Strings Attached: How utilities use charitable giving to influence politics and increase investor profits
FirstEnergy
FirstEnergy Corporation’s regulated electric distribution companies provide service to 6 million customers in Maryland, Ohio, New Jersey, Pennsylvania, and West Virginia. FirstEnergy Solutions, a bankrupt subsidiary, is a competitive electricity supplier that also serves millions of customers in those same states and Michigan.
Basic Facts:
- EPI estimate of FirstEnergy’s total charitable giving in most recent 5 years: $28,312,221. (1)
- Name of Foundation: FirstEnergy Foundation
- FirstEnergy Foundation Giving (2013-2017): $28,312,221
- 2017: $6,361,732
- 2016: $5,388,098
- 2015: $5,904,445
- 2014: $5,556,543
- 2013: $5,101,403
- Corporate Charitable Giving (2013-2017)
- FirstEnergy recently published its first Corporate Responsibility Report in a number of years. The FirstEnergy Foundation “awarded $54 million in grants over the past decade,” according to the report. The report also said the foundation gave “$6.6 million in 2017 and $5.8 million in 2016,” but did not list total grants for 2013-2015.
- Sum of total charitable giving in most recent 5 years according to FERC Form 1 and Form 60 filings: $13,268,156. (2)
- 2017: $1,905,650
- 2016: $1,778,027
- 2015: $1,374,226
- 2014: $1,250,679
- 2013: $6,965,151
- While outside of the 2013-2017 scope of this report, FirstEnergy subsidiaries’ reporting of donations to FERC rose to $27,239,980 in 2018, of which more than $15 million was donated by the Ohio Edison Company.
- The FirstEnergy Foundation reported making just over $8 million in grants and contributions on its annual Form 990 report to the IRS.
- FirstEnergy Foundation President:
- Dolores “Dee” J. Lowery, vice president of corporate affairs and community involvement, FirstEnergy Corp.
- FirstEnergy Foundation Board of Directors:
- Leila L. Vespoli, Executive Vice President of Corporate Strategy, Regulatory Affairs, and Chief Legal Officer, FirstEnergy Corp. (Retired in 2019)
- Ebony L. Yeboah-Amankwah, Vice President, Deputy Chief Counsel, Corporate Secretary, and Chief Ethics Officer, FirstEnergy Corp. Previously vice president and executive director of state and federal regulatory legal affairs
- Steven E. Strah, Senior Vice President and Chief Financial Officer, FirstEnergy Corp.
- Steven R. Staub, Vice President and Treasurer, FirstEnergy Corp. Treasurer, FirstEnergy Corp. Political Action Committee
- Daniel M. Dunlap, Assistant Corporate Secretary, FirstEnergy Corp.
- Jennifer L. Geyer, Director of Administrative Services, Firstenergy Corp.
- Samuel Belcher, Senior Vice President and President, FirstEnergy Utilities
Examples of FirstEnergy using charitable giving to manipulate policy:
United Way
“Since 2001, the FirstEnergy Foundation, employees and retirees have contributed nearly $35 million to United Way campaigns in Ohio, Pennsylvania and New Jersey – helping to ensure the safety and health of the communities we serve,” according to FirstEnergy Corp.’s website.
Charles E. Jones, the CEO of FirstEnergy Corp., pointed to his company’s support for United Way in 2017, when he asked state lawmakers to support a bill to bail out FirstEnergy’s nuclear power plants in Ohio.
“I believe it’s important to understand what’s at stake, so let me share just a few of the many benefits that Ohio’s two nuclear facilities – Davis-Besse and Perry – bring to our customers, communities and the environment,” Jones said.
“Over the past 10 years, support provided by Davis-Besse and Perry employees and the FirstEnergy Foundation totaled more than $24 million to local United Way chapters and more than $2.1 million to the Harvest for Hunger campaign,” he said.
That bill failed, but it would have cost Ohio consumers $300 million per year to bail out the two nuclear power plants, far more than the amount FirstEnergy donated to United Way over a decade. A later Ohio bill, HB 6, that became law in 2019, will force the state’s consumers to pay around a billion dollars to bail out the same plants between 2021 and 2027.
Some United Way chapters that have received funding from FirstEnergy have supported proposals to bail out the utility’s coal and nuclear power plants. In doing so, they have generally focused on the benefits made possible by FirstEnergy’s financial contributions to their organizations, which are small compared to the costs consumers would pay to bail out the plants.
In 2017, the Pennsylvania-based United Way of Beaver County (UWBC) submitted comments to the Federal Energy Regulatory Commission (FERC) in support of Secretary of Energy Rick Perry’s proposal to bail out coal and nuclear power plants.
“The employees and corporate donations of the First Energy Nuclear Power Plant and the Bruce Mansfield Coal Generation Plant make up almost 15% of the annual donations of the United Way of Beaver County,” Michael J. Rubino, executive director of UWBC said in the comments. “In dollars that is approximately $120,000 annually to help provide aid to thousands of people in Beaver County PA.”
A Beaver County Times news article included a similar quote from Rubino, and cited a spokesperson for FirstEnergy who said the utility and it employees gave around $653,000 to the UWBC over five years.
Robi Lombardo, FirstEnergy’s external affairs manager for Beaver County, serves on the UWBC’s board of directors. The FirstEnergy Foundation gave the UWBC $43,805 in 2017.
FERC later rejected Perry’s proposal, which according to one analysis by the Brattle Group could have cost consumers as much as $34 billion.
United Way of Jefferson County (UWJC), located in Ohio, submitted similar comments supporting the same proposal in 2017, and received $6,889 from the FirstEnergy Foundation that same year. FirstEnergy’s Sammis coal-fired power plant is located in the county.
“The continued operation of baseload coal and nuclear power plants translates into safer and more prosperous communities,” UWBC and UWJC both said in their comments to FERC.
Coal-fired power plants are a top source of harmful air pollution and greenhouse gas emissions. The Bruce Mansfield and Sammis coal-fired power plants are included in a list of “super polluters” compiled by the Center for Public Integrity.
The United Way of Lawrence County (UWLC) also filed comments backing Perry’s 2017 proposal to bail out coal and nuclear plants, and received $16,107 from the FirstEnergy Foundation that year. John Greenwood, FirstEnergy’s external affairs manager for Lawrence County, serves on UWLC’s board.
United Ways have supported other proposals to bail out FirstEnergy’s power plants.
UWBC is currently listed as a member of Nuclear Powers Pennsylvania, a group backed by FirstEnergy Solutions that supports state legislation to bail out nuclear power plants in Pennsylvania.
In 2014, UWJC supported FirstEnergy’s Electric Security Plan in comments to Ohio Governor John Kasich and the Public Utilities Commission of Ohio. UWJC said the plan would “help ensure the continued operation” of the Sammis coal plant, and voiced appreciation for FirstEnergy’s investments in the community.
The Greater Abyssinia Baptist Church
The Greater Abyssinia Baptist Church, located in Cleveland, received $100,000 each year from the FirstEnergy Foundation in 2016 and 2017. Rev. E. Theopolis Caviness, the church’s pastor, has gone to bat for FirstEnergy on a number of occasions.
In 2016, Caviness was the lead signer on a letter from the Cleveland Clergy Council to Governor Kasich supporting FirstEnergy’s Electric Security Plan.
“Dating back to May of 2015, our coalition of urban ministers had various concerns regarding FirstEnergy’s Electric Security Plan,” Caviness wrote in the letter. “In fact, several of our members marched in protest at FirstEnergy’s Annual Shareholders Meeting.”
They decided to support the utility’s plan only after meeting with FirstEnergy’s CEO, according to the letter, which listed Caviness as the Cleveland Clergy Council’s chair.
“FirstEnergy’s CEO Chuck Jones graciously invited our leadership to the company’s Akron headquarters and laid out all the specifics of its proposal, including generous support for low income customers, a strong commitment to environmental justice, and protection for thousands of Ohio jobs,” Jones wrote.
Cleveland Scene later reported that, “Caviness said in an interview that Kasich responded by mail expressing surprise that an anti-poverty group was backing a corporate giant, and said he had forwarded Caviness’ concerns to the PUCO.”
The Ohio Consumers’ Counsel called the plan a “bailout” for FirstEnergy, and estimated it would cost consumers $3.9 billion over eight years. Environmental groups also opposed the plan, because it put consumers on the hook for bailing out uncompetitive coal plants owned by FirstEnergy.
Another rider included in the plan was eliminated by the Ohio Supreme Court in 2019, but not before it cost FirstEnergy customers $168-$200 million per year – money that will not be refunded due to a loophole in Ohio law that benefits the state’s utilities.
In 2017, another member of the Cleveland Clergy Council supported a state bill to bail out FirstEnergy’s nuclear plants with testimony before the Ohio House Public Utilities Committee. The testimony was delivered to the committee’s chair before the hearing by Ty Pine, a lobbyist for FirstEnergy, along with other proponent testimony. Caviness’s name was listed on the testimony as the group’s dean of ministries.
The Cleveland Clergy Council was also listed as a member of Ohioans for Clean Energy, a front group that supported bailouts for FirstEnergy’s nuclear plants.
Caviness was also the president of the Greater Cleveland Chapter of the Southern Christian Leadership Conference in 2017, when he invited FirstEnergy’s CEO to speak at the group’s annual Martin Luther King, Jr. Gala held at Caviness’s church.
At the event, Jones recalled the rocky start to his relationship with the audience.
“It started out, I’m in this job for four months,” Jones said. “I have an annual meeting of shareholders down in Akron, where you have to stand up and do this and talk to all the owners of your company, and as I was walking into the building, there were a couple busloads of maybe some of you, getting out on the sidewalk, with signs.”
Jones chalked up the mending of that rocky relationship to the kind of meetings Caviness had mentioned in his 2016 letter to Governor Kasich. Jones also said that when he was invited to speak at the event, Caviness told him that “you don’t have to bring money.”
“That was the humbling part for me, because I get invited to a lot of things that I’m getting invited only because I am the CEO of FirstEnergy, and only because FirstEnergy has a foundation that supports a lot of different things, and only because FirstEnergy can write checks, and if they can get to me they usually can get a check,” Jones said.
“In the House of the Lord here, I am going to need a little forgiveness here because I didn’t listen to you,” Jones continued, before presenting Caviness with a $25,000 check for the SCLC’s scholarship fund.
Cleveland NAACP reverses support for FirstEnergy
In 2015, the Cleveland branch of the NAACP announced its support for FirstEnergy’s Electric Security Plan. Rev. Caviness was quoted in the press release, which was posted on PR Newswire by FirstEnergy.
Two years later, the Cleveland branch of the NAACP supported Rick Perry’s proposal to bail out coal and nuclear power plants in comments to FERC.
“First Energy contributes $25,000 each year to our organization, and also supports other organizations like the United Way, Salvation Army, Habitat for Humanity and Red Cross,” Danielle Syndor, then chair of the Cleveland NAACP Branch’s economic development committee, wrote in the group’s comments to FERC.
“The continued operation of baseload coal and nuclear power plants translates into safer and more prosperous communities,” the Cleveland NAACP Branch comments also said, the exact same line found in comments filed by the United Way chapters, as mentioned earlier.
Kent Whitley, the environmental justice chair for the Cleveland NAACP, later reversed course on the comments supporting Perry’s proposal in an interview with the Energy News Network. He said the comments would not reflect the branch’s position “moving forward.”
“Smoke goes somewhere,” Whitley said. “You’ve got problems with asthma. You’ve got problems with heart disease. You have a whole bunch of issues that come from a coal plant.”
In 2019, the national NAACP released a report, “Fossil Fueled Foolery,” that exposed how fossil fuel and utility “companies target the NAACP for manipulation and co-optation.”
“… if you do take fossil fuel company money, don’t allow it to sway you for standing up for justice for your community and don’t allow them to use your name or reputation as a cover or legitimization for their deeds,” the report recommended.
The list goes on…
Other non-profit organizations have also received funding from FirstEnergy and backed proposals to bail out the utility’s coal and nuclear power plants.
In 2019, Laura Jones, the executive director of Leadership Ashtabula, provided testimony in support of the bill that bailed out the Davis-Besse and Perry nuclear power plants in Ohio, which are now operated by the bankrupt FirstEnergy Solutions.
Leadership Ashtabula also submitted comments to FERC supporting Perry’s 2017 bailout proposal. The group received $4,000 from the FirstEnergy Foundation in 2017.
Beth Hannam, executive director of the Sandusky County Economic Development Corporation (SCEDC), testified in support of the 2019 bailout bill. The SCEDC received $3,000 from FirstEnergy Foundation in 2017.
A metadata analysis found the name of an outside lobbyist for FirstEnergy Solutions at the Dewey Square Group listed as the “author” of Hannam’s testimony.
Hans Rosebrook, for FirstEnergy Corp., serves on the SCEDC’s board of directors and capital campaign and strategic plan committee.
Applicants for grants from the FirstEnergy Foundations are encouraged to contact the local external affairs manager for FirstEnergy for their community. The company’s external affairs managers serve in leadership roles in some of the nonprofits the foundation funds.
Footnotes
(1) Estimate based on the total giving reported by the FirstEnergy Foundation on its annual Form 990 reports to the IRS for 2013-2019
(2) Based on total “Donations” reported on FERC Form 1 or Form 60 reports filed by the following FirstEnergy subsidiaries, which are listed with their total donations for 2013-2017: American Transmission Systems, Incorporated ($316,451); Cleveland Electric Illuminating Company ($659,866); Jersey Central Power & Light Company ($792,616); Monongahela Power Company ($4,990,214); Metropolitan Edison Company ($855,398); Ohio Edison Company ($246,538); Pennsylvania Electric Company ($795,320); Pennsylvania Power Company ($234,015); Potamac Edison Company ($1,834,445); Toledo Edison Company ($110,026); Trans-Allegheny Interstate Line Company ($37,556); West Penn Power Company ($771,948); FirstEnergy Service Company ($1,623,763)
Read the rest of the report and other utility case studies here.