GOP Lawmakers Apprehended by FBI for $60 Million Racketeering Scheme

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Posted: Jul 22, 2020 1:00 PM
GOP Lawmakers Apprehended by FBI for $60 Million Racketeering Scheme

Source: (AP Photo/John Minchillo, File)

The FBI arrested Ohio State Representative Larry Householder (R) and four others on racketeering charges for extorting $60 million from First Energy Corp. in exchange for support in the Ohio legislature. FBI arrived at Householder’s farm in Glenford on Tuesday morning assisted by local police forces.

FBI attorney David DeVillers called it “the largest bribery, money-laundering scheme ever perpetrated against the people of Ohio.”

Individuals implicated in the conspiracy include Householder adviser Jeffrey Longstreth and lobbyists Neil Clark, Matthew Borges and Juan Cespedes. 

An 82-age affidavit filed by the FBI describes a three-year plot to instate Householder as speaker of the Ohio House, ostensibly to rescue First Energy from bankruptcy.

“Sadly, today’s Criminal Complaint is a reminder that some enter public life seeking to accumulate personal power and to enrich themselves,” Ohio Secretary of State Frank LaRose said in a press statement.

Two nuclear plants belonging to First Energy’s former subsidiary, Energy Harbor, have progressively underperformed relative to the cheaper and more abundant natural gas. In spite of opposition from both natural gas companies and environmental activists, Householder expedited previously-stalled legislation, House Bill 6, to subsidize the nuclear plants with $150 billion a year through 2027.

The bill became “one of the most expensive and divisive campaigns in Ohio history,” according to a federal judge. Consumer advocates also resisted the bill, as it would incur an additional 85-cent monthly increase in utility prices for the next seven years. 

According to the FBI complaint, Householder approached First Energy seeking a “quid pro quo” deal. 

“The enterprise went looking for someone to bribe them,” said DeVillers.

FirstEnergy “got $1.3 billion in subsidies, free payments ... so what do they care about putting $20 million a year for this thing, they don’t give a sh*t,” Clark said in a recorded conversation one year ago.

First Energy Corp. committed $25,000 to Friends of Larry Householder during the 2018 election cycle. The Householder campaign spent millions to suppress a ballot initiative that would avail voters of veto privileges.

The FBI has evidence that Generation Now, an alleged social welfare entity incorporated by First Energy, obtained $60 million from a single donor over the course of three years. Generation Now holds 501c(4) nonprofit status, meaning it is not legally required to disclose donor information. Suspected of functioning as a dark money holding group for Householder and First Energy, reports indicate that Generation Now contributed heavily toward the bailout campaign.

“Householder-backed candidates that benefited from Company A money received by Generation Now ... helped elect Householder as the Ohio Speaker of the House in January 2019. And Householder fulfilled his end of the corrupt bargain shortly thereafter,” the investigation alleges. “Three months into his term as Speaker, HB 6 was introduced to save from closure Company A's two failing nuclear power plants.”

Devillers explained to reporters that, while the scope of the complaint does not permit him to name the company, “you know who the company is.”

Defendants appeared in court later on Tuesday. The judge released Householder, scheduling the next hearing for August 6

When asked by a reporter if he would resign, Householder answered in the negative.

Governor Mark Dewin (R) called on Householder to resign. 

Devillers declined to comment on the strength of the case but noted that the investigation now has over status. “We are not done with this case,” he said.

Householder has faced federal charges before. At the end of his first stint in state office in 2004, the government investigated him and other top officials for money laundering but dropped the case.