Nuclear Power Plant Bailout At The Center Of Federal Corruption Case
Ohio House Speaker Larry Householder (R-Glenford) has been arrested in connection to a $61 million public corruption racketeering conspiracy case. He and four other defendants are alleged to have been critical players in the push to pass a controversial piece of legislation that upended the state's energy policy.
U.S. Attorney David DeVillers says Householder and the operatives who worked with him, including former Ohio Republican Party Chair Matt Borges, were part of a major scheme of corruption.
DeVillers refers to it as "what is likely the largest bribery, money laundering scheme ever perpetrated against the people of the state of Ohio."
In addition to Householder and Borges, Columbus lobbyists Juan Cespedes and Neil Clark were arrested. Jeff Longstreth, Householder’s campaign and political strategist, was also arrested.
DeVillers says this team of people used money from a yet-to-be-named energy company to do three things.
"One: to line the pockets of the defendants. Two: to build a power base for Larry Householder. And three: to further this conspiracy, that is to further the affairs of this enterprise," DeVillers says.
According to the district attorney's office, half a million dollars went to Householder's personal benefit, including money to pay off a lawsuit, legal fees, and a house in Florida.
DeVillers, who was appointed by President Donald Trump, says Team Householder used millions of dollars to elect a slate of candidates and attack their rivals.
The FBI’s Special Agent in Charge of the investigation, Chris Hoffman, says the charges against Householder break new ground.
"This is the first time the racketeering charge has been used on a public official in the Southern District of Ohio," says Hoffman.
DeVillers says the money was funneled through Generation Now, a corporate entity Longstreth registered as a 501 (c)(4) social welfare organization. It’s also named in the suit.
"Make no mistake. These allegations were bribery, pure and simple. This was a quid pro quo. This was pay to play," says DeVillers.
Ohio House Speaker Larry Householder walked out of federal court in Columbus and his vehicle was blocked by Black Lives Matter demonstrations to the chants of “We want answers” pic.twitter.com/xoSID5d3g5— Andy Chow (@andy_chow) July 21, 2020
He says this investigation is continuing and won’t rule out future arrests in connection with this case. The FBI is encouraging anyone with any information to contact them. But DeVillers says there is no evidence Gov. Mike DeWine (R-Ohio) is involved in this case.
In a written statement, DeWine called for Householder to resign, adding that it's a "sad day" for Ohio.
"I am deeply concerned about the allegations of wrongdoing in the criminal complaint issued today by the U.S. Attorney’s Office. Every American has the presumption of innocence until proven guilty. Because of the nature of these charges, it will be impossible for Speaker Householder to effectively lead the Ohio House of Representatives; therefore, I am calling on Speaker Householder to resign immediately," DeWine wrote.
Also calling for Householder to step down are, Lt. Gov Jon Husted, Attorney General Dave Yost and Secretary of State Frank LaRose, all Republicans. Also demanding Householder's resignation is House Minority Leader Emilia Sykes (D-Akron). Sykes led a coalition of Democrats who elected Householder Speaker last year over incumbent House Speaker Ryan Smith (R-Bidwell).
Watch: U.S. Attorney David DeVillers holds a press conference to discuss corruption case.
House Bill 6 is the sweeping energy bill that not only created a ten-year, $1.5 billion subsidy for Ohio’s two nuclear power plants by increasing everyone’s electric bills. It also created subsidies for struggling coal plants, rolled back pro-renewable energy policies, and eliminated energy efficiency standards.
"We are not commenting on the wisdom of House Bill 6," DeVillers says. "It's clear from the affidavit that House Bill 6 was passed with millions of dollars, tens of millions dollars that were hidden from the people of the state of Ohio."
But the bill was hotly contested in 2019.
Two of the defendants, Borges and Cespedes, were both registered lobbyists for FirstEnergy Solutions, the energy generation company that owns Ohio's two nuclear power plants, Davis-Besse (Oak Harbor) and Perry (Perry). FirstEnergy Solutions was renamed Energy Harbor when it came out of bankruptcy earlier this year splitting from FirstEnergy Corporation.
Cespedes pushed for the bill, while Borges' consulting company helped fight back against a petition to repeal the law after it was passed.
Neil Clark, another defendant in the case, is a longtime Columbus lobbyist who's gained a high profile fighting for legislation that benefits payday lenders and for the now-closed online charter school ECOT.
But Clark did not have a strong public presence at the Statehouse on HB6.
Environmental groups, free market conservative advocates, and natural gas companies advocated against the bill. Some of those opponents are now calling on lawmakers to return to the Statehouse to repeal the law.