DeWine’s re-election: Analysis

COLUMBUS, Ohio — The House Bill 6 corruption scandal already was going to be a campaign issue for Republican Gov. Mike DeWine.

But new details in the deal FirstEnergy Corp. signed with federal prosecutors last week put the scandal an additional step closer to the governor’s office, posing new complications as DeWine heads into what could be a challenging re-election year.

DeWine has faced heat for his closeness with FirstEnergy, which admitted last week to funding a $61 million bribery scheme to pass HB6, a nuclear bailout bill. A close campaign adviser, Josh Rubin, is a former FirstEnergy lobbyist, DeWine’s former Chief of Staff Laurel Dawson is a former business partner of Rubin’s, while Dawson’s husband, Mike Dawson, long has done consulting work for FirstEnergy. And Dan McCarthy, DeWine’s legislative affairs director, is a former FirstEnergy lobbyist, even helping set up a dark-money group that helped funnel money from FirstEnergy to Generation Now, a different dark-money group that was charged in the bribery scheme.

But no one in DeWine’s orbit had been directly and clearly implicated in illegal behavior. Until now.

In its deal with the feds, FirstEnergy said it paid a $4.3 million bribe to former Public Utilities Commission of Ohio Chairman Sam Randazzo weeks before DeWine hired him as the state’s top utilities regulator. Randazzo hasn’t been charged with a crime or identified by name in court filings, but FirstEnergy’s deal this week makes clear the company admitted to bribing Randazzo.

The company’s written deal with the Justice Department says that then-CEO Chuck Jones and another top FirstEnergy executive talked with Randazzo in December 2018, before DeWine had taken office, about Randazzo getting the PUCO job as they also negotiated the $4.3 million payment, structured as a buyout to an existing consulting agreement he had with the company.

“We’re gonna get this handled this year, paid in full, no discount. Don’t forget about us,” Jones said in a text to Randazzo that federal prosecutors included in the written deferred prosecution agreement.

“You guys are welcome anytime and any whereI [sic] can open the door. Let me know how you want me to structure the invoices. Thanks,” Randazzo responded, before adding, “I think I said this last night but just in case – if asked by the administration to go for the Chair spot, I would say yes.”

In late January 2019, Jones grew concerned that Randazzo wouldn’t get hired after details about Randazzo’s past business ties to FirstEnergy emerged, documents show. Elements opposed to Randazzo’s nomination, including American Electric Power, pushed them to the governor’s office.

But Randazzo cleared the screening process and DeWine picked him for the cabinet-level job.

“That bullet grazed the temple,” Michael Dowling, then a top FirstEnergy executive, texted to Jones, who responded: “Forced [State Official 1]/[State Official 2] to perform battlefield triage. It’s a rough game.”

The document doesn’t make completely clear who the state officials are.

After DeWine announced his hire, Randazzo helped develop HB6, and as PUCO chairman took action that helped FirstEnergy avoid a 2024 review of its rates that company executives worried would hurt its revenues, a concept company officials called the “Ohio hole,” according to the court filings.

After the PUCO announced the cancellation of the 2024 rate case in November 2019, Jones texted Randazzo an image of the company’s increased share price, the court filings say.

“Those guys are good but it wouldn’t happen without you. My Mom taught me to say thank you,” Jones said.

In a March 2020 text message exchange included in the court filings, Jones was discussing favorable actions Randazzo had taken for FirstEnergy, saying there was 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.”

Days before FirstEnergy first disclosed the $4.3 million payment in October 2020, the FBI searched Randazzo’s Columbus home. Asked about the search at the time, DeWine chose to defend Randazzo, going as far as to say there was no indication he was under FBI investigation.

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

It’s not hard to picture the statement – clipped of course to only include “I think he’s a good person” – appearing in a campaign ad.

Three days later, Randazzo resigned from the PUCO, denying wrongdoing, but saying he didn’t want to be a distraction.

Even without the HB6 scandal, DeWine faces a difficult re-election environment. There’s been Republican backlash nationally toward coronavirus restrictions — like the kind DeWine ordered last year — and DeWine has sparred with GOP state lawmakers who have voted to limit his ability to issue future health orders, overriding a DeWine veto.

Last year’s presidential race showed signs that DeWine had fallen out of favor with rank-and-file Republican voters – with DeWine and Lt. Gov. Jon Husted getting booed at multiple campaign events.

So the ingredients are there for a Republican challenger.

And Democrats and Republicans have been on the same page when it comes to attacking DeWine on HB6, calling on him to return any donations from FirstEnergy.

Jim Renacci, a Republican former congressman from Wadsworth, has announced his bid to unseat DeWine. Brad Parscale, a former top campaign aide to ex-President Donald Trump, is advising him. But Renacci lost in 2018 as Republicans’ nominee for the U.S. Senate. He disappointed others in his party by underperforming in a year that otherwise was great for Ohio Republicans. It remains to be seen whether he will fare better in 2022.

Renacci already has tied DeWine repeatedly to the HB6 scandal, calling it “DeWine’s $1.3 billion corruption scheme.” Parscale even retweeted a Thursday post from Columbus state Rep. David Leland, a former chairman of the Ohio Democratic Party.

“This announcement & the information about Sam Randazzo’s appointment as Ohio’s top utility regulator unfortunately places the largest bribery scandal in Ohio history at Mike DeWine’s doorstep,” Leland tweeted. “DeWine needs to come clean to Ohioans about his role in this historic scandal.”

Ohio Democrats meanwhile have struggled in the past to tie Republicans to scandal. In the 2020 election, even after the HB6 probe led to Republican House Speaker Larry Householder’s shocking arrest, national issues still overshadowed any local scandal, and Republicans gained seats in the state legislature.

Democrats also may have been cautious about House Bill 6, given that the bill passed with Democratic votes, and the fact that Democrats helped install Householder as speaker in the first place. Republicans questionably used this dynamic to muddy the waters last year.

But with FirstEnergy admitting it paid a $4.3 million bribe to Randazzo, that creates a direct line to DeWine.

“I think it really shows this latest scandal goes to the highest levels of our state government. It’s necessary for Gov. DeWine to tell the people of Ohio what he knew and when he knew it. I think that’s really what’s demanded from the papers that came out today,” Dayton Mayor Nan Whaley, a Democratic candidate for governor, said on Thursday.

DeWine issued a statement on Thursday saying he would donate political contributions he’d received from FirstEnergy to charity, as both Renacci and Whaley had called for him to do.

“As I have consistently said, we understood that Sam Randazzo had worked for manufacturing companies, energy companies, and consumers, and that he had done work for First Energy. Sam Randazzo was a well-known subject-matter expert in energy issues.

“If, as stated in the court documents, Sam Randazzo committed acts to improperly benefit First Energy, his motives were not known by me or my staff,” DeWine said.

DeWine hasn’t directly fielded questions on the latest developments in the House Bill 6 case. But with the scandal’s closer proximity to his office, and the likelihood that the case won’t be resolved before the May 2022 primary election, he’s likely to face plenty.

Politics reporter Seth A. Richardson contributed to this story.

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