Is it normal to have a 501(c)(4) controlled by a politician which transacts no business other than cashing $250,000 quarterly checks from an energy company looking for a billion-dollar government bailout? Asking for Ohio House Speaker Larry Householder, who was arrested this morning and charged in massive, $61 million racketeering, bribery, and public corruption case.
And if you’re counting on your fingers to figure out how many quarters it would take to suck up $61 million in quarter million dollar tranches, he had a lot of help. Rest assured that a whole boatload of Buckeyes are on the phone with their lawyers right this very minute.
The case arises out of an Ohio law passed last year which zeroed out subsidies for wind and solar while bailing out two coal plants belonging to the Ohio Valley Electric Corporation and a nuclear power facility owned by FirstEnergy Solutions. Householder, who had served as his chamber’s speaker between 2001 and 2004, had recently won his old seat back and wanted help returning to the speakership. And FirstEnergy wanted to help him do it, according to the criminal complaint.
Following his January 2017 trip on Company A’s (i.e. FirstEnergy’s) private jet, in March 2017, Householder began receiving quarterly $250,000 payments from Company A into a bank account in the name of a 501(c)(4) entity secretly controlled by Householder called Generation Now.
Nothing to see here!
Arrested along with Householder were his longtime aide, Jeff Longstreth, who helped him set up Generation Now, former Ohio Republican Party Chair Matt Borges, and FirstEnergy lobbyists Neil Clark and Juan Cespedes. Apparently, they were a chatty bunch.
In 2019, Clark described himself on recorded communications as Householders “hitman” who will do the “dirty shit.” Clark stated, “When Householder’s busy, I get complete say. When we are working on stuff, if he says ‘I’m busy,’ everyone knows, Neil has the final say, not Jeff. Jeff is his implementer.
Testing, testing! Is this thing on? I would like to describe the structure of our criminal enterprise now.
Householder used the cash in Generation Now to build his political base, doling it out to other Republican candidates and preaching the good word of dirty energy, and in January 2019, he regained the speakership. Three months later, Householder introduced HB6, a $1.3 billion bailout for FirstEnergy, at which point the cash flowing from the company to Generation Now and GOP state reps kicked into overdrive. Between July and October of 2019, FirstEnergy sent $38 million to Generation Now.
According to the U.S. Attorney’s Office for the Southern District of Ohio, “When asked how much money was in Generation Now, Clark said, ‘it’s unlimited.’” Borges referred to it as “Monopoly money.”
Which is a sh*t ton of cash in one state congressman’s little secret account.
Sure, Householder used some of that money to pay his campaign staff, and allegedly pocketed about $400,000 in personal benefits “to settle a personal lawsuit, to pay for costs associated with his residence in Florida, and to pay off thousands of dollars of credit card debt.” Plus he’s alleged to have “paid $15,000 to an individual to provide insider information about the ballot initiative and offered to pay signature collectors for the ballot initiative $2,500 cash and plane fare to stop gathering signatures.” Because Householder provided good service for his clients, and he made sure that a ballot initiative to repeal the bill never saw the light of day.
But that doesn’t add up to anything like $60 million. The complaint details transfers of about $20 million to Householder’s co-conspirators, but unless $40 million of that money is still sitting there in Generation Now’s account, it had to go somewhere.
Which brings us to David DeVillers, the U.S. Attorney for the Southern District of Ohio, who promised in this afternoon’s press conference that “We are not done with this case.”
JUST IN: U.S. Attorney David M. DeVillers announces the arrest of Ohio Speaker of the House Larry Householder “for racketeering in likely the largest bribery, money-laundering scheme against the people of the state of Ohio.”
“This was a quid pro quo, this was pay-to-play” pic.twitter.com/peIQU4YbBl
— Bloomberg QuickTake (@QuickTake) July 21, 2020
DeVillers promised the investigation would broaden now that the indictment has been unsealed and is no longer covert. Which sounds like a full employment plan for white collar criminal lawyers in the great state of Ohio. See, Householder really did protect jobs after all — just maybe not the way he planned to.
US v. Borges (Criminal Complaint, No. 1:20-MJ-00526 (S.D. Ohio Jul 21, 2020))
Elizabeth Dye (@5DollarFeminist) lives in Baltimore where she writes about law and politics.