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Tag: U.S. District Judge Timothy Black

  • 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.

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  • Angling for appeal? Householder attorneys go after judge in corruption trial

    Angling for appeal? Householder attorneys go after judge in corruption 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 — There has been speculation since the start of a massive public corruption trial that lawyers for the main defendant — former Ohio House Speaker Larry Householder — were banking on getting any conviction tossed out on appeal.

    There might have been evidence of that on Tuesday when one of the attorneys took the rare step of accusing the judge in the case of bias against his client. The attorney also suggested that the judge harbored a political grudge against Householder going back more than 22 years.

    Testimony resumed Tuesday in the case after repeated delays — first because of weather and then because a juror tested positive for covid. 

    When it did, federal prosecutors continued presenting extensive evidence to support allegations that Ohio utilities paid $61 million into Householder-controlled 501(c)(4) dark money groups and Householder used the money to elect friendly Republicans to make himself speaker in early 2019. Householder is accused of pushing through a $1.3 billion ratepayer bailout that primarily benefited his primary benefactor — Akron-based FirstEnergy — in return.

    Prosecutors have said it was likely the largest bribery and money-laundering scheme in Ohio history.

    Federal prosecutors are known to usually file charges only when they’re almost certain to get a conviction. That’s perhaps even more true when the case is against an elected official.

    And over the course of testimony so far, Assistant U.S. Attorney Emily Glatfelter has introduced reams of evidence in the form of emails and text messages, as well as transcripts of wiretaps and witness testimony — including that of co-defendants who have pleaded guilty.

    Householder’s attorneys have argued that their client raising money and electing candidates who would support his speaker’s bid was just politics as usual. They also argue that Householder only wanted to prop up failing nuclear and coal plants because he wanted to save jobs and protect the tax bases of the communities where they were located.

    Householder also is alleged to have pocketed $500,000 in utility money himself, but his lawyers say those were loans he fully intended to repay.

    However, the attorneys’ conduct on Tuesday might indicate that they’re looking past the jury trial.

    Before the jury entered the courtroom, Householder attorney Mark Marein rose to complain to U.S. District Judge Timothy Black  — about the conduct of Black himself.

    “We all collectively believe that the court holds animosity toward us,” Marein said, referring to Householder’s legal team. He added, “I question whether (Judge Black) should be presiding over this.”

    Black scolded Householder’s lawyers last week for muttering and making faces during Glatfelter’s opening statement. Among his criticisms, Black called the conduct “bush league.”

    The judge also dismissed a juror who refused to wear a mask in court. That prompted speculation that Householder’s lawyers were displeased because such a juror might be more sympathetic to their client, a pro-Trump Republican.

    But Marein gave a wholly different reason for suspecting that the judge was biased against Householder. He said that Black might be holding a grudge from 2000, when Black ran for the Ohio Supreme Court and Householder worked against the candidacy. 

    Both Marein and Black acknowledged that Marein was making the statements simply to get them into the record — presumably so they would be there in the event of an appeal. 

    There is some precedent for overturning public corruption convictions over complaints of judicial bias and prosecutorial misconduct. 

    In 2009, the conviction of former Alaska Senator Ted Stevens was thrown out after the FBI was found to have withheld exculpatory evidence and other misconduct. And in 2016, the U.S. Supreme Court unanimously overturned the conviction of former Virginia Gov. Bob McDonnell, ruling that the trial court judge allowed prosecutors to use an overly broad definition of bribery.

    But accusing a judge of bias in the middle of a trial has risks. Lawyers have said that if one genuinely believes a judge is biased, accusing that person of it in open court could simply make things worse. And in some instances, such accusations have resulted in professional sanctions against the lawyers making them.

    There were a few other developments of interest Tuesday:

    • Prosecutors played a recording of a wiretapped phone conversation between Householder and political operative Neil Clark in December 2017. Clark was also charged in the corruption scandal, but later died by suicide. In a laughing, profanity-strewn passage, the two talked about how Republicans legislators in 2010 drew a portion of Columbus into former U.S. Rep. Pat Tiberi’s district. “Tiberi wanted a safer district,” Householder said, later adding, “He doesn’t like me because he thinks I f*****d with him.” The maps drawn in 2011 were said to have some of the most gerrymandered in the country. Last year, a Republican-controlled panel repeatedly refused orders from the state Supreme Court to draw them more evenly.
    • Householder allies and FirstEnergy officials in August 2017 discussed a third tranche of $250,000 from the company to a Householder-controlled dark-money group at the posh Greenbrier resort in West Virginia, where that state’s Coal Association was holding its annual meeting. The money flowed soon thereafter. That meeting follows a round of swanky dinners in Washington, D.C., involving Householder and FirstEnergy officials the previous January during former President Donald Trump’s inauguration. Two dark-money groups were set up within weeks and one quickly received the first $250,000 from FirstEnergy, even though was hemorrhaging money.

    The trial resumes Wednesday. It’s expected to last into March.

  • Fate of former Ohio House speaker could hinge on whether he took an “official act”

    Fate of former Ohio House speaker could hinge on whether he took an “official act”

    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.”

  • Judge scolds former GOP chairman, forbids him from intimidating whistleblower

    Judge scolds former GOP chairman, forbids him from intimidating whistleblower

    Photo by Getty Images.

    BY: JAKE ZUCKERMAN Ohio Capital Journal

    A federal judge lambasted a suspect in a criminal public corruption case for posting a FBI informant’s social security number and address on the internet.

    U.S. District Judge Timothy Black said he finds it “entirely incredible” that lobbyist and former GOP Chairman Matt Borges accidentally posted the information of the whistleblower online, as Borges claimed.

    “Indeed, page 3 of the file alone includes [the informant’s] name, address, phone number, spouse’s name, spouse’s phone number, and [the informant’s] social security number, all of which are listed in large, bold font, at the very top of the page,” Black said, using the visual emphasis in his court order.

    “It is virtually impossible for anyone to scroll through the file and not see that it contains unredacted personal identifiers.”

    Federal prosecutors have accused Borges of participating in a scheme alongside former GOP House Speaker Larry Householder and three others to take $60 million from FirstEnergy Corp. and enrich themselves while ensuring passage of favorable legislation for the company.

    FirstEnergy has since admitted to giving $60 million to a nonprofit secretly controlled by Householder in exchange for his help passing House Bill 6 in 2019. Borges allegedly used $15,000 of the money to bribe a political operative for inside information about a campaign to overturn the recently-passed legislation via a ballot referendum.

    Borges worked as a lobbyist for a FirstEnergy subsidiary at the time, with deep Republican connections from his time running the state party.

    Prosecutors asked Black earlier this week to modify the conditions of Borges’ bond. They said an FBI agent noticed in June that Borges posted the informant’s employment file online, including his tax documents and photocopies of his social security card and driver’s license. They requested the judge block Borges from posting the information in a continued effort to intimidate a witness.

    In charging documents, the informant was not personally identified. However, consultant Tyler Fehrman has since acknowledged he’s the unnamed whistleblower in media reports.

    Prosecutors called Borges’ actions an “attempt to intimidate and retaliate against” the informant. They requested Black forbid him from posting Fehrman’s sensitive information online.

    Attorneys for Borges said he obtained the employment file via public records request and sharing the personal identifying information online was “inadvertent.”

    Black sided with prosecutors. Besides the financial risks of posting a social security number online, he said, “financial harm is by no means the most severe consequence that could result from publicly exposing and disparaging a confidential government source.”

    According to the prosecution, Borges told Fehrman that if he provided inside information from the campaign, Borges would give him a job or money to pay off his debts. Fehrman —who managed field workers soliciting signatures to put the repeal on the ballot — covertly recorded the conversation.

    “Borges further indicated that others are getting ‘fat’ off the HB 6 issue, so they might as well benefit, too,” prosecutors alleged in court filings.

     Screenshot of a text prosecutors say they obtained from Matt Borges.

    Fehrman declined the bribe, according to prosecutors. Borges, in a text message, responses with an order to “No matter what — don’t ever tell anyone about our conversation from earlier.” At the behest of FBI officers, Fehrman went on to accept the bribes and provide information to Borges, who allegedly shared information with others involved in protecting the newly passed HB 6.

    The file containing Fehrman’s information appeared on a website Borges created to raise funds for his legal defense. Borges, on the site, accuses the prosecutors of running a “politically motivated” prosecution and claims he told the prosecutors to “go f*ck themselves” when offered a plea deal.