Black money has helped utilities subsidize coal-fired power plants, delaying climate action at the expense of taxpayers

This story originated from Energy Information Network and Eye on Ohio and is part of ‘Climate & Democracy‘, a series from the Global Journalism Collaboration Cover the climate now.

It’s been three years since Ohio lawmakers first introduced the power plant bailout legislation that is now at the heart of the biggest corruption case in state history.

Since the passage of House Bill 6 in 2019, an FBI investigation uncovered a $60 million bribery scheme, resulting in vast admissions by FirstEnergy — a utility company at the heart of the scandal — and guilty pleas from three defendants in a federal criminal case.

Beyond that, however, accountability was slow in coming, and HB 6, which also dumped the state clean energy standardsstay in the books.

Just like the Intergovernmental Panel on Climate Change last report notes how vested interests have blocked progress on climate change mitigation, the HB 6 scandal shows how utility, fossil fuel, and nuclear interests have framed Ohio’s energy policy, even when that policy Conflicts with voter preferences on renewable energy.

“In Ohio, in the aftermath of HB 6, we see how energy issues are tied to the state of our democracy,” said Neil Waggoner, Ohio Senior Campaign Representative for the Beyond Campaign. Sierra Club Coal.

Even after the corruption was exposed in 2020, elected state leaders failed to fully investigate and address the issue, Wagoner continued. Instead, key people involved in HB 6 stayed on. House Speaker Larry Householder, who was arrested by the FBI in July 2020, won re-election and served until June 2021. In fact, the 45 lawmakers who supported HB 6 and were up for election in November 2020 won their races.

“They dug in and fought to maintain the status quo,” Wagoner said.

“It’s part of this larger question of why we give disproportionate influence to special interests in our politics,” said Matthew Hodgetts, an environmental policy expert at Case Western Reserve University in Cleveland. A small number of very wealthy individuals and corporations “have basically monopolized climate policy for generations now.”

And, he adds, “they are very open about what they do.”

High stakes

Ohio is a major energy producer and a major source of emissions, with a carbon footprint comparable to countries such as Spain or the United Arab Emirates.

In 2020, Ohio, with the seventh largest population, used the the fourth largest amount of electricity between all the states. About 81% of Ohio net electricity production comes from fossil fuels.

After a 2008 straight prepare the ground for a competitive marketannounced campaign contributions from utility, nuclear and coal interests jumped substantially. FirstEnergy gave more than $560,000 in 2010 and nearly $785,000 in 2012. Combined donations from the utilities, coal and nuclear industries topped $3.3 million in 2018.

But reported campaign donations don’t tell the whole story.

The 2010 Supreme Court decision in Citizens United v. Federal Election Commission allowed even higher levels of unreported political spending through for-profit or non-profit organizations.

FirstEnergy and others who donated to black money groups had a lot to gain from HB 6. The law provided approximately $1 billion in statewide taxpayer subsidies for two former FirstEnergy nuclear power plants over a six-year period. HB 6 also codified subsidies for two 1950s coal-fired power plants owned by other companies. These grants cost approximately $240 million since the beginning of 2020, while adding approximately 23 million tons of greenhouse gas in the air.

Houseer, the former House speaker, will face trial on criminal charges next year, along with lobbyist Matt Borges, who previously chaired the Ohio Republican Party. Two others people and the black money group Build Now filed guilty pleas. Another co-defendant, lobbyist Neil Clark, died of an apparent suicide last year after writing a book that says it all which, among other things, claims Ohio Governor Mike DeWine received a $5 million bribe from FirstEnergy.

FirstEnergy has also involved former Ohio Public Utilities Commission Chairman Sam Randazzo. DeWine was apparently Told that Randazzo had close ties to FirstEnergy prior to the appointment in early 2019. Randazzo’s anti-renewable position was well known.

Randazzo has denied any wrongdoing but resigned in November 2020, days after FBI agents raided his home. Before that, Randazzo helped shape HB 6. And he directed PUCO’s actions on calls for repeal and a full regulatory investigation.

Dominated by black money

the alleged crimes in the HB 6 scandal, the focus was on bribery, money laundering, and conspiracy by public officials and others as part of a corrupt racketeering enterprise.

Spending a lot of money on politics is not in itself a crime. Below United Citizenscorporations can spend almost unlimited amounts on political or advocacy issues, as long as the spending is not coordinated with a candidate’s campaign.

Yet the line between what is coordinated and what is not can become blurred. The money may pass through several organizations before being spent on advertisements or other activities. And reporting on funders of different groups is limited to non-existent. Any reporting that occurs often comes more than a year after the election.

These circumstances make it nearly impossible for voters to be fully informed on which business interests push different agendas. There is also little accountability for many misleading political ads. Ads to thwart a referendum on HB 6 touted a fake Chinese conspiracyfor example.

Common Cause Ohio, the Brennan Center for Justice and Voters’ Right to Know advocated for legislative fixes. For example, any group’s “independent” advertisement may be required to identify the group’s top three funders when running or sending an advertisement. This might help somewhat, but would still require some detective work if the backers themselves are other dark money groups.

“Nobody knows where that money is coming from. So there’s a lack of accountability,” said Ohio Rep. Juanita Brent, D-Cleveland Heights.

And corporate lobbyists and others who fund black money groups often want to stay in the shadows.

“FirstEnergy Corp. used the 501(c)(4) corporate form as a mechanism to conceal payments for the benefit of public officials and in exchange for official action,” said a company statement admitted in July 2021.

Many politicians also have little incentive to demand detailed reporting on black money.

“You’re not going to hold the purse strings accountable because you depend on the money,” said Ashley Brown, a former PUCO commissioner who headed the Harvard Electricity Policy Group.

Rig the system

If enough people are dissatisfied with the elected representatives, they can theoretically elect them. But gerrymandering effectively ensured one-party rule in the Ohio legislature, making it difficult for voters to hold politicians accountable for unpopular political actions.

“We think they can get away with it because they’re so safe in these districts,” Ohio Sen. Nickie Antonio, D-Lakewood, said. Since 2013, Republicans have enjoyed supermajorities in both houses of the General Assembly, while also holding the governorship.

In statewide elections over the past decade, approximately 54% of Ohioans voted Republican, compared to 46% Democrat. Yet mapping practices such as “cracking” and “packinggave Republicans non-veto majorities of nearly 76% in the Ohio Senate and about 64% in the Ohio house.

Election measures in 2015 and 2018 amended the state constitution to establish a redistricting commission. The goal was to use a transparent process to reflect voter preferences statewide without undue advantages for either party.

Yet, so far, the Supreme Court of Ohio has four times rejected the maps of the GOP-dominated redistricting commission for the Ohio General Assembly. April deposits by the members of the commission argue that they should not be detained in contempt for a last-minute change of slightly modified versions of earlier unconstitutional maps for those developed by independent cartographers.

It’s unclear what will happen with the Ohio gerrymandering crisis. For now, bills for a complete repeal of HB 6 remain stalled in the Ohio legislature. And even if nuclear subsidies are gone, propose repeals from close $288,000 per day for subsidies to coal-fired power stations have stalled since October. AEP Ohio, Duke Energy, AES Ohio and Ohio Valley Electric Corporation all testified against both bills. One of the two 1950s subsidized factories isn’t even in Ohio.

“We are seeing democratic erosion,” said Case Western’s Hodgetts. “And yet we seem powerless to stop it. … In the end, we ended up in a place where politics really isn’t run by the people.

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