$ 60 million corruption scandal felt in business and politics a year later | News, Sports, Jobs
COLUMBUS (AP) – The arrests a year ago Wednesday of Ohio House President Larry Householder and four associates in an alleged $ 60 million corruption scheme rocked business and politics across state, and the events of last year suggest that with a federal investigation the tentacles are only growing.
Here’s a look at the situation in what then-US attorney David DeVillers described as the biggest corruption scandal in Ohio history:
Householder, a Republican, has pleaded not guilty and claims his innocence. He was removed as president last year, re-elected in November despite charges of criminal racketeering he faces, and then kicked out of the chamber last month in a landmark vote.
His longtime political adviser Jeff Longstreth, lobbyist Juan Cespedes and Generation Now, a black money group accused of accepting millions in bribes, have pleaded guilty and are awaiting sentencing.
Former Ohio Republican President and lobbyist Matt Borges has pleaded not guilty, admitting in a separate campaign finance investigation that he spent the money but insisted legally. Longtime Statehouse lobbyist Neil Clark died by suicide in Florida in March.
DeVillers, a person appointed by former Republican President Donald Trump, resigned in February to allow the new president to choose a successor. Democratic President Joe Biden has yet to name DeVillers’ permanent replacement.
The legislation at the heart of the scandal, House Bill 6, included a billion dollar bailout for two nuclear power plants operated at the time by a wholly owned subsidiary of FirstEnergy Corp. Bill had partial roots on a FirstEnergy flight provided to Householder and his son for the Trump nomination in January 2017.
Shortly after the trip, $ 1 million from FirstEnergy began to flow to Generation Now, controlled by Householder, in installments of $ 250,000. That money and more were used to elect candidates backed by Householder and allow him to become president, prosecutors say.
The second step was to pass the bill, titled Ohio Clean Air Program, in July 2019. Ohio Governor Mike DeWine signed it within hours. The third step was FirstEnergy spending around $ 38 million to fund a campaign to prevent a repeal referendum from reaching the poll.
State lawmakers have since rolled back the nuclear bailout and another provision of HB 6 guaranteeing the three Ohio utilities of FirstEnergy revenues equal to what they earned in 2018, a year of extreme weather. Majority Republicans have blocked calls to repeal the entire bill, which they said was bulky and contained good energy policy.
FirstEnergy has been subject to a review since the DeVillers announcement. Company officials say FirstEnergy is cooperating with investigations by the Department of Justice, the United States Securities and Exchange Commission, and the Federal Energy Regulatory Commission. Company officials also said FirstEnergy spoke with federal prosecutors about a deferred prosecution agreement.
Six senior executives were fired, including CEO Chuck Jones.
The company faces two rounds of class action lawsuits from shareholders, one seeking a court to force the company’s board of directors to implement reforms. The other round of lawsuits claims the company defrauded investors.
FirstEnergy CEO and Chairman Steven Strah, who succeeded Jones, said the company had made significant reforms over the past year.
In June, officials at Columbus-based power company AEP revealed that U.S. Securities and Exchange Commission enforcement officials had subpoenaed documents relating to grants it received from the United States. energy bill of two aging coal-fired power plants partly owned by the company.
AEP officials initially testified against the bill, but then added their support when the coal-fired power plant subsidy was added to the legislation. The bill requires almost all of the state’s electricity customers to subsidize coal-fired power plants. Previously, only Ohio customers of AEP, Duke and AES paid for the grant, which was $ 114 million last year.
The firing of Jones, who initially denied any wrongdoing by the company, appeared to be linked to a $ 4.3 million payment that FirstEnergy made in January 2019, allegedly to end a consulting contract longtime with someone soon to be named Ohio’s premier utility regulator.
There was no doubt that the regulator was Sam Randazzo, a veteran public services lawyer and lobbyist, whom DeWine appointed chairman of the Ohio Public Services Commission in February 2019.
Randazzo resigned from the commission in November after FBI agents searched his Columbus townhouse on the same day FirstEnergy disclosed the payment. The language in a separate loan document filed by the company that month suggests that Randazzo helped the company after he became president of PUCO.
DeWine appointed former Franklin County Common Pleas Judge Jenifer French, a Republican, to succeed Randazzo as president in March. French is committed to restoring public confidence in the commission through increased transparency.
DeWine, heading for re-election next year, has faced some political setback for ignoring cries of alarm from consumer and environmental advocates and a group of fellow Republicans over the deep ties of Randazzo with FirstEnergy.
The governor defended his decision to appoint the utility law expert.
DeWine reassigned Laurel Dawson, the chief of staff who oversaw Randazzo’s selection process, in a May staff reshuffle described as unrelated. The governor’s main lobbyist, Dan McCarthy, is a former FirstEnergy lobbyist who was chairman of one of the black money groups involved in the alleged bribery scheme. McCarthy said his actions were legal and that he has no indication that he is the target of the investigation.
Still, Ohio Democrats have taken advantage of the ongoing investigation in their efforts to reverse Republican dominance in state politics next year, which is over. The party controls all state offices, both houses of the state legislature and the Ohio Supreme Court, with many of those seats up for grabs.
In May, Democratic state officials Allison Russo and Bride Rose Sweeney reintroduced an anti-corruption bill aimed at shedding light on black money and other political spending in the state.
The following month, Democratic gubernatorial candidate Nan Whaley, mayor of Dayton, unveiled a four-point plan to “Fight corruption and restore ethics in Ohio”.
Within weeks and with mounting political pressure, a several-month legislative deadlock on whether to remove the head of the family was broken. The effort to expel Householder was ultimately defended by two Republicans.