Larry Householder is the Republican Speaker of the Ohio State House of Representatives, who was arrested, along with four other local politicos, Tuesday in connection with a $60 million corruption scheme.
Householder was arrested Tuesday morning at his home, Jennifer Thornton, of the U.S. Attorney’s Office for the Southern District of Ohio, told NPR.
Householder headed up a corrupt scheme that illegally brought in millions of dollars in order to put him in the Speaker seat, then pass a bailout bill benefiting a specific company, and later protect that bill against a ballot initiative, U.S. Attorney David DeVillers alleged at a news conference Tuesday.
Also hauled in were consultant Jeff Longstreth, former Republican chairman Matt Borges and lobbyists Neil Clark and Juan Cespedes, according to the criminal complaint and affidavit obtained by Heavy.
Here’s what you need to know:
1. According to the Complaint, Householder & Others Took $60 Million in Bribes From a Nuclear Energy Company in Exchange For Pushing Through a Bailout of 2 Plants
In an 82-page complaint and affidavit, an FBI special agent lays out an alleged scheme through which Householder and the other defendants took in more than $60 million in bribes from an unnamed energy company in exchange for pushing through a state bailout for two nuclear plants slated for closure after the company declared bankruptcy.
Beginning in 2017 with a flight on the energy company’s private jet, Householder began receiving quarterly payments of $250,000 from the company through a 501(c)(4) non-profit entity Householder created called Generation Now, according to the complaint.
DeVillers said that 501(c)(4)s are required by federal law to exclusively promote social welfare. Generation Now, however, was solely used to bolster Householder’s bid for the Speaker’s seat, which he won in January 2019. In 2018 and 2019, Generation Now spent millions more of Company A’s money to elect representatives who would vote for Householder and for the bailout that the energy company wanted.
Disgram at U.S. District Attorney’s office. Press conference to start in about a half hour. Ohio House Speaker and other political operatives arrested. pic.twitter.com/n3CHLucH82
— Jo Ingles (@joingles) July 21, 2020
“Make no mistake: This is Larry Householder’s 501(c)(4),” DeVillers said, calling the alleged scheme the “largest bribery, money-laundering scheme ever perpetrated against the people of the State of Ohio.”
In addition to solidifying a “power base” for Householder in the State House, much of the nearly $61 million went to “line the defendants’ pockets,” DeVillers said. He alleged that at least $300,000 was used for legal fees and to settle a lawsuit against Householder, while around $100,000 went to pay for Householder’s home in Florida.
“This is bribery, pure and simple,” DeVillers said. “This was a quid pro quo; this was pay-to-play — that’s the actual term they’ve used, as alleged in the affidavit.”
FBI Special Agent in charge Chris Hoffman said the case was the first time racketeering charges — reserved for “the most egregious cases” — had been filed against a public official in Ohio’s Southern District.
“We expect our citizens here to be appalled and to be shocked,” he said. “It’s a shameful betrayal of public trust.”
2. ‘Company A’ Appears to be FirstEnergy Corp., Which Owns the 2 Nuclear Plants That Were Rescued With a Taxpayer Bailout in 2019
Cleveland.com noted that the complaint and affidavit quote former FirstEnergy Corp. President and CEO Charles Jones, without identifying him.
“We are advocating for Ohio’s support for its two nuclear plants, even though the likely outcome is that [Company A] won’t be the long-term owner of these assets,” the unnamed Company A president was quoted as saying in the affidavit.
Jones can be read in a journal of the American Public Power Association saying that exact quote during an earnings call.
“Everyone in this room knows who Company A is,” U.S. Attorney David DeVillers told reporters at a news conference Tuesday, noting that prosecutors will continue to use the pseudonym, as no one at the company has yet been charged.
FirstEnergy Corp. did not respond to Heavy’s request to comment, but posted a brief statement late Tuesday afternoon, confirming that the company had received subpoenas.
“This afternoon, FirstEnergy Corp. received subpoenas in connection with the investigation surrounding Ohio House Bill 6. We are reviewing the details of the investigation and we intend to fully cooperate,” it read.
FirstEnergy Corp. stock shares were down 15.2 percent as of 3:30 p.m. on Tuesday, the Motley Fool reported.
3. Householder Was First Elected to the State House in 1996 & Prosecutors Say His Path to the Speaker’s Seat Was ‘Unusual’
Householder was first elected to the State House in 1996, where he served until 2004, according to his official Ohio State House biography.
He also served as speaker from 2001 to 2004, but resigned after reports of corruption came out, although charges were never filed, prosecutors said in the complaint. He won his House seat back in 2016, then was re-elected Speaker in 2019 under circumstances prosecutors called “unusual.”
The complaint alleges that Householder aggressively campaigned for the seat by using money provided by “Company A” through his Generation Now 501(c)(4) to support handpicked House candidates who would be sure to support his election as Speaker. It was eventually successful, according to the complaint.
4. The Bailout Bill That Passed & Rescued the FirstEnergy Plants Was Slammed At the Time
— NEO Sierra Club (@NEOSierraClub) July 21, 2020
FirstEnergy Corp.’s bailout was worth $1.1 billion dollars and faced substantial taxpayer opposition for years, after the company filed for bankruptcy and sought public help to keep operating, the Intercept reported.
The company spent millions in both Ohio and Pennsylvania lobbying for bailouts and targeting specific legislators for replacement with more sympathetic voices, the Energy and Policy Institute reported in 2018.
Former chair of the Nuclear Regulatory Commission told the Intercept that the bailout package was “appalling.”
“Wind and solar creates a brand new economy, which is going to be a future-looking economy, rather than a dying economy,” he told the outlet. “Nuclear is dying. It’s dying in Ohio.”
According to the Environmental Defense Fund, at a 2019 House hearing on the bailout, opponents of it outnumbered supporters, 73-2.
“H.B. 6 is corporate welfare, it is cronyism on full display; in other words, a bailout,” Micah Derry, state director of Americans for Prosperity, Ohio, said at the hearing, summarizing the concerns of dozens of other speakers, according to EDF.
5. Householder & the Other 4 Defendants Could Face 20 Years in Prison, If Convicted
Householder and his four alleged conspirators all made preliminary courtroom appearances on Tuesday afternoon, according to Thornton.
According to Thornton and the DOJ, Borges, 48, is a lobbyist who has served as chair of the Ohio Republican Party. Longstreth, 44, was described as Householder’s “longtime campaign and political strategist.” Clark, 67, is a lobbyist who owns and operates Grant Street Consultants and once served as the Ohio GOP’s budget director. Cespedes, 40, was described as a “multi-client” lobbyist.
Each of them could face up to 20 years in prison on the racketeering charges, Thornton said.
Attorney information for Householder was unavailable late Tuesday afternoon.