Tag: U.S. Attorney Kenneth Parker

  • Multiple signs that federal corruption investigation in Columbus heating up — again

    Multiple signs that federal corruption investigation in Columbus heating up — again

    Getty Images

    BY: Ohio Capital Journal

    After two former Republican officials in June were sentenced for their roles in a massive racketeering conspiracy, U.S. Attorney Kenneth Parker said the investigation was continuing. At least two signs emerged last week that the proceedings might be intensifying.

    Former Ohio House Speaker Larry Householder was sentenced to 20 years in federal prison on June 29 and former state GOP Chairman Matt Borges was sentenced to five years a day later. Both played roles in a scandal in which Akron-based FirstEnergy and other utilities paid more than $61 million to pass a $1.3 billion ratepayer bailout that was mostly intended for a subsidiary that FirstEnergy was spinning off that owned two Northern Ohio nuclear plants.

    In addition to Householder and Borges, two others who were arrested in July 2020 have pleaded guilty and a third died by suicide.

    But on March 10, just after a jury convicted Householder and Borges, a reporter asked Parker an obvious question: What about the people who paid the bribes? Would they be charged? Parker would only say that the investigation was continuing.

    Attorneys for the men who were FirstEnergy’s top executives at the time of the conspiracy — former CEO Chuck Jones and former Vice President Michael Dowling — have already said in court filings that they believe federal investigators are looking at their clients.

    This month brought two more pieces of evidence that federal investigators are considering further prosecutions in the bribery and money laundering scandal.

    On Aug. 4, Hilary M. Williams, who is representing FirstEnergy, submitted a filing in a massive class-action case against the company over the bailout scandal. She informed the scores of lawyers for the pension and investment funds suing the company that they’re not the only ones who want to see the emails and text messages the FirstEnergy executives sent as the bribery scheme was taking place.

    “Counsel… we confirmed this morning that we may disclose to the parties that certain governmental authorities have requested the production of the entire contents of iPad and iPhone devices used by Mr. Jones or Mr. Dowling from January 1, 2016 through December 31, 2020,” Williams wrote. “In keeping with the protocol in this matter, those documents will be produced to all parties, and we expect to do so at approximately the same time that production is made to the requesting governmental authorities.”

    She added. “Mr. Dowling and Mr. Jones used more than a dozen devices during the relevant time period, and processing and reviewing the contents of those devices requires substantial processing time and then time to review for confidentiality and privilege. We are working to complete the review as quickly as possible, and expect to make these productions on or about September 15, 2023.”

    A spokeswoman for the U.S. attorney’s office didn’t comment on whether the “governmental authorities” Williams referred to worked for Parker, whose office prosecuted Householder and Borges.

    However, Parker last week sent a letter to the Public Utility Commission of Ohio asking the regulator to further postpone its investigation into the racketeering scandal.

    “The PUCO proceedings involve issues related to the U.S. Department of Justice of the United States’ investigation, and the United States believes that continued discovery in the PUCO proceedings may directly interfere with or impede the United States’ ongoing investigation,” the letter said. “For that reason, the United States respectfully requests that PUCO stay the PUCO proceedings for a period of six months from the date of this letter. The United States reserves the right to request that the stay be extended beyond this time.”

    Among those the feds may be investigating are Jones, Dowling and Sam Randazzo, whom Gov. Mike DeWine nominated to chair the PUCO in early 2019.

    In a deferred prosecution agreement, FirstEnergy said it paid Randazzo a $4.3 million bribe just before his nomination in exchange for favors the ostensible regulator did for the company. Randazzo denies wrongdoing, but in the Householder trial, witnesses testified that Randazzo played a key role in drafting the corrupt bailout legislation.

    Plaintiffs in the class-action suit earlier this month filed texts and emails between Jones, Dowling and Randazzo. They indicate that the three met in Randazzo’s Columbus condo in December 2018 and arranged to pay the soon-to-be regulator $4.3 million and made it clear that they expected something in return. They also appear to indicate that in addition to his work on the the bailout, Randazzo helped exempt FirstEnergy from a 2024 rate review it had been required to undergo.

    The class-action plaintiffs are accusing FirstEnergy of violating securities law by concealing its illegal conduct from investors. Last week, they filed a transcript of an earnings call from July 23, 2020 — days after Householder, Borges and three others were arrested in the racketeering conspiracy. In it, Jones appeared to mislead analysts about his and his company’s role in it.

    “I believe that FirstEnergy acted properly in this matter, and we intend to cooperate fully with the investigation to, among other things, ensure our company and our role in supporting House Bill 6 is understood as accurately as possible,” said Jones, who would be fired months later. “In the meantime, we wanted to share our preliminary perspective on this issue and reinforce the values with which we operate our company.”

    Jones also claimed that he and his subordinates followed “the highest standards of conduct.”

    “This is a serious and disturbing situation,” he said. “Ethical behavior and upholding the highest standards of conduct are foundational values for the entire FirstEnergy family and me personally. These high standards have fostered the trust of our employees, our customers and the financial community. We strive to apply these standards in all business dealings including our participation in the political process.”

    Jones sat for a sworn deposition in the class-action case in July. Last week, U.S. Magistrate Judge Kimberly Jolson ordered Dowling to sit for one in October.


    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.

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  • 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