Larry Householder addresses reporters after lawmakers voted to expel him from the General Assembly. He has pleaded not guilty to a racketeering charge and awaits trial. Photo by Jake Zuckerman, OCJ.

BY: MARTY SCHLADEN – Ohio Capital Journal

It appears that federal prosecutors have a mountain of evidence they want to present to the jury in their racketeering case against former Ohio House Speaker Larry Householder and former Ohio GOP Chairman Matt Borges. 

They have emails, text messages, wiretap transcripts, and the testimony of undercover agents and confidential informants. They have so much material that U.S. District Judge Timothy Black said prosecutors and defense attorneys labored mightily before the trial even started to agree on what could be presented to the jury. The process was meant to avoid bogging down what’s already expected to be a six-week ordeal.

But all that evidence could miss the mark if none of it shows that Householder undertook an “official act” in exchange for all the millions Akron-based FirstEnergy funneled into 501(c)(4) dark money groups to support the effort to elect friendly Republicans who would vote to make Householder speaker. The U.S. Supreme Court overturned a public corruption conviction on that basis just six years ago.

Householder is accused of masterminding a conspiracy to use $61 million from FirstEnergy and other utilities to make himself speaker and in return ramming through a $1.3 billion ratepayer bailout of failing nuclear and coal plants. His trial began last week, but after two days of testimony it was delayed — first because of weather and then because a juror was diagnosed with COVID.

But last week, FBI Special Agent Blane Wetzel testified about conduct that made both Householder and FirstEnergy look pretty bad.

Householder is accused of using about $500,000 from the dark money groups to pay off credit card debt, settle a lawsuit, and repair a Florida home. Meanwhile, FirstEnergy was losing so much money on its nuclear and coal plants that in 2016 it started the process that would send the subsidiary that owned them into bankruptcy.

But even as the company and Householder were swimming in red ink, he and the company’s CEO flew to Washington, D.C., on private jets in January 2017 for three days of dinners and drinks at some of the city’s swankiest bars and restaurants, Wetzel said. 

Within two weeks, FirstEnergy money was flowing into Householder-controlled dark-money accounts. In November of 2018, enough Householder-friendly Republicans were elected — many with the help of money from those accounts — to make him speaker the following January. Less than six months later, on May 28, 2019, the House passed its first version of the billion-dollar bailout, House Bill 6. The body passed a final version on July 23, 2019 and Gov. Mike DeWine signed it the same day.

When former U.S. Attorney David M. DeVillers announced Householder’s arrest almost exactly a year later, he called the scheme with FirstEnergy “likely the largest bribery and money-laundering scheme ever in the state of Ohio.”

But did Householder undertake an official act in exchange for money corruptly received from FirstEnergy and other Ohio utilities? The answer might not be as straightforward as you think.

For their part, Householder’s attorneys are arguing that their client was merely raising money like any effective politician would and that he only wanted to subsidize the power plants to save Ohio jobs and the tax bases of school districts.

In addition, the Supreme Court in 2016 threw out the conviction of former Virginia Gov. Bob McDonnell even though he and his wife took more than $170,000 worth of loans and gifts from a businessman in exchange for hosting him at functions, recommending his product to state agencies, and trying to persuade state universities to study it.

At issue was whether any of those were “official acts.”

In that case, Jonnie Williams, CEO of Star Scientific, supported the Virginia Republican’s successful 2009 campaign. Once in office, the gifts really started to flow — including $20,000 worth of designer clothing for McDonnell’s wife, Maureen McDonnell, and a Rolex watch that Maureen gave Bob for Christmas.

Williams was peddling a compound found in tobacco as a nutritional supplement called Anatabloc. In 2011, the McDonnells hosted an event at the Governor’s Mansion that Williams testified was intended to launch the product. He wanted scientists at the state’s universities to research it, but neither he nor the McDonnells could interest them in the supplement.

The governor also told the state secretary of administration and the director of the Virginia Department of Human Resources that it would be a good idea for all state employees to take Anatabloc like he was. The officials apparently didn’t take the hint. 

Investigators caught wind of the McDonnells’ arrangement with Williams and charged them with numerous crimes related to bribery.

In 2014, they were convicted in federal court and Bob and Maureen were sentenced to two and one year in prison, respectively. They appealed, but the 4th U.S. Circuit Court of Appeals in Richmond upheld the conviction.

However, when the case made it north to the U.S. Supreme Court, in Washington, D.C., it was overturned. Unanimously.

Chief Justice John Roberts, the author of the ruling, said that the court took up the case expressly “to clarify the meaning of ‘official act.’” 

In his trial, “Governor McDonnell had requested the court to further instruct the jury that the ‘fact that an activity is a routine activity, or a ‘settled practice,’ of an office-holder does not alone make it an ‘official act,’ and that ‘merely arranging a meeting, attending an event, hosting a reception, or making a speech are not, standing alone, ‘official acts,’ even if they are settled practices of the official,’ because they ‘are not decisions on matters pending before the government.’” Roberts wrote.

Instead, McDonnell’s lawyers argued, an official act must be intended to “influence a specific official decision the government actually makes — such as awarding a contract, hiring a government employee, issuing a license, passing a law, or implementing a regulation.”

In overturning the convictions, the high court agreed, ruling that the McDonnells could still be prosecuted, but the “Government must identify a ‘question, matter, cause, suit, proceeding or controversy’ that ‘may at any time be pending’ or ‘may by law be brought’ before a public official. Second, the Government must prove that the public official made a decision or took an action ‘on’ that question, matter, cause, suit, proceeding, or controversy, or agreed to do so.”

How much comfort Householder should take from the ruling is uncertain, however. Roberts ended the ruling with what seems to be a warning to politicians thinking of doing shady stuff.

“There is no doubt that this case is distasteful; it may be worse than that,” he wrote. “But our concern is not with tawdry tales of Ferraris, Rolexes, and ball gowns. It is instead with the broader legal implications of the Government’s boundless interpretation of the federal bribery statute. A more limited interpretation of the term ‘official act’ leaves ample room for prosecuting corruption, while comporting with the text of the statute and the precedent of this Court.”