Editor’s Note: Thomas Suddes is on vacation this week. His column will return next Monday.
Protecting public welfare is a primary function of government, right?
When professionals such as doctors and lawyers break the law or violate standards of acceptable behavior, they aren’t just slapped with a fine, told to replace their office managers, and allowed to go back to business as usual. In the interest of public safety, state regulators hold these professionals accountable by suspending or revoking their license to practice.
But how do we hold a multibillion-dollar corporation accountable for misconduct or criminal activity in a way that also protects the best interests of the public?
I’m talking about FirstEnergy, the Akron-based utility company behind the largest public corruption scandal in Ohio history. The scandal involved Larry Householder, former speaker of the Ohio House, and Generation Now, a 501(c)(4) “social-welfare” nonprofit that can keep its donors hidden, or “in the dark.”
FirstEnergy has admitted to funneling $60 million to Generation Now. According to federal prosecutors, the purpose of this “dark money” was to support Householder’s successful bid to become speaker, buy legislation known as House Bill 6, and derail a subsequent petition drive for a referendum against HB 6.
The intent of HB 6 was to benefit FirstEnergy and a subsidiary at the expense of Ohio taxpayers and utility consumers by providing a $1.3 billion bailout of two failing nuclear power plants, subsidizing two coals plants (one of which is in Indiana), and dismantling previously legislated energy-efficiency standards.
When the conspiracy was uncovered and indictments issued, state legislators repealed the nuclear power plant bailout, but ratepayers are still on the hook for the coal plants.
Householder and Matt Borges, the former head of the state Republican Party, are currently on trial in federal court on bribery charges. Attorneys for Householder have argued that the use of dark money is constitutionally protected free speech, allowed under the U.S. Supreme Court’s 2010 Citizens United decision. Prosecutors have presented evidence that a co-conspirator suggested as long as Householder could deny involvement with Generation Now, this social-welfare nonprofit had the “right” to spend as much money as it wanted to support Householder and HB 6. However, although Generation Now was incorporated by an advisor to Householder, federal officials say Generation Now was operated by Householder himself.
For financing Generation Now, FirstEnergy has fired a few executives and agreed to pay a $230 million penalty in a deferred prosecution agreement with the federal government. Unlike doctors and lawyers who do wrong, however, FirstEnergy is still in business.
Is a financial penalty enough to protect the public welfare? Why not revoke FirstEnergy’s charter, just as we revoke the licenses of professionals who commit crimes or pose a risk to the public?
Precedent exists for revoking corporate charters here in Ohio. In our early history, a corporate charter specified the conditions under which a company was expected to operate. When a business acted illegally or beyond its authority, as defined in its charter, either the legislature or the Ohio Supreme Court could revoke the charter and dissolve the company. In 1892, Ohio’s Republican Attorney General, David K. Watson, won a lawsuit against Standard Oil. The largest and most powerful corporation at the time, Standard Oil lost its appeal to exist when the U.S. Supreme Court ordered its dissolution in 1911.
FirstEnergy helped subvert our representative democracy by using its wealth — and so-called “corporate constitutional rights” granted by the Supreme Court—to silence the voice of the people. One of the ways we can protect ourselves from further harm is to encourage Attorney General David Yost to file a lawsuit that specifically calls for the revocation of FirstEnergy’s charter. After all, a financial penalty for such a large corporation is just the cost of doing business — and replacing executives is no assurance a corporation won’t resort to previous tricks.
Troy resident Deb Hogshead is a volunteer with Move to Amend Miami County and Greater Dayton Move to Amend.
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