Two Ohio political consultants intend to plead guilty to arranging tens of millions of dollars of illegal payments to help pass a ratepayer-funded bailout of two nuclear power plants.
Juan Cespedes, a lobbyist and political consultant, and Jeff Longstreth, a longtime political strategist for former Ohio House Speaker Larry Householder [R], will plead guilty to racketeering conspiracy and taking bribes from nuclear energy provider FirstEnergy and its affiliates. A plea agreement with federal prosecutors was made public this week.
Both men were indicted in July along with Householder, lobbyist Neil Clark, and lobbyist and former Ohio Republican Party Chairman Matthew Borges for accepting bribes totaling $60.9 million that were given to a 501(c)(4) entity that Longstreth created, called Generation Now.
In exchange, Longstreth and Cespedes admitted to helping to pass House Bill 6, a bailout that saved FirstEnergy Corp.'s two then-failing Ohio-based nuclear power plants, Davis-Besse and Perry. Generation Now was also charged with racketeering as part of the conspiracy. HB 6 included ratepayer subsidies to FirstEnergy to keep it from closing the two facilities
Longstreth, in his plea agreement, also admitted that he set up Generation Now knowing that it would be used to receive the bribe money and he admitted to managing the entity's bank accounts and engaging in transactions designed to hide that its source of funding was FirstEnergy.
Cespedes also admitted, in his plea agreement, that he orchestrated the payments to Generation Now and knew they were meant to help Householder become Ohio Speaker of the House and to preserve the FirstEnergy bailout in return.
Longstreth had been Householder's political strategist for his entire political career. Cespedes co-founded lobbying firm The Oxley Group and was appointed to the Ohio Civil Rights Commission and the Ohio Arts Commission by Gov. John Kasich [R] during his administration.
Cespedes and Longstreth each face up to 20 years in prison according to federal sentencing guidelines, although they will likely get a shorter sentence recommendation in exchange for their cooperation with the government. Householder was removed as Ohio House Speaker in July but still represents his district and has pleaded not guilty to the charges. Clark and Borges have also pleaded not guilty.
“If you have information related to the public corruption alleged in this case, please contact the FBI at 513-421-4310,” said U.S. Attorney for the Southern District of Ohio David M. DeVillers. “This investigation remains ongoing."
FirstEnergy has fired its CEO, Charles Jones, and two other executives after investigating Generation Now and the company's political giving. Steven Strah, formerly president of FirstEnergy, has been appointed acting CEO.
The company'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. While Ohio Governor Mike DeWine [R] says he supports a repeal of House Bill 6, the state legislature has not yet created a bill to repeal it. However, both plants are now operated by another company.
FirstEnergy Corp. was the original operator of the nuclear plants until its subsidiary, FirstEnergy Solutions, filed for bankruptcy in April 2018. Thanks to the bailout, FirstEnergy Solutions survived the bankruptcy, emerged and renamed itself Energy Harbor. The firm, which now operates independently from FirstEnergy Corp., is not expected to be affected by any punishment of Generation Now or FirstEnergy Corp.
"It just demonstrates a new low in terms of how a utility will exercise its power, and dollars, and influence," says Jeff Deyette, director of state policy and analysis in the Climate and Energy program at the Union of Concerned Scientists, about Generation Now and the conspiracy. "But it's not new in that we've seen many, many times how utilities, and particularly the fossil fuel industry writ large, how they've used their deep pockets over and over again with a willingness to funnel money in deceptive and deceitful ways."