AEP to pay $19M for confirmed role in HB6 scandal
Ohio Environmental Council
Press Release
The Securities and Exchange Commission announced that American Electric Power (AEP) will pay $19M to settle the investigation into the utility’s role in the House Bill 6 scandal, according to a release from the Ohio Environmental Council.
The SEC determined AEP made the following violations of the Exchange Act: issued a misleading press release around their role in fully funding Empowering Ohio, failed to disclose transactions tied to payments to the dark money group and failed to keep accurate books and records around the issue.
This is the first official confirmation that AEP was involved in the HB 6 scandal, and their failure to publicly disclose their material transactions with the dark money group, Empowering Ohio’s Economy, is a betrayal of the public trust.
AEP holds partial ownership in the Ohio Valley Electric Corporation, which operates two outdated and polluting coal plants that continue to burden Ohio ratepayers with costly bailouts. The OEC has continually and repeatedly called for the full repeal of HB 6, specifically the OVEC Bailout. Ohio energy policy will never serve Ohioans until the full repeal of HB 6.
The following quote can be attributed, in whole or in part, to Nolan Rutschilling, Managing Director of Energy Policy:
“AEP betrayed the trust of Ohioans and ratepayers by lying about its role in the House Bill 6 scandal. House Bill 6 is no longer just a FirstEnergy problem, utility corruption and regulatory capture are industry-wide issues. Utilities have spent the last year making the case for utility-owned energy generation instead of letting the market work. If we can’t trust major energy utilities to keep accurate books or tell the truth about payments they make, how can we trust them to responsibly provide energy to Ohioans?
“We urge Ohio legislators to repeal the ongoing bailout of the OVEC coal plants and to work with Ohioans on policy that supports affordable, clean energy, not giveaways to greedy utility CEOs.”
The Ohio Environmental Council (OEC) is the state’s most comprehensive and effective environmental advocate for a healthier, more sustainable Ohio. The OEC develops and ensures the implementation of forward-thinking, science-based, pragmatic solutions to secure healthy air, land and water for all who call Ohio home.
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Securities and Exchange Commission
https://www.sec.gov
The following administrative proceeding summary was published by the SEC:
"The Securities and Exchange Commission today charged American Electric Power Company, Inc. (“AEP”) with fraud in connection with statements it made in a press release regarding AEP’s relationship with a related party and payments made to entities associated with politicians. AEP agreed to settle the charges and pay a civil penalty of $19 million.
"According to the SEC’s order against AEP, in a July 2020 press release, AEP made misleading statements regarding its connection to Empowering Ohio’s Economy, Inc. (“Empowering Ohio”), an Ohio-based 501(c)(4) non-profit organization. Specifically, the Commission found that AEP’s statements in the press release created the impression that AEP had not made payments to certain 501(c)(4) organizations associated with politicians and that AEP contributed to Empowering Ohio to further Empowering Ohio’s mission.
"In reality, according to the order, AEP was Empowering Ohio’s sole source of funding and AEP employees directed Empowering Ohio’s contributions totaling $1.2 million to 501(c)(4) organizations associated with politicians.
"Additionally, the Commission found that AEP failed to disclose material related party transactions with respect to payments AEP made to Empowering Ohio. The order also finds that AEP violated the books and records and internal accounting controls provisions of the federal securities laws.
"AEP consented, without admitting or denying the findings, to a cease-and-desist order finding that it violated Section 17(a)(2) of the Securities Act. The order also finds that AEP violated Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20 and 13a-1 thereunder.
"The SEC’s investigation was conducted by Natalie Garner and Justin Delfino of the Public Finance Abuse Unit, Keith Constance of the SEC’s Chicago Regional Office, and Peter Rosario of the Home Office. The investigation was supervised by Brian Fagel and Kevin Guerrero."
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