Ohio House Speaker Larry Householder and four others have been arrested Tuesday in connection to a $60million bribe to pass and uphold a $1billion nuclear plant bailout plan.
Householder, 61, is a powerful figure in Ohio politics who has held speakership twice.
He is charged with conspiracy to participate in a racketeering scheme – a charge that carries up to 20 years in prison and up to a $250,000 fine.
The others arrested in the probe were Householder adviser Jeffrey Longstreth, 44; longtime Statehouse lobbyist Neil Clark, 67; former Ohio Republican Party chairman and consultant Matthew Borges, 48; and Juan Cespedes, the co-founder of The Oxley Group in Columbus, 40.
Each are charged with conspiracy to participate in a racketeering scheme.
U.S. Attorney David DeVillers said the case is ‘likely the largest bribery, money laundering scheme ever perpetrated against the people of Ohio’ during a press conference Tuesday.
The arrests were connected to passing House Bill 6, the FirstEnergy nuclear bailout bill, that was passed and signed last year by Gov. Mike DeWine.
The controversial House Bill 6 lowered Ohio’s renewable energy standards and provided a bailout to two financially struggling nuclear power plants.
Householder and the other four men made their initial appearance virtually in federal court early Tuesday afternoon.
Householder was allowed to be released on bond with conditions including no firearms, no contact with others listed in criminal complaint and some travel restrictions. He must surrender his firearms by 5pm tomorrow.
The other lobbyists arrested face similar conditions for release.
Householder has a preliminary hearing scheduled for August 6.
The arrests come after a nearly two-year investigation into bribes and money laundering by the FBI, according to the Columbus Dispatch.
‘These allegations are bribery pure and simple,’ DeVillers said in the press conference. ‘This was quid pro quo. This was pay to play.’
The criminal complaint accuses Householder of creating an enterprise called Generation Now to collect large sums of money for him and others involved in the conspiracy.
Energy company funds were funneled through Generation Now and proceeds were used to back the campaigns of legislative candidates who were a part of ‘Team Householder’. All those candidates voted for Householder to re-win the Speaker seat in 2019.
Generation Now was incorporated by Longstreth in early 2017 but federal officials say they have a recording that proves it was secretly controlled by Householder. They have a recorded conversation of Clark saying, ‘Generation Now is the Speaker’s…’
Prosecutors say Generation Now, a 501c4 was created ‘completely and utterly to hide where the donor came from.’
A 501c4 is an organization that’s supposed to be created for social welfare and does not have to release donor information as PACs – political action committees – must.
The 82-page criminal complaint, released Tuesday, did not name the companies involved in financing the conspiracy but DeVillers said ‘everybody knows who Company A is’.
‘Company A entities paid Householder’s enterprise $60,886,835.86 in secret payments over the approximately three-year period in exchange for the billion-dollar-bailout. The enterprise concealed the payments … to receive the bribe money and then transferring the payments internally to a web of related entities and accounts,’ it says.
Investigators allege the nonprofit used energy company money to back the campaigns of 21 different state candidates in the 2018 primary and general elections, including Householder.
Then more than $1million was spend on negative ads against those candidates’ opponents, with more funds going to Householder’s campaign staff.
In return for winning the Speaker seat he allegedly assured House Bill 6 would pass and maintain it after a ballot initiative was started to overturn the bill.
In the conspiracy Householder allegedly pocketed about half a million dollars from Generation Now, including funds to settle a personal lawsuit, $100,000 for a house in Florida and money to pay off thousands in credit card debt.
Householder was a big player in overseeing the controversial, Republican-led bailout of the two nuclear plants which are owned by FirstEnergy Solutions of Akron.
The bill is expected to cost the state’s utility ratepayers $1billion.
The complaint alleges Generation Now hired and bribed people to stop the ballot initiative to overturn House Bill 6 by stalling signature collectors and bribing ballot and signature services to do nothing in the vote.
In the FBI probe there were dinners and meetings between undercover federal agents and Householder and Clark during which the men made incriminating statements about illegal activity and bribes, a federal investigator involved in the arrests said.
FBI agents descended upon Householder’s farm on Tuesday morning in Glenford.
Agents made the arrests of Householder, Borges and Clark this morning at their residences. It is unclear where Longstreth and Cespedes were arrested.
DeVillers says the case is still active and agents will continue to interview potential witnesses and execute search warrants in the coming days and weeks.
‘We’re not done with this case. There are a lot of federal agents knocking on a lot of doors,’ he said.
This isn’t Householder’s first run in with financial corruption.
In 2004 Householder and associates were under investigation for alleged money laundering and irregular campaign practices but the case was closed in 2006 and charges were never filed.
Householder, a Republican, is in his second stint as House speaker following his tenure in the same position from 2001 to 2004.
The veteran lawmaker left politics because of term limits.
At the time he left office, he and several top advisers were under federal investigation for alleged money laundering and irregular campaign practices in 2004. The government closed the case without filing charges in 2006.
After returning to the Ohio House in 2016, Householder won a contentious fight to become House speaker in 2019 with the help of House Democrats.
The speakership is one of the three most powerful politicians in Ohio that wields not only tremendous influence in how the state spends more than $140billion, as per the Dayton Daily News. Speakers also have the power to halt any piece of legislation.
This is the first time racketeering charges have been used on a public official in the Southern District of Ohio.
Officials say there’s no evidence that the scheme touches Gov. Mike DeWine’s office.