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FirstEnergy CEO Steve Strah answers questions about HB 6 scandal


The work of piloting a Company accused of staging Ohio’s biggest corruption scandal through multiple government investigations, shareholder lawsuits and public outrage ran into Steve Strah 13 months ago.

Strah, who began his career as a meter reader in 1984, replaced fired Chuck Jones, CEO of FirstEnergy Corp. while the Akron-based company was the subject of a criminal investigation revealed in an astonishing indictment of five people in July 2020. Senior Vice Presidents Mike Dowling and Dennis Chack were also sacked.

Strah said the company must make major changes after being accused of paying $ 61 million in bribes to put Republican House Speaker Larry Householder and his team in power, then pass a $ 1.3 billion bailout bill to FirstEnergy and other utilities. The money was also used to defend Bill 6 from a referendum.

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In his first in-depth interview as CEO, Strah explained why the company agreed to pay $ 536 million in fines and refunds as part of a three-year program deferred prosecution agreement with the Department of Justice and discussed FirstEnergy’s efforts to enforce new ethics and compliance rules and training.

“Where I think we are at, there have been a number of things that have happened with a group of people who are no longer with our company. During this process of review and discovery, we learned that things need to change significantly here, ”Strah said from his office at 76. S. Main St. in downtown Akron.

“Obviously there were some fundamental things that needed to be fixed,” Strah said.

Although he answered most of the questions, Strah said he could not and should not speak or speculate about the ongoing discussions and investigations. With Householder’s federal charges pending, the deferred prosecution agreement also limits FirstEnergy’s comments.

“I certainly don’t want to comment on a process because I want to respect that process and really make sure it can take its course,” he said. “And we’re going to be there in an open nature to work with. It’s very hard to speculate at this point. But we’re committed.”

Strah declined to say whether he had any role in drafting and passing House Bill 6, saying the deferred prosecution agreement addresses the issue with the findings of the company and the Department of Justice. “It speaks for itself,” he said.

FirstEnergy and HB 6 investigations continue

FirstEnergy always faces several shareholders lawsuit, a Securities & Exchange Commission investigation, an audit of the Federal Energy Regulatory Commission and several lines of inquiry from PUCO.

In the prosecution agreement announced in July, FirstEnergy admitted to conspiring to pay public officials millions of dollars for the benefit of the public service. The agreement, signed by Strah, mandates corrective actions that FirstEnergy must take as part of a new corporate compliance program.

FirstEnergy CEO Steve Strah spoke about the company's future in Akron on Thursday.

The conditions include: continued cooperation, payment of a fine of $ 230 million – money that he can not try to recover from customers or claim a tax deduction, loss of 6, $ 3 million in a black money account, posting political and black money contributions made in 2021 and into the future on its website, and continuing to improve its ethics and compliance program.

The fine associated with giving Ohio customers a Reimbursement of $ 306 million in the coming years actually signals significant progress for the company, Strah said.

“While I want to stay focused on our future, the events of the past year have been very humiliating for our company, it has been for our management team,” he said. “But what I think is essential is that we have learned from a number of these issues by applying the lessons at this point, and we have done it. Even though we had to do some very difficult things in course. “

The heart of FirstEnergy’s activity is a renewed emphasis on ethics, compliance and accountability, says Strah.

“The investment community had an instinct to incorporate the potential impacts” of potential investigations and settlements, Strah said.

“What they are looking for is certainty,” he said. “Although it was a difficult but fair process, we were able to secure the deferred prosecution agreement. This added certainty for all stakeholders. “

Strah declined to say whether the $ 230 million settlement with the Justice Department was negotiated versus a higher amount. He called the fine “significant. And I understand its significance.”

“It was an effort by our company to fully cooperate with the Department of Justice,” he said. “And I think it was well received. Therefore, we were able to come to an agreement.… I think the agreement, in the end, speaks for itself. It really is.… It ‘s true. was a very open and collaborative process. In the end, it was fair. “

“We thought it was important to put this chapter behind us. And very luckily we were able to do it,” he said.

Advancing FirstEnergy

FirstEnergy does a significant amount of work in ethics and compliance, Strah said.

“Where we want to be as a business when it comes to ethics and compliance is best in class,” he said.

The changes include the addition of new directors to the board who offer new perspectives, as well as the hiring of new senior managers to oversee legal matters, ethics and compliance, risk, rates and regulatory affairs, and auditing, he said. They work on and reinforce key policies and practices, he said.

“It sets a new tone for our business. I’m setting a new tone for the business in terms of openness and collaboration,” he said. “As a company, we focus on each individual in this organization to just do the right thing. … The only obligation you have is to raise your hand and speak. “

The result should not be that top leaders hold employees accountable, but that employees hold each other accountable and can raise their hands in an open environment if they see something that doesn’t look or feel right, has said Strah.

Limited political contributions

Beyond household payments, in November 2020, FirstEnergy revealed to the Securities & Exchange Commission that it paid $ 4.3 million in January 2019 to someone who has become an Ohio utility regulator. Days later, FBI agents executed a search warrant on the Columbus condo of attorney Sam Randazzo, who was chairman of the Ohio Public Services Commission.

Strah said the company has also taken an in-depth look at how it makes political contributions.

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“I think what you are going to find out is that we will limit our involvement to a smaller part of this arena. And that will directly relate to the initiatives that we need to move forward from a customer perspective. or business, ”Strah said. . “I should be able to sit at a customer’s kitchen table and explain why we are involved in an issue.… We have also improved our transparency in terms of reporting.”

Particularly in Ohio, all employees have felt the impact of the scandal and investigations involving FirstEnergy, Strah said.

“There really was a feeling of deep disappointment,” he said. “It created enormous uncertainty. … At the end of the day, you have to be patient enough to understand that a number of issues are being investigated and you can’t really tell employees what exactly is going on, just for the sake of the sanctity of the job. ‘investigation and not come out in front of anything, which would be a breakdown of that confidence. “

FirstEnergy was to demonstrate an important and swift path to the future of the business, Strah said.

“I think the mindset of the employees now is one of continuous excitement, to go out and embrace the future, and not necessarily let the future come to us,” Strah said.

Important problems in the “rear view mirror”

When he became CEO at the start of the scandal, he and the management team and board of FirstEnergy needed to understand the circumstances they found themselves in, what happened and how they were going to deal with it, Strah said. “Our board of directors was very active in the process,” and worked hard and fairly to investigate, he said.

“At the time, I was president of the company, so I was running the operation,” Strah said. “Even though things happened, I quickly realized that we had to move the business forward and develop our renewed plan for the future. This is what we have done and this is what we are fully focused on. “

It is largely focused on the future, not on Bill 6.

“I really see this, with all due respect, as something that is behind us, in our rearview mirror,” Strah said. “We’re moving forward in a really good way as a business, the things we’ve had to do to rebuild trust, the things we’re doing to make our business more efficient, moving forward. … I’m spending literally my energy to move the business forward. “

Beacon Journal reporter Jim Mackinnon can be reached at 330-996-3544 or Follow him @JimMackinnonABJ on Twitter or

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