Ohio Speaker of the House Larry Householder [R] and four political allies, including the former chairman of the state Republican Party, were arrested and charged with accepting bribes from a company identified as nuclear energy provider FirstEnergy Corp.
The company and its affiliates paid more than $60 million to a 501(c)(4) entity called Generation Now that Householder, his aide Jeffrey Longstreth, lobbyist Neil Clark, lobbyist and former Ohio Republican Party Chairman Matthew Borges and political consultant Juan Cespedes are alleged to have controlled. Generation Now was also charged as part of the prosecution.
The group used regular payments from late 2016 to the present of up to $250,000, detailed in the criminal complaint with payment schedules coming in to Generation Now, for everything from running local house campaigns that resulted in Householder winning the speakership in 2019 to repairs to his Perry County farm.
The criminal information released July 21 alleges that Householder and his allies then passed HB 6 in 2019, a bill supported by Ohio's Republican-controlled House and Senate and signed into law by Gov. Mike DeWine [R] last July. The legislation included ratepayer subsidies to FirstEnergy to keep it from closing its Davis-Besse and Perry nuclear power plants.
The firm's bailout totaled a customer-paid $1.1 billion subsidy for the two nuclear power plants, to be paid in increments of $150 million a year starting in 2021 through 2027.
The law also provided $50 million a year in new customer-paid subsidies to the Ohio Valley Electric Corp., which operates two large coal-burning power plants.
FirstEnergy Corp. was the original operator of both nuclear plants until its subsidiary, FirstEnergy Solutions, filed for bankruptcy. Thanks to the bailout, FirstEnergy Solutions survived the bankruptcy and renamed itself Energy Harbor, which now operates independently from FirstEnergy Corp.
Shocked and Appalled
“All forms of public corruption are unacceptable,” said FBI Cincinnati Special Agent in Charge Chris Hoffman at the July 21 news conference announcing the arrests. “When the corruption is alleged to reach some of the highest levels of our state government, the citizens of Ohio should be shocked and appalled.”
Householder's farm was also searched by the FBI the morning of July 21. The criminal complaint stated that in a recorded conversation in mid-2019, Clark, a lobbyist who worked for Householder, said of Generation Now "nobody knows the money goes to the Speaker's account, it is controlled by his people, and it's not recorded. A (c)(4) is non-recorded."
The group faces up to 20 years in prison for the bribery conspiracy. FirstEnergy has not yet been indicted in the scheme, but is easily recognizable due to references in the criminal complaint to its plants and the politics of HB 6. The criminal complaint put the total amount of money that FirstEnergy entities paid to Generation Now at nearly $60.9 million.
"Make no mistake, this is Larry Householder's 501 (c)(4)," U.S. Attorney for the Southern District of Ohio David DeVillers told reporters at the news conference.
HB 6 was opposed by the Union of Concerned Scientists, the Sierra Club and other environmental groups for gutting Ohio’s energy efficiency and renewable energy incentives and replacing them with the ratepayer subsidies. An effort to repeal it via a referendum failed to get enough signatures to get it onto the ballot this year.
Governor DeWine called for Householder to step down from his speakership in a statement made the evening of July 21.
“I am deeply concerned about the allegations of wrongdoing in the criminal complaint issued today by the U.S. Attorney’s Office," his statement said. "Every American has the presumption of innocence until proven guilty. Because of the nature of these charges, it will be impossible for Speaker Householder to effectively lead the Ohio House of Representatives; therefore, I am calling on Speaker Householder to resign immediately. This is a sad day for Ohio."
Borges was chairman of the Ohio Republican Party before he was ousted by allies of President Donald Trump following the 2016 presidential election. He was recently censured by the state party in June for creating a SuperPAC that supported Democratic presidential candidate Joe Biden. Borges pleaded guilty to a misdemeanor of unauthorized use of a public office in a separate incident in 1999.
FirstEnergy Solutions has not been charged with a crime. According to news reports, the company states that it plans to fully cooperate with the investigation. Calls to Speaker Householder's office were not returned July 21.