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Tag: Larry Householder

  • Money paid, favors done. Messages detail relationship between Ohio regulator and energy executives

    Money paid, favors done. Messages detail relationship between Ohio regulator and energy executives

    FBI agents remove boxes of materials from PUCO Chairman Sam Randazzo’s condo in Columbus Nov. 17, 2020. Photo courtesy of Daniel Konik/Statehouse News Bureau.
    BY:  – Ohio Capital Journal

    In early 2019, news of financial ties between Akron-based FirstEnergy and the man incoming-Gov. Mike DeWine had named to lead the Public Utilities Commission of Ohio began to spread. And as it did, FirstEnergy’s top executives feared they wouldn’t have a regulator they could control, according to documents filed in federal court late last week.

    “Great. Now we have none on the list” of nominees, then-CEO Chuck Jones texted Vice President Michael Dowling. Jones later added, ruefully, “Always need a backup plan.”

    As it happened, the nominee, Sam Randazzo, ended up being appointed to the commission after being paid $4.3 million by FirstEnergy. He proceeded to help draft a law providing the utility with a $1.3 billion bailout. The company spent another $60 million to pass and then to protect it from a citizen-initiated repeal in what law-enforcement officials have called one of the biggest bribery and money-laundering scandals in state history.

    Randazzo, Jones and Dowling haven’t been charged in the scandal, but after a jury trial that convicted two others, two guilty pleas, and a suicide, the three men could be the next targets as federal authorities continue their probe.

    If authentic, the communications filed on Friday indicate that the three met in Randazzo’s Columbus condo in December 2018. And they appear to show that the FirstEnergy executives agreed to pay Randazzo a large sum in exchange for favors when Randazzo became the state’s chief regulator.

    Another communication 23 months later — just after the FBI searched the condo in November 2020 — shows Randazzo providing a friend “the number for my home which the FBI does not have.”

    Demanding records

    Lawyers for Randazzo, Jones and Dowling didn’t immediately respond to requests for comment Monday, but attorneys for the former executives have said in separate court filings that they believe the feds are investigating their clients.

    The documents filed in federal court on Friday are part of a huge class-action suit against FirstEnergy, Jones, Dowling and a number of other defendants.

    In a deferred prosecution agreement, FirstEnergy in 2021 agreed to pay $230 million and admitted wrongdoing, including by bribing Randazzo. But the class-action plaintiffs — large pension and investment funds — are arguing that the company violated securities law by not disclosing its corrupt conduct. And, they argue, the company lost much of its value when that conduct came to light, leaving investors holding the bag.

    Randazzo has denied wrongdoing and he isn’t a defendant in the case, but the class-action plaintiffs want him to produce all communications relating to how he spent the $4.3 million he got from FirstEnergy just as he was poised to become its most powerful regulator.

    The plaintiffs have been accusing Randazzo since April of foot-dragging. They obtained the messages they filed Friday from a third party and are pointing to them as examples of Randazzo’s lack of cooperation.

    Early arrangements

    The earliest of the messages was on Dec. 18, 2018, and it appears that the three men had recently met in the residence that the FBI later searched.

    “Got it, Sam,” Dowling, then the FirstEnergy vice president, texted Randazzo. “Good seeing you as well. Thanks for the hospitality. Cool condo.”

    The “got it” was in response to a column of numbers Randazzo sent that appear to indicate that he was expecting payments from FirstEnergy through 2024:

    • 2019 — 1,633,333
    • 2020 — 600,000
    • 2021 — 600,000
    • 2022 — 600,000
    • 2023 — 600,000
    • 2024 — 300,000

    A seventh entry said “Total 4,333,333” — an amount equal to what FirstEnergy said was a bribe.

    The following day, Jones, the CEO, told Randazzo that he wouldn’t have to wait that long for the money, according to the filings. Jones also made it clear that he expected access to Randazzo.

    “We’re going to get this handled this year, paid in full, no discount,” the message says. “Don’t forget about us or Hurricane Chuck may show up on your doorstep! Of course, no guarantee he won’t show up sometime anyway.”

    Randazzo’s response seemed to be meant to reassure — and he linked the money to favors.

    “Made me laugh — you guys are welcome anytime and anywhere I can open the door,” he said. “Let me know how you want me to structure the invoices. Thanks.”

    Connections

    But on Jan. 30, 2019, problems popped up with Randazzo’s nomination.

    FirstEnergy’s nuclear-owning subsidiary, FirstEnergy Solutions, was going through bankruptcy and it had listed the Sustainability Funding Alliance of Ohio on one of its disclosures. Randazzo controlled the group and FirstEnergy had paid him millions through it in the past. Now the press was on to the matter.

    “Chuck — Sam Randazzo is going to pull out of the PUCO process ASAP and it’s related to a disclosure on a (FirstEnergy Solutions) bankruptcy filing,” Dowling texted Jones, according to the documents filed Friday. “Reporters called (FirstEnergy) today inquiring about the relationship between (FirstEnergy Solutions) and a group called the Sustainability Funding Alliance of Ohio. You can guess the rest.”

    That’s when Jones lamented not having a “backup plan” in the event that Randazzo was not seated on the utility commission. Dowling agreed.

    “This is awful,” he wrote. “The FirstEnergy Solutions bankruptcy filing names that group and Sam names the same group on a financial disclosure statement. Unreal. I don’t know why it was listed in the (FirstEnergy Solutions) bankruptcy filing. The payments we made year-end ’18 came from (FirstEnergy) Corp. Services.”

    Dowling was ready to throw Randazzo under the bus if the connection proved to be an embarrassment to the incoming DeWine administration.

    “They’re going to be mad at Sam (and hopefully not us) for not disclosing the financial relationship,” Dowling wrote. “That’s Sam’s responsibility.”

    A day later, however, the financial connection between FirstEnergy and Randazzo apparently wasn’t sufficiently embarrassing and he was picked to head up the PUCO.

    “A bullet grazed the temple,” Dowling told Jones, according to one of the texts filed last week.

    “Forced DeWine/Husted to perform battlefield triage,” Jones responded, referring to Lt. Gov. Jon Husted. “It’s a rough game.”

    A still rougher game

    In a trial held in Cincinnati from late January to mid-March, prosecutors put on witnesses and displayed communications describing Randazzo’s 2019 role in drafting House Bill 6, the bailout bill. Not only did it provide $1 billion to prop up two failing nuclear plants FirstEnergy was spinning off, it charged ratepayers about $100 million a year to insulate the company from an economic downturn. For FirstEnergy, it was easy money, in other words.

    In June, U.S. District Judge Timothy Black sentenced former Ohio House Speaker Larry Householder, R-Glenford, to 20 years in prison for orchestrating the racketeering scandal. Former state GOP Chairman Matt Borges got five years for his role.

    By November of 2019, HB 6 was on the books after FirstEnergy and a subsidiary plowed $36 million into a brutal, dishonest effort to turn back a citizen-initiated repeal. But the FirstEnergy executives weren’t done with Randazzo.

    On Nov. 10, 2019, Jones texted a coal executive that another cloud loomed for FirstEnergy.

    “And the (FirstEnergy) rescue project is not over,” Jones said, according to documents filed as part of the class-action suit. “At (Edison Electric Institute) financial conference. Stock is gonna get hit with Ohio 2024. Need Sam to get rid of the ‘Ohio 2024’ hole.”

    That was an apparent reference to a requirement that FirstEnergy file a “rate case” with the PUCO in 2024. In such a proceeding, regulators assess a utility’s operations and make a judgment about whether its rates and revenues are reasonable.

    FirstEnergy was apparently afraid they wouldn’t be. On Nov. 21, 2019, just 11 days after Jones expressed his concerns, the PUCO under Randazzo’s leadership issued an order saying it was “no longer necessary or appropriate” to require FirstEnergy to file a rate case.

    The next day, Jones wanted to express his appreciation to Randazzo. He did so by sending the erstwhile regulator a list of prices for six energy stocks that day. FirstEnergy stocks were up 1.5%. The next highest was Avangrid, which was up 0.86%.

    “Thank you!!” Jones wrote.

    Randazzo replied, “Ha — as you know, what comes up may come down… Thanks for the note. Spoke to Mike (Dowling) last night.”

    Then Jones said, “My Mom taught me to say Thank you.”

    Flying high

    By the start of 2020, things seemed to be going well for those who orchestrated the bailout.

    FirstEnergy Solutions would emerge from bankruptcy in February as a separate company, Energy Harbor. The class-action plaintiffs argue that one of FirstEnergy’s major goals in the scheme was to prop up the nuclear plants, get them off their books and shed the liability of having to pay for a decades-long process to close and clean up after them.

    At the same time, FirstEnergy was funneling millions more dark-money dollars into an effort to get the state’s legislature to put a constitutional amendment on the ballot. It would change the state’s term-limits so Householder could stay speaker for another 16 years — and presumably continue to do the utilities’ bidding.

    But then in July 2020, it all crashed down.

    On July 21, the FBI arrested Householder, Borges and other conspirators. By the next day, FirstEnergy stock had lost 34% of its value, the class-action plaintiffs contend.

    FirstEnergy fired Jones and Dowling the following October. And then in November, 2020, Randazzo was forced to resign from the PUCO after the FBI searched his condo.

    “Pretty stressful few days which started Monday at 6:00 when 10-12 FBI agents with their guns drawn announced their arrival at our home,” Randazzo emailed a friend on Nov. 21, according to the documents filed by the class-action plaintiffs. “But, Carol and I are handling it and doing better each day. Neighbors, friends (like you) family, PUCO staff and people I have worked for over the years have been great. Roger Sugarman (his attorney) is my new hero. So onward!”

    Then Randazzo encouraged the friend to call him on the number he believed that the FBI didn’t have.

    _________________________

    Marty Schladen
    MARTY SCHLADEN

    Marty Schladen has been a reporter for decades, working in Indiana, Texas and other places before returning to his native Ohio to work at The Columbus Dispatch in 2017. He’s won state and national journalism awards for investigations into utility regulation, public corruption, the environment, prescription drug spending and other matters.

    MORE FROM AUTHOR

  • Federal judge blasts disgraced Ohio House speaker as a “bully,” sends him straight to jail

    Federal judge blasts disgraced Ohio House speaker as a “bully,” sends him straight to jail

    Former House Speaker Larry Householder, R-Glenford. Source: Ohio General Assembly.

    BY:  – Ohio Capital Journal

    CINCINNATI — Former Ohio House Speaker Larry Householder spent possibly his last moments as a free man around 2:30 p.m. Thursday and they couldn’t have been pleasant.

    U.S. District Judge Timothy Black gave the Glenford Republican the maximum possible sentence of 20 years and then ordered blue-shirted U.S. Marshals to immediately take him into custody. He rose, put his hands behind his back, the marshals cuffed him and led the once-powerful pol away.

    But before that humiliation, the judge blistered Householder for being the ringleader of a racketeering scandal in which Akron-based FirstEnergy paid him more than $59 million in bribes in exchange for a $1.3 billion bailout, most of which was intended to save two failing nuclear plants in Northern Ohio.

    Ratepayers could have used that money for things like education, health care or to start businesses, the judge said.

    “You handed that money to suits in private jets,” Black said.

    The judge made the speech and imposed the sentence after saying Householder clearly perjured himself during his criminal trial, which lasted from late January until mid-March.

    In it, Householder claimed to barely know FirstEnergy executives as federal prosecutors put on a mountain of evidence that Householder flew on their corporate jets, sat in their luxury boxes and dined in fancy restaurants as they plowed tens of millions of the corporation’s dollars into dark-money accounts.

    “You conned the people of Ohio and you tried to con the jury, too,” Black said in his gravely voice as Householder, clad in a gray suit and red tie, slumped his bulk back in his chair.

    The money from FirstEnergy and one of its subsidiaries was used to elect fellow Republicans in 2018 who would vote to make Householder speaker in early 2019. More than $500,000 of it was used to pay off Householder’s credit card bills, settle a lawsuit and to repair a house he owned in Florida.

    Tens of millions more went to pass the corrupt bailout — House Bill 6 — and to fund a thuggish campaign to thwart a citizen-initiated repeal.

    Earlier in the hearing, Assistant U.S. Attorney Emily Glatfelter said Householder used FirstEnergy’s dark money to crush a “citizen veto” and “because of this House Bill 6 remains in effect today.”

    That’s also because Republican supermajorities in Ohio’s gerrymandered legislature have refused to repeal the corrupt law even after arrests were made, and as they try to make it virtually impossible for citizens to initiate amendments to the Ohio Constitution.

    Also arrested in the scandal were lobbyists Juan Cespedes and Jeffrey Longstreth — who cooperated with prosecutors within days of their arrests — and Neil Clark, who died by suicide. Former Ohio GOP Chairman Matt Borges is slated for sentencing at 11 a.m. today, Friday.

    Steven Bradley, Householder’s attorney, sought leniency for his client. Referring to the possibility of a 20-year sentence, he said “That is effectively a life sentence for Larry Householder given his age and health situation.”

    Householder is 64 and overweight.

    Bradley argued that his client was around 60 when the racketeering conspiracy began in late 2016 and that prior to that, Householder did “innumerable” good deeds “for decades.” A 20-year sentence would “effectively give no consideration” to those good deeds, Bradley said.

    But when he spoke on his own behalf, Householder appeared to do more to harm his case than to help it, just as he did at trial.

    “My greatest commitment is to my creator… My next commitment is to my family,” he read from a prepared statement as he stood at the podium.

    Householder said that in the course of 38 years of marriage, “I can count on one hand” the number of nights he spent away from his wife, Taundra. Householder also described the crushing pain they suffered when they lost a four-year-old daughter.

    But then he pushed his claims past the point of plausibility.

    He said Taundra was planning to retire from her teaching position and next year, when he turns 65, he wanted to retire as well, saying he planned to “hang up my suit and tie.”

    Householder made that statement in the same courtroom where, only three months earlier, prosecutors put on testimony and displayed bank records and written messages from early 2020 that showed FirstEnergy and AEP putting money into dark money groups intended to fund an effort to change the state’s term limits so Householder could stay in office for as long as 16 more years.

    The former House speaker also implied that he wanted a lenient sentence not for himself, but for his family. Taundra, he said, would be alone while “I’ll be in a cold cell hours away.”

    But what might really have set Judge Black off was Householder’s profession of selfless public service.

    “My life has been a total and full dedication to making life better for those I serve,” he said.

    Black described voters who put out Householder yard signs, donated their hard-earned money to his campaigns, and pushed a button for him in the voting booth.

    “I’m not talking about some corporation or the (former FirstEnergy CEO) Chuck Joneses of the world,” Black said. Householder’s constituents who supported him “were saying, ‘I’m choosing to trust you,’ and you betrayed that trust,” the judge said.

    Black used Householder’s own words to give the lie to his claims. He quoted several recordings of Householder that were surreptitiously made during the conspiracy and played at trial.

    “If you’re going to fk with me, I’m going to fk with your kids,” Householder said in one of them.

    “Bottom line, you were a bully,” the judge said.

    If the federal racketeering statute didn’t cap sentences for a single count at 20 years, sentencing guidelines would have recommended life for the former House speaker, Black said. One reason for that is because Householder’s use of a mountain of hidden corporate money to elect a legislature, pass an exponentially bigger bailout for the company, and to crush a citizen repeal is “an assault on democracy,” the judge said.

    Black explained the special harm done by public corruption like that committed by Householder and his co-conspirators. To do so, he quoted former President Theodore Roosevelt, who ironically advocated the citizen-initiated amendment process in Ohio that Householder’s former Republican colleagues in state government are now trying to gut.

    “There can be no crime more serious than bribery,” Roosevelt said in a 1903 message. “Other offenses violate one law while corruption strikes at the foundation of all law.”

    When Borges, the former GOP chair, is sentenced today, it’s unclear what he’ll face. His involvement in the conspiracy was considerably less than Householder’s, but Judge Black showed that he’s not much in the mood for leniency when it comes to Ohio’s corrupt political culture.

    Also uncertain is when — or if — others might be charged.

    Former FirstEnergy CEO Chuck Jones and Vice President Micheal Dowling — as well as former FirstEnergy Solutions President John Kiani — directed the flood of corporate dollars into the Householder-controlled dark money groups, according to prosecutors.

    And FirstEnergy admitted in a deferred prosecution agreement that it paid  a $4.3 million bribe to Sam Randazzo just as Gov. Mike DeWine was appointing him to chair the Public Utilities Commission. Randazzo the helped draft the corrupt bailout law, according to trial testimony.

    On the steps of the Potter Stewart U.S. Courthouse just after the sentencing, U.S. Attorney Kenneth Parker was asked when or whether those men or others might be charged.

    “We continue to look through evidence and we continue to listen to recordings and speak to individuals, so if something’s there we’re going to go there, too, and address it,” he said.

    Marty Schladen
    MARTY SCHLADEN

    Marty Schladen has been a reporter for decades, working in Indiana, Texas and other places before returning to his native Ohio to work at The Columbus Dispatch in 2017. He’s won state and national journalism awards for investigations into utility regulation, public corruption, the environment, prescription drug spending and other matters.

    MORE FROM AUTHOR

  • AEP doesn’t have much to say about its support for corrupt utility bailout

    AEP doesn’t have much to say about its support for corrupt utility bailout

    Larry Householder speaks after guilty verdict. Photo by: WEWS/WCPO.

    BY:  – Ohio Capital Journal

    Columbus-based utility giant AEP wasn’t at the epicenter of a historic bribery and money-laundering scandal in 2019. But it also wasn’t very far away as a corrupt deal was hatched in the Ohio Capitol to use $61 million in bribes to pass a $1.3 billion bailout.

    The name of the nation’s sixth-largest electric utility came up repeatedly in the seven-week criminal trial that ended earlier this month in the racketeering convictions of former Ohio House Speaker Larry Householder and former state GOP Chairman Matt Borges.

    Through its dark-money group, AEP provided more than $900,000 that was used to help pass the bailout. And to date, it has received more than $60 million to subsidize aging coal plants that belong to a consortium in which it owns a 40% stake.

    Just after the utility bailout was passed and a repeal attempt was thwarted, AEP spent another $500,000 through the same dark money group on an effort that stood to keep Householder in the speakership well into the 2030s. During the trial, a federal prosecutor asked a Householder co-defendant who had pleaded guilty why AEP would spend so much to keep the speaker in power.

    “It kind of went without saying that they support anything that’s good for the speaker because anything that’s good for the speaker is good for them,” the aide, Jeffrey Longstreth, testified.

    But everything changed when Householder and four others were arrested in July of 2020. Now AEP doesn’t seem interested in talking about its actions prior to that.

    Mysterious money

    Lobbyists and other wired-in parties on Capitol Square knew that as the battle heated up over the 2019 bailout measure — House Bill 6 — a geyser of cash was financing the effort to pass and protect it from repeal.

    It was logical to suspect that the money was coming from a utility industry that stood to benefit. But there was no way to be sure because it was coming through 501(c)(4) dark money groups that don’t have to disclose their donors.

    But then the FBI got involved.

    Acting on a tip, it launched an investigation. Using subpoenas, wiretaps, confidential informants, forensic accountants and undercover agents, investigators were able to grope their way through the dark money smokescreen and determine who was really behind the push for an unpopular corporate bailout.

    By far and away the biggest donor was the biggest beneficiary — Akron-based FirstEnergy. Starting in 2017 it ponied up what would become about $60 million to elect representatives who would vote to make Householder speaker in 2019 and then to pass and protect HB 6. In return, it stood to get about $1 billion of the benefit of the bailout — a return of more than $16 on each dollar it invested.

    But AEP is getting an even better return — more than $66 for every one of its dollars that made their way into the dark money group that fueled the HB 6 scheme. And, because the part of the bailout that benefits AEP is the only part of HB 6 that hasn’t been repealed, AEP is continuing to collect that money. That means returns from its dark money expenditure will only improve over time.

    AEP hasn’t been accused of wrongdoing in the scandal, and a spokesman denied that it acted improperly.

    “AEP participates in legislative and regulatory processes ethically and in compliance with the laws of the states where we operate,” the spokesman, Scott Blake, said in an email. “As we have previously stated, we do not believe that AEP was involved in any wrongful conduct.”

    And a board member of the dark money group AEP solely funded, Empowering Ohio’s Economy, claimed it didn’t know its dollars were used for nefarious purposes — even though it was at least partly in on the secret of HB 6’s mysterious funding.

    “Obviously, knowing what we know now, we wouldn’t have made the donations,” the board member, J.B. Hadden, told the Dayton Daily News in December 2020.

    The company is, however, being investigated by the U.S. Securities and Exchange Commission about its involvement in the passage of HB 6.

    Belated transparency

    However, AEP didn’t seem all that eager week to discuss its contributions which, until Householder was arrested, were secret. In the wake of the scandal, the company decided to start disclosing what dark money groups it contributes to, but only going forward.

    “We adopted a revised political engagement policy in 2021, which is available at ​https://aep.com/investors/governance/politicalengagement,” Blake said. “Under that policy, beginning with contributions made in 2020, AEP has disclosed its contributions of $5,000 or more to 501(c)(4) social welfare organizations as part of AEP’s annual disclosures. Organizations that receive contributions from AEP are subject to their own disclosure requirements.”

    But since the company started making such disclosures, Empowering Ohio’s Economy hasn’t appeared on them. AEP was the group’s sole contributor and its top lobbyist, Tom Froehle, was on its board.

    The dark money group gave $700,000 to Generation Now, a dark money group controlled by Householder, that has since pleaded guilty to its role in the scandal. It gave another $200,000 to the Coalition for Opportunity and Growth, which ran TV ads supporting House candidates who would back Householder for speaker.

    During the Householder trial, two of Householder’s co-defendants and other witnesses testified how money from Generation Now financed savage attacks on opponents of Householder candidates. And, when the recall campaign got underway, it paid for false, anti-China commercials, private eyes and “blockers” — people who harassed and even assaulted petition circulators, witnesses testified.

    In an early 2019 text message presented to the jury, Borges described efforts to get AEP on board with a bailout that primarily benefited FirstEnergy.

    “Lots of pressure from FE, AEP, renewable standards, setbacks… so thought is to move a comprehensive package and let everyone get a little (bit) of what they want,” Borges said.

    Then in testimony, Householder’s fixer, Longstreth, described what AEP got.

    “They received a benefit of… there were two coal plants in southwest Ohio,” Longstreth testified. “I’m not exactly sure where. One of them is actually just over the line in Indiana. I’m not sure where the other one is. They had to be created because of the U.S. Department of Defense needed them created 50 years ago (it was actually 68.) I don’t really know all of the details on it, but they received some benefit for running those plants on a continuing basis.”

    Longstreth, who pleaded guilty to his involvement in the conspiracy, was referring to the Ohio Valley Electric Corporation, or OVEC, in which AEP holds a 40% interest. According to the Office of Ohio’s Consumers’ Counsel, the corporation so far has received about $152 million in ratepayer subsidies as a consequence of the corruptly passed HB 6.

    But Blake, the AEP spokesman, didn’t respond directly when asked if the HB 6 arrests in July 2020 had anything to do with its decision to report dark-money contributions going forward.

    “The decision to list contributions over $5,000 to 501(c)(4) organizations was made in the second half of 2020, and the reporting began with contributions made that year,” he said. “AEP has not made a contribution to Empowering Ohio’s Economy since 2019.”

    In addition, Blake wouldn’t comment on the misleading way Empowering Ohio’s Economy described itself in 2019 as it made huge, secret contributions of AEP money that ended up being used in a bribery and money-laundering scandal. On its IRS Form 990, the group blandly described its purpose as:

    “Promoting Ohio as well-suited to host and support major conventions or similar events and as an attractive destination for travel, business meetings and vacations. The methods of achieving these purposes include funding and hosting major conventions and meetings via internet, professional organizations, and social media education to the general public.”

    Even though AEP was the dark money group’s sole contributor and its top lobbyist sat on its board, Blake said it wasn’t AEP’s job to answer for the misleading description.

    “501(c)(4) organizations are subject to their own reporting requirements and any questions about what they reported would need to be addressed by them,” he said.

    Subsidizing coal in a warming world

    The Intergovernmental Panel on Climate Change earlier this month warned that greenhouse gas emissions must be cut swiftly and dramatically to spare future generations from the worst consequences of global warming. So subsidizing two coal plants built during the Eisenhower administration might not seem the best use of ratepayer resources.

    It also might seem important to avoid rewarding corporate attempts to secretly buy ratepayer subsidies for their regulated monopolies.

    But legislative attempts to end the HB 6 coal subsidies so far have been unsuccessful and Blake cited last year’s jumps in natural gas prices as a reason for keeping the $130,000-a-day subsidies in place.

    “The recent increase in natural gas prices has shown that (the Ohio Valley Electric Corporation) offers customers price stability,” he said. “As we transition to cleaner resources, power from the OVEC plants offer security from rising natural gas prices and can provide power when renewables like wind and solar are unavailable.

    Blake added, “Having reliable generation resources is critical to providing the reliable power our customers need. Customers receive a credit when OVEC outperforms the energy market. The current mechanism supports only the actual costs of providing secure, reliable energy.”

    Indeed, default rates for customers of AEP, FirstEnergy and other Ohio utilities are all jumping this month to reflect high wholesale rates last year, when gas prices were high — partly as a consequence of disruptions caused by war in Ukraine. But keeping the dirty, coal-fired plants spinning now might make less sense because natural gas prices are down dramatically, and closer to their 10-year average.

    Householder’s friend

    While AEP might have wanted to distance itself from secret spending supporting Householder just after his arrest, it showed no such compunction in the months immediately before the feds broke up the racketeering scheme.

    Householder’s fixer, Longstreth, testified how — fresh off his HB 6 success — the speaker turned his sights to even bigger game. He’d used tens of millions in secret utility dollars to create a political juggernaut that made him speaker and that enabled him to pay off his financial backers. Now he sought to keep his juggernaut dominating Ohio politics — possibly until 2036.

    Longstreth had discovered that the idea of reforming Ohio’s legislative term limits polled well and he and his boss figured they could push one with an important catch. It would limit lifetime service to 16 years, but if it would reset the clock on everybody. That would mean the then-61-year-old Householder could serve until he was 77.

    To fund the scheme, Householder and his aides again turned to businesses that stood to gain the most from having close allies in the government — the utilities whose monopoly subsidiaries’ revenues were controlled by it.

    After he was approached in early 2020, then-First Energy CEO Chuck Jones in a text message described Householder as “an expensive friend.” But FirstEnergy quickly agreed to secretly spend $2 million on Householder’s tenure-enhancement scheme.

    On the witness stand in the Householder trial, Longstreth described a similarly warm reception from AEP’s then-CEO Nick Akins. Longstreth said he attended a meeting in early 2020 at AEP’s Columbus headquarters with Householder, Akins and two lobbyists.

    Longstreth testified that Akins’ reception to the plan that stood to make Householder speaker well into the next decade was “very positive.”

    “It was probably a 30-minute meeting,” Longstreth said, according to a transcript of the trial. “Fifteen minutes of it, you know, exchanging pleasantries and talking about anything that they had going on and then 15 minutes of us explaining it, and they said sounds great, we’ll get back to you and they did get back to us and said they would be supportive.”

    Shortly thereafter, AEP contributed $500,000 to the dark money group Householder set up for the initiative through AEP’s own dark money group, Empowering Ohio’s Economy.

    But then forces struck that were beyond the control of even Householder and Ohio’s largest utility companies. Neither can be counted on to intervene in the future.

    Asked why the term-limits initiative didn’t get off the ground, Longstreth referred to a Feb. 29, 2020 email he sent to FirstEnergy providing instructions on how to wire money into Householder’s new dark money organization.

    “COVID hit like two weeks later, and then we were arrested in July,” Longstreth testified. “So it never happened.”

    _______________________________

    Marty Schladen
    MARTY SCHLADEN

    Marty Schladen has been a reporter for decades, working in Indiana, Texas and other places before returning to his native Ohio to work at The Columbus Dispatch in 2017. He’s won state and national journalism awards for investigations into utility regulation, public corruption, the environment, prescription drug spending and other matters.

    MORE FROM AUTHOR

  • Former Ohio speaker, GOP chair found guilty of racketeering

    Former Ohio speaker, GOP chair found guilty of racketeering

    Former Ohio House Speaker Larry Householder gives the thumbs up as he enters the courthouse where he is expected to testify Wednesday, March 1, 2023. Photo from WEWS.

    BY: MARTY SCHLADEN – MARCH 9, 2023 2:03 PM Ohio Capital Journal

    CINCINNATI — After more than nine hours of deliberation, a jury on Thursday found former Ohio House Speaker Larry Householder and state Republican Chairman Matt Borges guilty of felony racketeering charges in connection with a billion-dollar utility bailout that was passed in 2019.

    Both men face maximum sentences of 20 years in what prosecutors said was likely biggest bribery and money laundering scandal in Ohio history. U.S. District Judge Timothy Black will schedule a sentencing hearing.

    After the verdict, one of Householder’s attorneys, Steven Bradley, confirmed what observers have suspected almost from the start of testimony.

    “Of course we’re going to appeal the verdict,” he told reporters minutes after the jury left the courtroom. Householder stood off to the side in a blue business suit, clutching a camouflage trucker cap.

    He affirmed that he would continue to fight the charges.

     Convicted felon Larry Householder outside the federal courthouse in Cincinnati where a jury found him guilty of racketeering. Photo by Marty Schladen, Ohio Capital Journal.

    “This is just the first step in the process,” Householder said. “Stay tuned.”

    As part of the racketeering scheme, Akron-based FirstEnergy and other utilities paid tens of millions into an effort to elect friendly lawmakers in 2018 who would vote to make Householder speaker the following year. Immediately after taking the speaker’s gavel, Householder worked furiously to pass a $1.3 billion bailout, the vast majority of which benefited FirstEnergy subsidiary FirstEnergy Services.

    The company was being dragged down by losses from its nuclear and coal plants and executives were seeking a bailout. While it got more than $1 billion out of the deal, Householder got political power as well as more than $500,000 personally, jurors found. Borges played a smaller role, but he paid a $15,000 bribe to help defeat an attempt to repeal the bailout and he received more than $100,000 in funds that originated with FirstEnergy, prosecutors said.

    The verdict could have far-reaching implications for the use of “dark money” — funds paid into 501(c)(4) organizations that don’t have to reveal the sources of their funding. In the wake of the 2010 U.S. Supreme Court decision Citizens United v FEC, the use of such funds has become ubiquitous in state and national politics.

    Thursday’s verdict might start to start to draw some boundaries around such expenditures.

    In the case of the Ohio bailout, a financially strapped Householder found common cause with a financially ailing FirstEnergy. After paying billions to prop up a subsidiary with failing and nuclear and coal plants, the parent corporation in 2016 decided to send the subsidiary into bankruptcy. They wanted a ratepayer subsidy for the failing nuclear and coal plants so they could be sold off after the subsidiary emerged from bankruptcy.

    FirstEnergy’s top executives were seeking a bailout at the same time a financially strapped Householder was seeking a return to the Ohio speakership. Their relationship grew in luxurious settings that belied the financial problems besetting both.

    Householder attended a World Series game in November 2016 in the FirstEnergy box in Cleveland with CEO Chuck Jones. Two months later, Householder flew to Donald Trump’s inauguration aboard FirstEnergy’s private jet and stayed in the same $500-a-night hotel as Jones. Prosecutors showed the jury photos of Householder’s son and a FirstEnergy executive in the back of a limousine just outside a fancy steakhouse dinner.

    Within weeks of the inauguration, Householder’s underling set up Generation Now, a 501(c)(4) dark money group into which FirstEnergy almost immediately started pouring what would become tens of millions of dollars.

    The money was used to fund support staff for candidates who would vote to make Householder speaker and to finance attack ads against their opponents.

    When opponents started gathering signatures to repeal the bailout law, House Bill 6, FirstEnergy poured $36 million into an effort to block it. Householder took control of the push to block the repeal, while Borges assisted — both by pressuring Attorney General Dave Yost and by paying $15,000 for inside information about the petition campaign.

     Center, former Ohio Republican Party chair, and statehouse lobbyist, Matt Borges with his attorneys outside of the federal courthouse. Photo courtesy of WEWS.

    That money was used to finance a torrent of misleading, anti-China ads and a petition-blocking effort that in some cases devolved into outright battery, witnesses testified.

    And because it was dark money, the public couldn’t know that it was FirstEnergy that was financing the gargantuan fight to pass and protect a much larger bailout from which it benefited — until federal law enforcement stepped in. During the trial, investigators from the FBI described how they used accountants, informants, subpoenas and wiretaps to unravel the tangle of dark money groups and political-action committees that were used to obscure the origins of the funds that were used in the scheme.

    “Today was a victory for the people of Ohio,” U.S. Attorney Kenneth L. Parker said on the steps of the Potter Stewart U.S. Courthouse shortly after the verdict. Parker declined to answer whether further indictments can be expected in the case — including for Jones and other FirstEnergy executives who paid the money that the jury on Thursday determined to be bribes.

    Also unknown is whether Gov. Mike DeWine’s first appointee to chair the Public Utilities Commission of Ohio, Sam Randazzo, will be charged. Randazzo took $4.3 million from FirstEnergy shortly before being nominated to the post and once nominated, he helped write the bailout law, House Bill 6. He resigned shortly after the FBI searched his Columbus condo in 2020.

    The verdict might be sending shock waves around Capitol Square and other power centers because defense attorneys for Householder and Borges argued that the conduct described by prosecutors was perfectly legal — politics as usual.

    In a statement, Parker offered a different take.

    “As presented by the trial team, Larry Householder illegally sold the statehouse, and thus he ultimately betrayed the great people of Ohio he was elected to serve,” the U.S. attorney said. “Matt Borges was a willing co-conspirator, who paid bribe money for insider information to assist Householder. Through its verdict today, the jury reaffirmed that the illegal acts committed by both men will not be tolerated and that they should be held accountable.”

    Outside the courthouse, Householder said that he will go back to his Perry County farm to plant a garden and fish with his kids while federal authorities complete a pre-sentence report and a sentencing hearing is scheduled.

    That his attorneys plan to appeal has been suspected almost since testimony began on Jan. 23. On Feb. 1, they undertook the risky gambit of accusing Judge Black of being biased against their client in open court.

    They also took a risk by placing Householder on the stand to testify in his own behalf. During cross examination, Assistant U.S. Attorney Emily Glatfelter confronted Householder with numerous inconsistencies and apparent falsehoods.

    Householder was asked just after the verdict if he thought the decision to testify was a mistake. He said it wasn’t

    “I waited two-and-a-half years to tell my story,” he said. “I wanted the opportunity to speak.”

  • On the stand, former House speaker confronted by prosecutors with inconsistencies

    On the stand, former House speaker confronted by prosecutors with inconsistencies

    Former Ohio House Speaker Larry Householder gives the thumbs up as he enters the courthouse where he is expected to testify Wednesday, March 1, 2023. Photo from WEWS.

    BY: MARTY SCHLADEN – Ohio Capital Journal

    The cross examination prompted some observers to say Householder badly damaged his defense against federal racketeering charges by using the risky tactic of testifying in his own defense. It marked the end of the evidentiary phase of the trial. Closing arguments will begin Tuesday.

    Householder and former Republican Party Chairman Matt Borges are accused in a scheme to use $61 million in funds mostly from Akron-based FirstEnergy to make Householder speaker and then to pass and protect a $1.3 billion bailout that primarily went to prop up a subsidiary’s failing nuclear plants.

    Over more than five weeks of testimony, prosecutors have put on evidence they say proves Householder passed the bailout in return for massive 501(c)(4) “dark money” contributions and for more than $500,000 in personal benefits. Perhaps as a sign that they didn’t believe things were going well, Householder and his defense team took the controversial step of putting him on the witness stand on Wednesday.

    Defense attorneys are usually reluctant to put their clients on the stand because prosecutors can use cross examination to catch them in lies. That seemed to be Assistant U.S. Attorney Emily Glatfelter’s goal as she cross-examined Householder on Thursday.

    Hardball

    Glatfelter played secret recordings of conversations that jarringly contradicted Householder’s claims that as speaker, he wanted to be a peacemaker. Under its earlier leadership, Householder said, the House Republican Caucus was too “divisive.”

    “I didn’t want enemies. I wanted friends,” Householder said Wednesday, trying to refute claims that he was an autocratic leader who demanded unstinting loyalty from lawmakers and contributors.

    Glatfelter played a wiretap recording of a conversation between Householder and Neil Clark, a lobbyist who was charged in the conspiracy and later died by suicide.

    “We like war and you know that Neil,” Householder told Clark. Then referring to Republican Reps. Dave Greenspan and Scott Lipps, whom Householder considered insufficiently supportive, he said, “If you f**k with me, I’ll f**k with your kids.”

     Former House Speaker Larry Householder, R-Glenford. Source: Ohio General Assembly.

    The former speaker had earlier denied being involved in using dark, or “C4” money to make attack ads, but when Clark asked “You’re talking about C4 money?” Householder responded, “Yeah.”

    When Glatfelter asked Householder if he punished contributors and lawmakers who supported his foes instead of him, Householder said, “I can’t think of any consequences” he had meted out to non-supporters.

    Then Glatfelter played a recording between Householder and Clark in which they discussed what to do about non-supporters.

    “We can f**k them over later,” Householder said.

    In the dark about dark money

    The prosecutor also didn’t buy Householder’s claim of general ignorance about the operations of Generation Now, a 501(c)(4) dark money group into which FirstEnergy pumped scores of millions to pass and protect the bailout legislation. The entity was created and controlled by Jeffrey Longstreth, Householder’s underling, a few weeks after Householder flew with FirstEnergy Vice President Michael Dowling to Donald Trump’s 2017 inauguration aboard FirstEnergy’s corporate jet.

    Householder claimed that he was so new to the dark money game that Longstreth had to explain how such groups worked.

    And, as he did through much of the cross examination, Householder answered questions repetitively and seemingly grudgingly. When asked by Glatfelter what the former speaker thought the purpose of Generation Now was, Householder responded, “To educate the public on important issues and support candidates who support those issues.”

    Records and testimony from Longstreth — who pleaded guilty in the case — indicated that dark money from Generation Now was used to make and run ferocious attack ads against opponents of “Team Householder.” Then it was used to claim without evidence that an effort to repeal the bailout was really a Chinese effort to take over the Ohio energy grid. 

    Because such groups don’t have to disclose their contributors, FirstEnergy was able to keep its fingerprints off its involvement in passing and protecting legislation of such interest to the company.

    Prosecutors also played recordings and showed written messages indicating that Householder was involved in planning Generation Now-funded messages. But asked by Glatfelter several times on Thursday what he believed the dark money group actually did, Householder tried not to move far from his initial answer.

    The group was for “educating the public on issues that are important to Ohio and me and supporting candidates who support those issues,” he said.

    Champagne travel for a “country Republican”

    The former speaker and the prosecutor also clashed over Householder’s flight to the Trump inaugural. Householder and his son were invited to do so by Cleveland businessman Tony George.

     Former FirstEnergy CEO Charles “Chuck” Jones. Source: FirstEnergy, via Flickr

    Glatfelter asked what George’s relationship with FirstEnergy was. Householder said George “knew Chuck” — referring to FirstEnergy CEO Chuck Jones.

    Incredulous, Glatfelter said, “There’s a difference between knowing somebody and having access to his company jet, right?”

    Householder said that the only reason Dowling, the FirstEnergy vice president, flew with the group is because George said someone from the company had to be on the flight. The implication, apparently, was that the trip wasn’t part of the plan for a FirstEnergy bailout.

    Householder said he agreed to take the flight to save time. But traveling by private jet might not fit with  his explanation earlier in the day of the difference between him and Borges.

    “He’s a country club Republican and I’m more of a country Republican,” Householder said.

    The former speaker also claimed that he didn’t intend to fly free. 

    “From day 1, I was going to pay for that flight,” he said.

    More than two months later, Householder paid FirstEnergy $2,647. He said he paid then because that’s how long it took for FirstEnergy to send him a bill — not because the Dayton Daily News had written a story about the flight and the questionable appearance that it made.

    That Householder would take a private jet without knowing what the cost would be is difficult to square with another statement he made about himself when he testified a day earlier.

    “Anybody who’s been around me knows I’m cheap,” Householder said. “I drive a 2001 GMC Sonoma and I don’t like to spend money.”

    Glatfelter punched other holes in Householder’s attempts Wednesday to distance himself from FirstEnergy executives on the trip to the Trump inaugural. She showed that George reserved rooms at the same hotel for Householder and CEO Jones within a minute of each other and paid the same amount for both — $1,500. 

    Householder said he believed the Ohio Republican Party paid for his room.

    Personal payments, questionable sources

    Observers have said that one of the most damning kinds of evidence against Householder is that Longstreth had paid more than $500,000 to settle a lawsuit against the speaker, repair a house he owned in Florida, and to retire credit card debt. Longstreth said he had papers drawn up to formalize the payments as loans, but Householder never would sign them.

    Householder said his plan was to pay Longstreth when the Florida house was sold. When it finally did sell — for nearly $700,000 — Householder said he couldn’t pay Longstreth because both had been arrested in July 2020 and he believed any payments to a co-defendant could be used against him. The former speaker said he planned to pay Longstreth when the case is over.

    Householder also showed a curious lack of interest in the sources of Longstreth’s money. 

    Longstreth testified that he received millions in FirstEnergy money through Generation Now and into a separate account that he used to pay Householder’s debts, hire contractors, pay himself, and the like.

    Glatfelter asked Householder where Longstreth got the money to pay Householder’s debts and to run the sweeping political operation.

    “His business wasn’t my business,” Householder said of the man he hired to recruit candidates, get them elected, and then get them to vote to make him speaker.

    Lack of disclosure

    Glatfelter also took Householder to task for not disclosing debts and gifts in compliance with state ethics laws. 

    He didn’t disclose a $1.89 million judgment against him over a failed Alabama coal mine. Nor did he disclose 2016 World Series tickets that were given him at a discount from the going rate of $2,500 apiece, Glatfelter said. And he failed to report the $1,500 hotel room George got him for Trump’s inauguration.

    Householder testified that his attorney filed the disclosures and that he had only “glanced over” them. 

    Glatfelter pointed him to the portion of the disclosures in which the filer says he or she knows the contents of the disclosure and has to swear it’s accurate — a legally binding attestation similar to the one Householder made before testifying. She asked Householder if the documents bore his electronic signature.

    “I don’t even know what an electronic signature is,” he replied.

    Pressed, Householder responded with several versions of, “I relied on the advice of my attorney.”

  • Citing a hazy memory, former rep seems to distance himself from scandal

    Citing a hazy memory, former rep seems to distance himself from scandal

    State Rep. Nino Vitale, R-Urbana. Photo from Ohio House website.

    Vitale was said to be a big supporter of Householder now charged with racketeering

    BY: MARTY SCHLADEN – Ohio Capital Journal

    CINCINNATI — Former state Rep. Nino Vitale on Tuesday testified that he didn’t have much of a memory for — nor was he much interested in — raising money or campaigning for office. At several points, the Republican from Urbana even said he didn’t remember what year he was first elected to the legislature (it was 2014.)

    But on cross examination, federal prosecutors showed him records and written communications indicating that Vitale was regarded as an enthusiastic member of “Team Householder” who, as part of the team, received thousands in campaign funds and other assistance that originated with Akron-based FirstEnergy.

    As former Speaker Larry Householder’s appointee to chair the Energy and Natural Resources Committee, Vitale in 2019 helped to pass a $1.3 billion bailout that primarily benefited FirstEnergy. When they announced arrests in the summer of 2020, federal prosecutors said the bailout was at the center of what was likely the largest bribery and money-laundering scandal in Ohio history.

    Vitale was called by Householder’s lawyers in the trial, which started on Jan. 23. Householder and former Ohio Republican Party Chairman Matt Borges are charged with racketeering in an alleged scheme to use $61 million in utility money to elect friendly lawmakers who would make Householder speaker and then bail out FirstEnergy’s failing nuclear and coal plants.

    Vitale has long been known for controversial political gestures — including refusing to wear a mask at the height of the coronavirus pandemic because human faces are “the likeness of God.“

    But on Tuesday, Vitale portrayed himself as a reluctant politician. In a possible nod to how uncompetitive his district was, the former lawmaker said he didn’t have to do much to get reelected.

    “The whole marketing side of things wasn’t big on my radar because my district elected me overwhelmingly and frequently,” Vitale said.

    Householder’s attorneys seemed to call Vitale and other Householder supporters in the House to testify so they could say they believed the bailout law was good public policy. But U.S. District Judge Timothy Black limited such testimony, saying the proceeding wasn’t a referendum on the merits of House Bill 6.

    Vitale also said he never felt pressured to support Householder for speaker or to support the bailout. 

    But Assistant U.S. Attorney Megan Gaffney Painter then posed a series of questions that seemed to be intended to show that Householder made Vitale chairman of the Energy and Natural Resources Committee not because Vitale had any particular qualifications, but because he was an enthusiastic member of Team Householder who would do the speaker’s bidding.

    Vitale tried to refute that characterization.

    When Painter tried to get him to agree that he had little in his background to school him in large-scale electricity generation or the management of the state’s natural resources, Vitale wouldn’t. 

    “I know quite a lot about those topics, actually,” he testified.

    Vitale said he works for his wife’s family’s company, which makes parts for truck brakes. It has an electricity substation and it sits on 30 acres, and those factors gave him expertise on the power grid and the environment, Vitale said.

    When Painter proposed that Vitale had no academic credentials that would make him expert in those areas, Vitale disagreed again, saying his business degree provided him with such knowledge.

    “In a business degree, part of what you study is energy inputs to a business,” Vitale said.

    The former lawmaker also claimed that he wasn’t very familiar with FirstEnergy and had to be convinced to support the bailout bill. Then Painter displayed a text message from FirstEnergy Vice President Michael Dowling to CEO Chuck Jones on Feb. 17, 2019 — before the bill was introduced. Earlier testimony showed that the executives believed the bailout was critical to their company, and Jones had asked Dowling who was going to chair the House Energy and Natural Resources Committee.

    “Nino Vitale from Springfield will chair,” Dowling responded. “Good friend and bigtime (Householder) supporter.”

    Confronted with the message, Vitale said he’d only met Dowling a few times.

    Vitale also disputed that it was Householder who first broached the idea of Vitale being chairman.

    “I asked him,” Vitale said.

    Then Painter played a voicemail message that Vitale left for Householder in January 2019, just after Householder had been made speaker. In it, Vitale said he had talked the matter over with his family.

    “I’m in if that’s what you want me to do,” Vitale said.

    As Painter tried to move on to another question, Vitale insisted that chairing the Energy and Natural Resources Committee was originally his idea.

    And to refute Vitale’s claims that he was half-hearted about fundraising and political marketing, Painter displayed an October 4, 2017 text message Vitale sent to Jeffrey Longstreth, Householder’s right-hand man in making him speaker and then passing the bailout. It certainly seemed to link FirstEnergy’s policy agenda to Vitale’s desire for corporate contributions.

    FirstEnergy lobbyist “Ty Pine wants to meet with me on a legislative matter and I want to meet with him on a contribution matter,” Vitale said in his message.

    After more than a month, testimony in the trial is entering the homestretch. Householder’s final witnesses — including Householder himself — are expected to testify Wednesday and Thursday. Then it will be Borges’ turn to call any witnesses he may have.

    After that, the prosecution and the defense teams will make closing statements, Judge Black will instruct the jury and then it will deliberate.

  • Ohio utility regulator front and center in massive bailout scandal

    Ohio utility regulator front and center in massive bailout scandal

    FBI agents remove boxes of materials from PUCO Chairman Sam Randazzo’s condo in Columbus Nov. 17, 2020. Photo courtesy of Daniel Konik/Statehouse News Bureau.

    BY: MARTY SCHLADEN – Ohio Capital Journal

    CINCINNATI — Ohio’s utility regulator is at the center of a massive bribery and money laundering scandal that has been the focus of a trial here since late last month. In 2019, its chairman and a very recent senior official played a central role in writing corrupt bailout legislation that would give more than $1 billion in subsidies to companies the Public Utilities Commission of Ohio was supposed to be regulating.

    But did their role in the process violate any PUCO rules? The answer is unclear.

    When it comes to being a consumer watchdog, the PUCO doesn’t have the best track record. 

    Since 2008, it has granted more than $1 billion in electric rate increases that were later declared illegal by the Ohio Supreme Court. But, thanks to the way the increases — or “riders” — were written, there’s no way to force utilities to return those ill-gotten gains to ratepayers.

    In at least one of those instances, a regulator might have known the rate hike was illegal when he voted to grant it.

    In June of 2019 — as Akron-based FirstEnergy was funneling millions through dark-money groups to pass the bailout that is the subject of the trial here — the Supreme Court struck down an increase that had already paid the company a non-refundable $460 million. Asim Haque, who months earlier was chairman of the PUCO, sent a FirstEnergy executive a text suggesting that Haque knew the increase was illegal when he voted for it. Haque then said he was just kidding.

    Then, just last month, the PUCO approved an increase of more than 50% in fixed rates for Columbia Gas without making the company go through a formal process to show that it needs the money. That means that after five years throughout much of Ohio, it likely will cost nearly $60 a month just to have gas service  — regardless of whether you live in a 500 square-foot apartment or if you live in a mansion on a five-acre lot. Any payments for gas itself will be in addition to that amount.

    It doesn’t appear that Columbia owner NiSource needed the money. Last year, before the PUCO allowed the rate hike, NiSource’s profits came in $217 million — or 41% — higher than expected. Then, a month after the increase was granted, NiSource announced it was increasing its profit forecast for 2023.

    In a press release, the company boasted of “strong regulatory execution” — including by winning the fixed-rate increase from the PUCO.

    And then there’s House Bill 6, the 2019 law that is the subject of the trial in federal court here that has been ongoing since Jan. 23.

    Former Ohio House Speaker Larry Householder and former Ohio Republican Party Chairman Matt Borges are on trial for their participation in what prosecutors say is likely the biggest bribery and money laundering scandal in Ohio history. They allege that $61 million that mostly came from FirstEnergy was used to make Householder speaker in 2019, and then to pass and protect the $1.3 billion bailout. Most of that money was intended to prop up FirstEnergy’s failing nuclear and coal plants.

    No current or former PUCO employees have been charged in the scandal. But, to put it charitably, the conduct of at least two of them was puzzling — given that the agency’s mission is to protect ratepayers who don’t have a choice about buying the utilities’ products.

    In January 2019, Householder won the speakership and was beginning his push for a FirstEnergy bailout. At the same time,  FirstEnergy lobbyist Ty Pine sent PUCO senior advisor Pat Tully’s resume to Jeff Longstreth, Householder’s right-hand man, according to testimony in the trial. Within weeks, Tully had moved from his PUCO job to one as senior advisor for energy policy in the House Republican Caucus.

    Sam Randazzo, a former FirstEnergy consultant, was confirmed as Gov. Mike DeWine’s nominee to chair the utility commission in April 2019. When he nominated Randazzo, DeWine brushed off warnings that his nominee had “opaque and undisclosed” ties to FirstEnergy.

    In the Householder trial, Tully testified that while Randazzo was still a nominee, he met with Tully, Householder and Rep. Nino Vitale R-Urbana. From there, Tully worked with Randazzo to help draft the utility bailout, HB 6, and to reconcile it with draft legislation submitted by FirstEnergy. The bill secured final passage in July 2019 — months after Randazzo had taken the helm at the utility commission.

    In other words, Ohio’s top utility regulator helped write a law that gave a billion-dollar bailout to a company he was supposed to be regulating on the ratepayers’ behalf. And he was heading an agency that over the previous decade had awarded electric utilities more than $1 billion in illegal, non-refundable rate hikes.

    Randazzo would later resign after the FBI in 2020 raided his Columbus condo. And in a deferred prosecution agreement, FirstEnergy admitted that it paid him $4.3 million just before he became PUCO chairman.

    But does the PUCO have any rules against the role Randazzo played in drafting HB 6? 

    Asked if the agency had a policy prohibiting a commissioner from helping write legislation affecting a utility he or she is supposed to be regulating, spokesman Matt Schilling initially seemed to say that it did not.

    “The PUCO is a state agency and will always be responsive to requests for information or technical assistance to the Ohio General Assembly on matters related to utilities and commercial transportation,” Schilling said in an email last week.

    But in answer to a follow-up, Schilling seemed to say something different. He was asked if that means PUCO believes there was nothing inherently improper about its chairman helping to draft legislation creating subsidies for utilities the agency regulates.

    “No, I never stated anything like that,” Schilling replied. “The PUCO does not comment on ongoing proceedings or court cases.”

    So what about commission employees doing as Tully did when he had a FirstEnergy lobbyist passing out his resume? After all, you might pull punches as a regulator if you’re hoping to land a job with one of the companies you’re supposed to be regulating.

    Schilling’s response might not be very reassuring. He cited a law that “prohibits Commission employees from seeking employment with utilities regulated by the Commission.”

    But Schilling also sent along agency guidance that contains a pretty big loophole.

    “Although this law prohibits Commission employees from soliciting Commission-regulated utilities for employment, it does not prevent employees from considering employment opportunities with these utilities in instances in which the utility approaches the employee,” it said.

    It seems that, after the fact, it might be difficult for the PUCO to figure out who approached whom when an employee jumps ship for a well-paid utility job. And its protections against conflicts of interest during the hiring process don’t seem ironclad.

    “However, if you are contacted by a utility concerning a possible job offer, you must immediately advise your supervisor of the contact so that your supervisor can limit your duties to matters which do not involve the utility in question while any discussions are taking place,” the guidance said.

    In Tully’s case, he didn’t end up directly on FirstEnergy’s payroll. But he did help write a law that the company paid more than $60 million for.

  • Defense lawyer boils over in Ohio utility bailout and political bribery racketeering trial

    Defense lawyer boils over in Ohio utility bailout and political bribery racketeering trial

    Former Ohio House Speaker Larry Householder, a Perry County Republican, second from left, with attorneys outside of his racketeering trial. Photo courtesy of WEWS.

    BY: MARTY SCHLADEN – Ohio Capital Journal

    CINCINNATI — The defense of former Ohio House Speaker Larry Householder erupted Thursday in Householder’s epic corruption trial.

    Defense attorney Mark Marein of Cleveland suggested it was because of U.S. District Judge Timothy Black’s unfairness. But it came after a day in which the defense team’s attempts to undermine prosecution witnesses’ credibility might have come to naught.

    The sparks flew in the fourth week of the trial. Householder and former Ohio Republican Party Chairman Matt Borges are accused of racketeering in a scheme to use $61 million in utility money to make Householder speaker and pass a $1.3 billion bailout that mostly benefited Akron-based FirstEnergy, the primary contributor.

    Earlier on Thursday, defense attorney Steven Bradley cross examined Jeffrey Longstreth, who operated as Householder’s right-hand man through his bid for the speakership and the 2019 passage and defense of the bailout law, House Bill 6.

    Longstreth was arrested along with Householder, Borges, and two others in July 2020. He is now cooperating with prosecutors in exchange for a sentencing recommendation of less than six months.

    The dinners

    During direct examination Wednesday, Longstreth described fancy dinners with Householder and FirstEnergy’s top executives during Donald Trump’s inauguration in 2017 in Washington, D.C. 

    At one, Longstreth described being at one end of a long table with FirstEnergy Vice President Michael Dowling in a noisy steakhouse, while Householder sat with company CEO Chuck Jones at the other. Longstreth said he couldn’t hear the conversation at the other end of the table, but at his end Dowling told him FirstEnergy needed help and it wanted to help Householder become speaker.

    Dowling instructed Longstreth to set up an organization to receive FirstEnergy’s millions, Longstreth said. 

    “He said (the money) needed to be undisclosed and unlimited contributions,”  Longstreth testified on Wednesday.

    Apparently seeking to impeach Longstreth’s memory, Bradley on Thursday showed the jury an itinerary indicating that Jones took the FirstEnergy corporate jet to D.C. the morning after the steakhouse dinner. He also produced a credit card receipt showing that Jones attended a dinner at a different restaurant the following night than where a second, more-intimate dinner was described by Longstreth on Wednesday.

    But Assistant U.S. Attorney Emily Glatfelter asked Longstreth if itineraries change. He agreed they often do.

    She then produced credit card receipts and car records that indicated Jones may well have been in D.C and could have attended the first dinner as Longstreth described. She also showed that on the following night, the dinner Bradley said Jones attended ended about 30 minutes before the one Longstreth said he attended began.

    Longstreth testified that it was common at presidential inaugurations to attend multiple receptions and dinners in the same evening. Apparently that’s a major purpose of the quadrennial gatherings: To stay in $600 hotels, eat multiple $200 dinners, and figure out how to split up the taxpayers’ —or  ratepayer’s — money.

    Whistleblower former state Rep. Dave Greenspan

     Former State Rep. Dave Greenspan, R-Westlake. Official photo.

    After Longstreth left the stand, the prosecution called former state Rep. Dave Greenspan, R-Westlake. He said he never voted to make Householder speaker and he never supported House Bill 6. 

    “I didn’t believe in corporate bailouts,” Greenspan said, explaining that this one was especially hard to support because FirstEnergy hadn’t shown that it needed the money and the bill put no restrictions on how it was spent. “There was nothing in the bill that required FirstEnergy to do anything.”

    As a sign of how unpopular the bill was, 17 Republicans voted against it when it passed the House in April 2019. And it’s an important reminder that it would never have become law without the support of Ohio House Democrats.

    Greenspan described the intense pressure he was under from Householder and lobbyist Neil Clark to vote for the bill. He was so disturbed by it that he contacted a member of the U.S. Marshal’s Service, who put him in touch with the FBI.

    During cross examination, Marein, another of Householder’s attorneys, seemed dumbfounded that Greenspan contacted the FBI, which he referred to as the “Federal Bureau of Investigation” in a tone that in many places would pass for shouting.

    Then, as he tried to read lengthy passages of Greenspan’s grand jury testimony, Judge Black repeatedly cut the attorney off and told him to ask a question.

    Another attack at the judge

    On Feb. 1, Marein undertook a risky gambit by accusing the judge of bias, saying that Black had it in for his client because Householder opposed Black’s run for Ohio Supreme Court 22 years ago. After the jury filed out Thursday afternoon, Marein doubled down.

    He started off so loudly that Black admonished Marein to show the same respect for him that Black believed he’d shown Marein.

    A little more quietly, Marein said, “You’re really tying our hands. Overruling our objections. Quite frankly, I don’t know what’s going on.”

    Then he added, “Is there something personal against Mr. Householder?”

    When Marein finished, Black asked, “Is that all?”

    Marein said yes, Black banged his gavel and said, “We’re in recess.”

  • Corruption trial witness: Householder called them “loans” but wouldn’t sign documents

    Corruption trial witness: Householder called them “loans” but wouldn’t sign documents

    Former Ohio House speaker Larry Householder arrives for day two of his racketeering trial. Photo by Morgan Trau, WEWS.

    Former House speaker received $500K in bailout scandal and called them loans, but never paid any of it back

    BY: MARTY SCHLADEN – Ohio Capital Journal

    CINCINNATI — In Washington, D.C. during Donald Trump’s January 2017 inauguration, then-Ohio Rep. Larry Householder had a dinner meeting with the top executives with Akron-based FirstEnergy. The executives stressed their likely need for a state bailout — and their need for a way to make unlimited, untraceable contributions to Householder’s bid for speaker, Householder’s top lieutenant testified Wednesday.

    By late 2019, scores of millions in FirstEnergy dollars had passed through the 501(c)(4) “dark money” account that had been set up at the executives’ request. Householder had won the speaker’s gavel. And the state had passed a $1.3 bailout that mostly benefited a FirstEnergy subsidiary. 

    In addition, Householder had gotten more than $500,000 for personal expenses that had originated with the utility. The speaker agreed to call them “loans,” but he never quite got around to signing legal documents that were prepared — much less to paying back any of the money, the witness, Jeffrey Longstreth, testified Wednesday.

    If true, it and other events described Wednesday illustrate widespread ratepayer-financed malfeasance that threatened to make Householder speaker in alliance with Ohio utilities almost indefinitely.

    Four weeks into the blockbuster corruption trial, Longstreth’s testimony could prove crucial. Because he set up the dark money group and handled much of Householder’s political business, Longstreth is likely to have had one of the best views into whether the former speaker enriched himself in exchange for championing the bailout.

    Showing that Householder personally enriched himself as he rammed through an unpopular corporate bailout could go a long way to convincing the jury that the former speaker participated in an illegal conspiracy. 

    He and former Ohio Republican Party Chairman Matt Borges are being tried on charges of racketeering. Federal prosecutors have said the $61 million in utility money that was used to pass the billion-dollar bailout is likely the largest bribery and money laundering scandal in Ohio history.

    Longstreth, who functioned as Householder’s political strategist and general fixer, has pleaded guilty and is cooperating with prosecutors in exchange for a favorable sentencing recommendation. On Wednesday, he explained to jurors that by the time of the dinner meeting during Trump’s inauguration, it was clear to him that Householder was well familiar with then-FirstEnergy CEO Chuck Jones and what Jones wanted for his company.

    Meetings with FirstEnergy executives

    In late 2016, as Householder captured a House seat that he held in the early 2000s, FirstEnergy was drowning in debt from its money-losing nuclear and coal plants. The company was laying the groundwork to send the subsidiary that owned the plants into bankruptcy, and executives calculated that state or federal subsidies would make it attractive to buyers.

    In December 2016, the newly elected Householder hired Longstreth to spearhead his plan to elect enough sympathetic Republicans in 2018 that they would make Householder speaker at the start of 2019.

    A month later, Householder and Longstreth were in D.C. for Trump’s inaugural — and to meet with Jones and FirstEnergy Vice President Michael Dowling. At one steakhouse dinner, Longstreth was seated at the end of a long table with Dowling, and Jones and Householder were seated at the other.

    Dowling “said they were going to get going, get your organization set up,” Longstreth testified, explaining that he understood “organization” to mean a limited liability corporation or a dark money group that could receive FirstEnergy money. “He said (the money) needed to be undisclosed and unlimited contributions.”

    The next night, the dinner at another D.C. steakhouse was more intimate, with just Householder, Jones, Dowling, Longstreth and maybe one other in attendance. Jones, the FirstEnergy CEO, explained the company’s financial woes and that they were working on a federal solution to them.

    “They said, ‘If not, we’re going to need something on the state level,’” Longstreth quoted Jones as saying.

    He added that Householder mostly sat quietly through that part of the discussion because he “already knew everything that was being said, it seemed to me.”

    Longstreth said he didn’t know about all of Householder’s previous dealings with Jones, but said the men were well enough acquainted that they attended a World Series game together in Cleveland the previous October.

    The political strategist testified that it was clear to him that FirstEnergy’s enormous contributions were expressly in exchange for a bailout.

    “I knew their donations were (predicated) on the expectation that something like House Bill 6 would happen,” Longstreth said.

    Money for Householder

    Householder didn’t just get money from FirstEnergy to advance his political ambitions, Longstreth said.

    In spring of 2017, Householder called Longstreth into his office to complain of financial problems. He was head of a group of investors in an Alabama coal mine that had defaulted on a loan, he was having problems with his Perry County farm and he had a house in Florida that was badly in need of repair.

    Longstreth said Householder told him that he needed to solve some of those problems or he’d be forced to drop his bid for speaker. And, he said, because Householder was his only client, that would be a big problem for Longstreth, too.

    Using money out of an account that was funded by the dark money group that FirstEnergy paid into, Longstreth said he paid lawyers, settled the Alabama lawsuit and financed the repair of Householder’s Naples, Fla., home.

    Longstreth had a loan agreement drawn up, but Householder never signed the papers, he said.

    “We had multiple discussions, but it was a kick-the-can-down-the-road type of scenario,” Longstreth said.

    In late 2019 when the issue came up, Householder “asked me in the course of our conversation, ‘Are you whole?’” Longstreth said, explaining that he interpreted the question to mean that Householder wanted to know if somebody other than Longstreth had ultimately paid Householder’s debts. 

    “It was one of those hair-on-the-back-of-your-neck situations,” Longstreth said, adding they both knew the arrangement the speaker was suggesting was illegal. 

    At another meeting at the Buckeye Lake AMVETS post, Householder requested help with credit card bills, Longstreth said. Earlier in the trial, prosecutors displayed bank records showing that the debt was about $20,000.

    Longstreth said he stressed to Householder that they needed to stay on the right side of the law. 

    “I said it had to be something we can do legally because you can’t get something for nothing,” Longstreth said.

    Testimony on widespread corruption

    Wednesday’s testimony about Householder’s loans was against a backdrop of widespread corruption that threatened to become endemic.

    Before Longstreth took the stand, Pat Tully testified that within weeks he moved from a senior position at the state’s utility regulator, the Public Utilities Commission of Ohio, to being a senior advisor to the House Republican Caucus. In early 2019, Tully said, Householder met with him, Rep. Nino Vitale, R-Urbana, and Sam Randazzo, Gov. Mike DeWine’s nominee to chair the PUCO — and who around that time received a $4.3 million payment from FirstEnergy.

    Tully described how he worked with Randazzo to help draft the utility bailout, House Bill 6, and to reconcile it with draft legislation submitted by FirstEnergy. He wasn’t asked about the propriety of a current and very recent regulator writing a law in which one of the state’s largest utilities had such an obvious interest.

    In Longstreth’s testimony, he said that after HB 6 passed in 2020, he and Householder mounted an effort that could make him speaker for the foreseeable future in a kind of permanent alliance with Ohio’s big utilities.

    Earlier in the trial, prosecutors played recordings of Householder ally Neil Clark saying that thanks to dark money, utilities like FirstEnergy could contribute vast sums to politicians and keep their origin secret. In that way, Clark said, supposedly regulated utilities could exercise huge influence behind the scenes.

    Ohio law currently limits lawmakers to eight years in either house, but they’re free to run for the other chamber after that — and can do so as long as they like. So Householder’s speakership would at least have been interrupted in 2024.

    But Longstreth found that the idea of passing a law limiting lifetime service to 16 years polled well. And it had a huge silver lining for Householder — it would reset the clock so the speaker was free to stay in the House and be its leader for the next 16 years if he could keep getting the votes.

    Longstreth estimated that it would cost $15 million to $20 million to buy ads selling the idea to voters. For the money, Householder and Longstreth decided to turn to utilities FirstEnergy and AEP, both of which reaped millions from the bailout. Their interest in keeping Householder in the speaker’s chair was clear, Longstreth said.

    “It kind of went without saying that they would support anything that was good for the speaker because anything that was good for the speaker was good for them,” Longstreth said.

    After meetings with top executives with both companies in February 2020, Householder secured pledges of support from each, Longstreth said. Then reality intervened.

    “COVID started in March and then we were arrested in July,” Longstreth said.

  • Ohio’s billion-dollar bailout bribery trial showcasing rampant arrogance, corruption, and enabling

    Ohio’s billion-dollar bailout bribery trial showcasing rampant arrogance, corruption, and enabling

    by David DeWitt

    Every day more details emerge from Ohio’s billion-dollar bailout bribery trial showcasing gargantuan levels of arrogance, corruption, and enabling among energy executives and Ohio’s most powerful Republican politicians.

    Yesterday in federal court, prosecutors played recordings of late Ohio right-wing lobbyist Neil Clark that showed in extravagant detail how dirty Ohio politicians and power players really are.

    Pointing to the U.S. Supreme Court’s disastrous Citizens United ruling, Clark described to undercover FBI agents how to make dark money contributions in a way calculated to get a public official’s attention, saying those should come in chunks of $15,000, $20,000, $25,000 or more.

    “Based on a Supreme Court decision, businesses can do this and nobody can do anything about it,” Clark said. “Politicians can get a bunch of money and say, ‘I didn’t know.’”

    And that exactly how many Ohio politicians have been operating, this trial is showing: Selfish, reckless, greedy, amoral, large-scale, pay-to-play grift.

    The scope of corruption at every turn in Ohio is a bit staggering, so let’s take a look at all we’ve learned so far, all together in one place:

     Indicted former Ohio House Speaker Larry Householder. Official photo.

    Executives from financially struggling FirstEnergy flew Ohio House speaker aspirant Larry Householder and associate Jeff Longstreth to D.C. on the FE corporate jet in January 2017 for some swanky steakhouse dinners.

    Two weeks later, Longstreth opened a bank account for a dark money group called Generation Now and that same day emailed then-FirstEnergy Vice President Michael Dowling “wiring instructions” so the company could put money in the account. A day later another dark money group was opened, Partners for Progress, which was funded exclusively by FirstEnergy, an FBI agent testified.

    Partners for Progress was the dark money project of then-FirstEnergy lobbyist Dan McCarthy. It received $5 million from FirstEnergy within a few weeks of when McCarthy founded it.

     Juan Cespedes. Photo provided.

    During a meeting between Householder and FirstEnergy lobbyists in October 2018, a lobbyist named Robert F. Klaffky slid an envelope containing a check for $400,000 across the table and under Householder’s hand as they discussed a $1.3 billion ratepayer bailout of failing nuclear and coal plants, former FirstEnergy lobbyist Juan Cespedes testified.

    “Our client cares very much about this issue,” Klaffky told Householder.

    “Well yes they do,” Householder replied after peeking into the envelope.

    Cespedes has testified that the campaign checks were “specifically tied” to the bailout.

    “We were trying to establish the fact that our support was specifically tied to the legislation,” Cespedes said.

    All told, Householder’s dark money political machine amassed $61 million in utility company contributions to elect a legislature that would make him speaker and pass the bailout.

    This included allocating millions in dark money for ads promoting Householder that called dark money “dirty.”

    In its deferred prosecution agreement, FirstEnergy admitted that it funneled those millions into the operation through the entities to make Householder speaker and to beat back attempts to repeal the bailout he championed, House Bill 6.

    Why did it go through the dark money groups like that? It was thought to be bad optics if the struggling company were publicly giving the money, Cespedes said in testimony.

    An FBI agent testified that hundreds of thousands in FirstEnergy money went to Householder personally for expenses ranging from paying off his credit card bills to cleaning the pool at a home he owned in Florida and settling a coal mine lawsuit for him.

     Ohio Lt. Gov. John Husted. Official photo by Vivien McClain Photography.

    Text messages between FirstEnergy executives show that Householder and FirstEnergy officials expected help from the administration of Gov. Mike DeWine and Lt. Gov. Jon Husted in passing House Bill 6 through the Ohio Senate.

    Starting in 2017, FirstEnergy donated more than $1 million to nonprofit groups and political campaigns to help elect DeWine.

     Vivien McClain Photography

    In the Neil Clark recording played at trial, he pegs FirstEnergy contributions toward DeWine at around $3 million.

    “The governor got about $3 million from FirstEnergy,” Clark said on June 6, 2019, explaining that even so, Mike DeWine was an inconsistent supporter of the bailout.

    “The governor, when he knew Larry (Householder) didn’t have the votes, he ran away from him,” Clark said. “Now he wants to come back.”

    Clark also said that DeWine is highly influenced by campaign contributions.

    “I don’t want to say he’s a pay-to-play guy, but (DeWine is) clearly influenced by people who have money,” Clark said.

    After winning election, DeWine and Husted dined with FirstEnergy executives in December 2018.

    In early 2019, DeWine appointed the FirstEnergy lobbyist operating Partners for Progress, Dan McCarthy, to be his legislative affairs director, meaning McCarthy was in charge of representing DeWine’s interests before the General Assembly.

    DeWine also appointed as chairman of Ohio’s utility watchdog a former FirstEnergy consultant who FirstEnergy said they bribed $4.3 million just before he took his seat on the Public Utilities Commission of Ohio.

    Even though he was supposed to be regulating the utility, the official, Sam Randazzo, played a role in writing the bailout legislation, according to documents released by the Ohio House.

    While it was under consideration in the legislature, 2019 text messages show then-FirstEnergy VP Dowling telling then-CEO Chuck Jones that Husted was working on extending the timeline for the subsidies: “Just had long convo with JHusted…JH is working on the ten years, he’s afraid it’s going to end up being eight.”

     Former FirstEnergy CEO Charles “Chuck” Jones. Source: FirstEnergy, via Flickr

    Text messages shown at trial indicate that former Ohio Republican Party Chairman Matt Borges was assigned to try to enlist Ohio Attorney General Dave Yost’s help with the bailout. Borges, a FirstEnergy lobbyist after leaving his post as Ohio GOP chair, had previously served as Yost’s campaign manager and a political advisor.

    The texts showed that in June of 2019, Yost thought the proposed utility bailout was a bad law, but he didn’t publicly oppose it because of $24,000 in campaign support he’d received from FirstEnergy.

     Ohio Attorney General Dave Yost. Official photo.

    In a text to Cespedes, Borges said “Don’t repeat this,” but Yost believed the bailout was a bad law.

    Yost “‘would be out front (in opposition) if not for (FirstEnergy) support and your involvement,’” Borges quoted Yost as saying.

    DeWine signed House Bill 6 the same day it was passed by the legislature.

    Also that same day, Jones sent a photo-shopped image of Mount Rushmore to the bribed utility watchdog, Randazzo.

    The faces of Mount Rushmore were replaced with Randazzo, two FirstEnergy executives and another utility company executive with the caption: “HB6 F— ANYBODY WHO AIN’T US.”

    An effort to repeal the bill was soon mounted.

     Sam Randazzo, then a private sector attorney, testifies before the PUCO in March 2018. Source: The Ohio Channel.

    During the repeal effort, FirstEnergy executives were fighting it. Jones texted Dowling to say, “DeWine’s on board. I talked to him on Wednesday.” A DeWine spokesperson said the governor has no recollection of his conversation with Jones.

    As the repeal battle raged, FirstEnergy’s Dowling worked to keep the name of a senior aide to DeWine — McCarthy — off of a $10 million infusion of corporate cash into the fight. He did so even after an assistant told him it would violate IRS rules to not list McCarthy on the transaction, according to text messages presented in court.

    Borges paid $15,000 off the books in 2019 in an attempt to gather inside information about the campaign to repeal the $1.3 billion utility subsidy, Cespedes testified.

    Borges and Cespedes also texted about protecting Ohio Secretary of State Frank LaRose if he faced pressure to recuse himself as chair of the Ohio Ballot Board over the repeal effort.

     Center, former Ohio Republican Party chair, and statehouse lobbyist, Matt Borges with his attorneys outside of the federal courthouse. Photo courtesy of WEWS.

    “He’s going to be a friend in this process,” Borges texted to Cespedes. “So let’s be prepared to speak up for him.”

    Cespedes responded, “We will support him more than anyone.”

    Additional texts said Borges was in touch with LaRose.

    “LaRose is expecting us to be publicly supportive of him,” Borges wrote in a July 2019 text.

    In another text, Borges wrote that LaRose wanted to meet with John Kiani, now chair of Energy Harbor (then FirstEnergy Solutions).

    Kiani reportedly stood to make $100 million personally from the $1.3 billion swindle of Ohio ratepayers, by selling the power plants after enticing buyers with the bailout.

    That same chairman in an email referred to Borges’ scheme to spy on the repeal effort as a “black op” and said he was prepared “to do whatever it takes” to defeat it, Cespedes testified.

     Ohio Secretary of State Frank LaRose. Official photo.

    Kiani had plans to operate the two FirstEnergy Solutions nuclear power plants in Ohio for a short period, get a government bailout and then sell the power plants in a deal in which he stood to make $100 million, Cespedes testified.

    Kiani remains the executive chairman of Energy Harbor.

    Randazzo has not been charged and denies wrongdoing. McCarthy has also not been charged, but did resign from the DeWine administration.

    DeWine has steadfastly defended McCarthy as well as his selection of Randazzo.

    DeWine and Husted, as well as Yost and LaRose, were reelected to second four-year terms in 2022.

    Husted, Yost, and LaRose are all poised to continue to seek political advancement in Ohio.

    Generation Now, Cespedes, and Longstreth have pleaded guilty.

    FirstEnergy entered into its deferred prosecution agreement.

    Neil Clark died by suicide in 2021, nine months after being indicted by federal prosecutors.

    The federal racketeering trials of Householder and Borges are ongoing and expected to last until March.

    Jurors will review all the evidence and decide their fate.

    It will be up to Ohioans to decide how long we will continue to allow our politicians to rob and abuse us in service to themselves and private interest profiteering.

    Every day we learn more about how Ohio government has really been operating under the design of unscrupulous thieves and grifters, rotting the institutions of our state into a national joke and embarrassment: a grotesque totem to pay-to-play corruption; a decayed and decrepit husk of representative democracy.