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FirstEnergy Execs Fired For $4M Payment To Entity Connected to Unnamed State Regulator

Securities and Exchange Commission

FirstEnergy's filing with the Securities and Exchange Commission says former senior management members were fired after an internal investigation discovered certain executives made a $4 million payment to an entity with ties to an unnamed state regulator.

FirstEnergy says the $4 million was payment to terminate a 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."

The filing comes just days after FBI agents raided the home of Sam Randazzo, who chairs the Public Utilities Commission of Ohio.

However, FirstEnergy doesn't name the state regulator and FBI agents have not released more details on their investigation.

Jennifer Young, FirstEnergy's spokesperson, says "Due to the ongoing nature of the investigations, I’m not able to elaborate beyond the 10-Q filing. In addition, the company does not name individuals, other than company employees or directors, in its public filings."

Young says in a written statement, "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."

The company fired CEO Chuck Jones and two other executives last month for then-undisclosed violations.

Meanwhile, federal investigators say a utility believed to be FirstEnergy paid millions of dollars in a bribery scheme to get a nuclear power plant bailout passed.

Among the matters considered with respect to the determination by the committee of independent members of the Board of Directors that certain former members of senior management violated certain FirstEnergy policies and its code of conduct related to a payment of approximately $4 million made in early 2019 in connection with the termination of a purported consulting agreement, as amended, which had been in place since 2013. The counterparty to such agreement was an entity associated with an individual who subsequently was appointed to a full-time role as an Ohio government official directly involved in regulating the Ohio Companies, including with respect to distribution rates. It has not been determined if the payments were for the purposes represented within the consulting agreement. The matter is a subject of the ongoing internal investigation related to the government investigations

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