Ohio House Speaker Larry Householder arrested in $60 million bribery case

CINCINNATI – Federal officials arrested Ohio House Speaker Larry Householder and four others Tuesday as part of a $60 million racketeering and bribery investigation that prosecutors describe as one of the largest public corruption cases in Ohio history.

All of the charges are tied to what federal prosecutors describe as a criminal enterprise dedicated to securing a bailout for two nuclear power plants in northern Ohio, which is expected to cost the state's utility ratepayers $1 billion.

A criminal complaint unsealed Tuesday describes the effort as "Householder's Enterprise" and states that he and his associates sought to expand their political power, enrich themselves and conceal their criminal conspiracy.

"This is likely the largest bribery, money laundering scheme ever perpetrated against the people of the state of Ohio," said U.S. Attorney David DeVillers, whose office will lead the prosecution of the case. "This was bribery, plain and simple. This was a quid pro quo. This was pay to play."

Also charged Tuesday were four lobbyists and Republican operatives:

• Neil Clark, founder of Grant Street Consultants and once called by USA Today “one of the best connected lobbyists in Columbus";

• Matthew Borges, former Ohio Republican Party chair and consultant;

• Juan Cespedes, co-founder of The Oxley Group in Columbus;

• Jeffrey Longstreth, adviser to Householder;

• Generation Now, a nonprofit that federal prosecutors link to Longstreth and Householder, also faces racketeering charges.

DeVillers said the arrests Tuesday will not end the investigation and that agents will continue to interview potential witnesses and execute search warrants in the coming days and weeks. "We're not done with this case," he said. "There are a lot of federal agents knocking on a lot of doors."

The criminal complaint accuses Householder of creating an enterprise to collect large sums of money for him and others involved in the conspiracy.

"The millions paid into the entity were akin to bags of cash," the complaint states. "Unlike campaign or PAC contributions, they were not regulated, not reported, not subject to public scrutiny — and the enterprise freely spent the bribe payments to further the enterprise’s political interests and to enrich themselves.”

The arrests are the result of a nearly two-year FBI investigation that included undercover federal agents who met with Householder and Clark, as well as surveillance that allowed investigators to obtain text messages, emails and other communications between those who have been charged.

Householder and the other four men made their initial appearance electronically in federal court early Tuesday afternoon. They were released from custody afterward, with travel restrictions and prohibitions on contact with others involved in the case.

Agents made the arrests of Householder, Borges and Clark on Tuesday morning at their residences. It is unclear where the arrests of Longstreth and Cespedes took place.

According to the criminal complaint, the arrests are the result of a nearly two-year investigation into bribes and money laundering by the FBI.

Householder oversaw the controversial, Republican-led bailout of the two nuclear plants, owned by FirstEnergy Solutions, of Akron. House Bill 6, signed by Gov. Mike DeWine in June, authorized using ratepayer fees for the $1 billion bailout.

The fight to approve the money was long and costly, extending even after the bill was signed into law. An effort to overturn the bailout ultimately failed after it met fierce resistance from well-funded competition. One group was Generation Now, a 501(c)(4) "dark money" operation that was not required to disclose donors under federal law. The group hired blockers to stall signature collectors working for those opposed to the bailout.

The second group, Ohioans for Energy Security, paid for millions of dollars in advertisements, including ones that warned Ohioans that the Chinese would take over Ohio’s power grid if voters repealed the bailout.

FirstEnergy, which spun off FirstEnergy Solutions in bankruptcy proceedings, gave more than $1.1 million to Ohio politicians, including Householder, between 2017 and 2019. FirstEnergy Solutions was later renamed Energy Harbor Corp.

Cespedes was listed by the state as a lobbyist last year for Energy Harbor and Borges works for the Columbus-based firm 17 Consulting Group, which contributed $90,000 to a pro-nuclear energy group called Ohio Clean Energy Jobs Alliance, which has ties to FirstEnergy Solutions.

Disclosure: 17 Consulting advises The Enquirer on legislative activity affecting the media industry.

The documents unsealed Tuesday afternoon did not name the companies involved, though they noted that “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.”

The investigation included dinners and meetings between undercover federal agents and Householder and Clark, during which, prosecutors say, the men made incriminating statements about illegal activity and bribes.

Generation Now was incorporated by Longstreth in early 2017, but federal officials say they have a recording that shows it secretly was controlled by Householder. Federal officials have a recorded conversation of Clark saying “Generation Now is the Speaker’s….”

The 82-page criminal complaint alleges Generation Now received about $60 million in exchange for Householder and other’s help in the passage of House Bill 6 and the blocking of a ballot initiative to overturn the legislation.

Householder played a pivotal role last year in the passage of the controversial bill – now in law – to give FirstEnergy Solutions, of Akron, a $1 billion ratepayer bailout of its pair of nuclear power plants along Lake Erie.

The activities took place from March 2017 through earlier this year, federal officials said, with quarterly payments of $250,000 from related energy companies deposited into the bank account of Generation Now.

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.

More than $1 million was spent on negative ads against those candidates’ opponents, with additional funds paying for Householder’s campaign staff, according to documents.

Most of the backed candidates won in 2018, and all supported Householder’s election as Speaker, investigators said. Additionally, Householder received $400,000-plus in personal benefits, including funds to settle a personal lawsuit, to pay off credit card debt and for costs associated with his home in Florida, according to documents.

Larry Householder: Top Ohio Republican has made a career of thriving in chaos

Other funds were used to pay for insider information about a ballot initiative to stop House Bill 6.

Householder is one of the biggest names in Ohio politics and has been a major player for years in the state's Republican Party. He's known as an aggressive fundraiser who doesn't shy away from hardball tactics on the campaign trail or in the statehouse.

He first served as Ohio's House speaker from 2001 to 2004. The FBI launched an investigation in 2004 into allegations that Householder and his aides took kickbacks from vendors and traded legislation for campaign contributions. The investigation ended in 2006 with no charges filed.

A term-limited Householder left Columbus in 2004 during the investigation.

After returning to the House a few years ago, Householder staged a comeback, with help from Democrats, when he took advantage of GOP infighting and returned to the speaker's post.

"When everyone else is in complete disarray is usually when I'm at my best," Householder told The Enquirer in 2019.

Marc Kovac, Randy Ludlow and Lucas Sullivan contributed to this report

This article originally appeared on Cincinnati Enquirer: Ohio House Speaker Larry Householder arrested in bribery case