Progressive Democrat says New Jersey should investigate influence efforts associated with passing subsidies here and calls on federal regulators to seize nuclear power plants
After a federal jury convicted former Ohio House Speaker Larry Householder and former Ohio Republican Party chair Mathew Borges for participating in a racketeering conspiracy, New Jersey Democrat Lisa McCormick called on regulators to take over one of the United States’ largest investor-owned utilities with 6 million customers in Ohio, Pennsylvania, West Virginia, Virginia, Maryland, New Jersey, and New York.
The case in federal court proved that FirstEnergy Corp. paid $61 million in bribe money in through various dark money groups to help Householder seize political power and in turn pass and defend a $1.3 billion bailout law known as House Bill 6.
“A corporation in a heavily regulated industry could not spend $61 million in bribes without the approval and cooperation of top company officials,” said McCormick. “Those same officials are in possession of licenses to operate nuclear power plants and given the industry’s track record, from Karen Silkwood’s murder until today, it is obvious that the people entrusted with such authorization are undeserving.”
New Jersey lawmakers awarded $300 million in annual subsidies after bitter legislative battle. Critics of the legislation, enacted by Gov. Phil Murphy in 2019, said the energy companies exaggerated the financial situations facing their nuclear plants, but the Ohio revelations about undue political influence raise new questions concerning the methods used to persuade lawmakers.
McCormick said the state’s ratepayer advocate, the Sierra Club, and AARP raised valid concerns about the measure before Murphy signed it, but nobody seriously investigated the possibility of bribery.
The massive bipartisan infrastructure bill signed into law in mid-November by President Biden included $6 billion for the Energy Department to establish a Civil Nuclear Credit Program, intended to “help preserve the existing US nuclear reactor fleet.”
Holtec International completed the purchase of the Palisades reactor in Michigan in June 2022, announced plans to reapply for funds from the Civil Nuclear Credit in order to restart that facility.
Holtec International, which is connected to South Jersey political boss George E. Norcross III, won the second-largest tax break in New Jersey history after giving a false answer on a 2014 application in response to a question about being prohibited from working with a federal agency in sworn statements. Nothing ever came from investigations into Norcross, the false statement, or other allegations about taxpayer money but the political boss showed Murphy the limit of gubernatorial power.
“There are currently 93 nuclear reactors operating in the United States but any operated by companies that engaged in bribery should be immediately seized by federal regulators,” said McCormick. “There is no reason to wait until something worse happens.”
McCormick, a consistent advocate for a corporate death penalty law that would allow government officials to take away a company’s charter if it engages in criminal activity, said that FirstEnergy has a long record to justify immediate action to strip profit-motivated officials of their licensing to operate nuclear power facilities.
The former owner of the Three Mile Island nuclear plant, FirstEnergy was identified in a 2017 report conducted by the University of Massachusetts Amherst as ninth among the country’s top 100 largest greenhouse polluters.
FirstEnergy was required to pay $1.5 billion by 2011 as part of a settlement with the United States Environmental Protection Agency, which alleged that the company failed to install pollution control equipment at its coal burning plants.
FirstEnergy dumped more than 20 billion gallons of coal ash and smokestack scrubber waste into Little Blue Run Lake, a body of water in West Virginia and Pennsylvania that has contaminated the drinking water source for more than three million people with arsenic, sulfates, sodium, calcium, magnesium and chloride.
In a 2006 plea bargain with the U.S. Department of Justice that spared the company from criminal prosecution, FirstEnergy acknowledged a cover-up of serious safety violations by former workers at the Davis-Besse Nuclear Power Station.
“The Ohio bribery scandal revived questions about whether aging nuclear plants deserve the subsidies and how they were awarded,” said Lisa McCormick. “New Jersey was one of four states to allow ratepayer subsidies to avoid closing nuclear power plants, along with Ohio, New York, and Illinois. Every taxpayer deserves to know if bribery influenced the decision makers who passed this unfortunate legislation.”
In New Jersey, Public Service Enterprise Group and Exelon Corp. got subsidies worth $300 million a year, funded by a surcharge on electric customers, to keep three nuclear plants open in South Jersey.
“This should raise questions in New Jersey whether the ZEC (zero-emission certificate) legislation is necessary,’’ said Glen Thomas, president of the P3 Group, a coalition of energy suppliers that opposes nuclear subsidies. “We now know in Ohio the only reason these bills passed (was) legislators were being bribed.’’
On July 21, 2020, Householder, Borges, and three others were accused of accepting $60 million in bribes from FirstEnergy in exchange for $1.3 billion worth of benefits in the form of Ohio House Bill 6, which increased electricity rates and provided that money as a $150 million per year bailout for the Perry Nuclear Generating Station and Davis–Besse Nuclear Power Station.
The Board of Directors of FirstEnergy Corp. fired the company’s Chief Executive Officer Charles E. Jones and two other executives: its Senior Vice President of Product Development, Marketing, and Branding; and its Senior Vice President of External Affairs, effective immediately on October 19, 2020.
A year later, on September 16, 2022, FirstEnergy Corp. Chief Executive Steve Strah resigned from the board of directors and immediately retired. Strah signed a July 2021 deferred prosecution agreement on behalf of the company, which agreed to pay a $230 million fine, cooperate with federal prosecutors and admit that it used dark money to bribe the state officials who helped land the $1.3 billion bailout.
Gov. Mike DeWine signed legislation dismantling two key parts — though not all –of the corruption-ridden bailout that give billions in ratepayer dollars to energy companies.
The Republican initially opposed the rollback bill but he caved to pressure after authorities revealed the largest bribery scheme in Ohio history.