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Ex-Ohio Speaker Among the Indicted in FirstEnergy Bribe Case (1)

July 30, 2020, 3:13 PM; Updated: July 30, 2020, 6:48 PM

Former Ohio House Speaker Larry Householder (R) and four others were indicted Thursday for their alleged role in a $60 million racketeering scheme that pushed through a $900 million nuclear subsidy for two nuclear plants owned by a former FirstEnergy Corp. subsidiary.

The Ohio grand jury decision was filed roughly an hour before the Ohio House voted 90-to-0 to strip Householder’s speakership in a speedy, somber vote with no floor debate, ending his turbulent second stint as the chamber’s leader.

Householder allegedly orchestrated a scheme in which he and cohorts took more than $60 million in corporate cash funneled into a dark money group called Generation Now.

They allegedly used the money to elect people that would support Householder’s speakership and grease the wheels for passage of House Bill 6, which provides a subsidy for the former subsidiary Energy Harbor’s nuclear plants while cutting the state’s green energy programs.

When opponents of the subsidies launched a repeal effort, the cash allegedly went to undermine that petition, including hiring people to intimidate signature gatherers, or buying off signature gatherers altogether.

Arraignment Set

Householder also was Ohio House speaker from 2001 to 2004 but left office amid media reports of corruption allegations that were referred to the FBI and didn’t produce charges, an earlier complaint said. He was elected to the House in 2016 and became speaker last year.

Other well-known Columbus political figures also were indicted, including former Ohio GOP Chairman Matthew Borges, Householder’s longtime political staffer Jeffrey Longstreth, and lobbyists Neil Clark and Juan Cespedes.

The five face up to 20 years in prison if convicted. The U.S. District Court for the Southern District of Ohio will hold an arraignment of the defendants Aug. 6.

Cespedes “will enter a not guilty plea next Wednesday and the indictment was expected as per normal procedure and it follows the general outline of the complaint,” Mark Collins, Cespedes’ attorney said in an email. Attorneys for the other defendants didn’t immediately respond to a request for comment.

FirstEnergy, meanwhile, “intends to cooperate fully with the investigation to ensure our role in supporting House Bill 6 is understood as accurately as possible,” company spokeswoman Jennifer Young said in an email.

“We strive to apply the highest ethical standards in all business dealings, including our participation in the political process,” Young said.

Potential Political ‘Taint’

The scandal will make the November election even more difficult for Republicans that already chaffing under President Donald Trump’s struggles with voters, Paul Beck, a political science professor emeritus at Ohio State University, said in an interview Thursday.

“Republicans in Ohio and nationwide we facing headwinds that were pretty powerful because of Trump,” he said. “This, for Ohio, is a stunning development with very serious implications for Republicans because they own the scandal.”

Over several decades, Ohio has becoming increasingly Republican at the polls. The GOP swept ever every statewide office in 2018. Redistricting following the 2010 Census, combined with many Republican-leaning suburban and rural districts, have given the GOP a tight grip on the Ohio General Assembly.

However, the scandal could open the party losses in close congressional races—such as 12th District held by Troy Balderson (R) or the 1st District held by Steve Chabot.

The Ohio GOP issued a fundraising request Thursday, saying that “the odds are stacked against Republican candidates” because Democrats are raising million of dollars more.

“There are going to be a lot of big donors that will say, ‘This is a toxic situation. I don’t want to get identified as a contributor to these Republican candidates.’ So the spigot could dry up,” Beck said.

(Updated throughout.)

To contact the reporter on this story: Alex Ebert in Columbus, Ohio at aebert@bloomberglaw.com

To contact the editors responsible for this story: Gregory Henderson at ghenderson@bloombergindustry.com; Chuck McCutcheon at cmccutcheon@bloombergenvironment.com

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