News & Politics

FBI Arrests Ohio House Speaker, Former GOP Chairman in Alleged $60M Bribery Scheme

This Wednesday, Oct. 30, 2019 file photo shows Ohio State Representative Larry Householder (R), of District 72, stands at the head of a legislative session as Speaker of the House, in Columbus. FBI agents were at the farm of Householder on Tuesday morning, hours ahead of a planned announcement of a $60 million bribe investigation by federal prosecutors. (AP Photo/John Minchillo, File)

After an FBI raid this morning at the farm owned by Ohio House Speaker Larry Householder, federal officials arrested Householder and several other prominent Ohio Republicans, including Matt Borges, former chairman of the Ohio Republican Party.

U.S. Attorney David DeVillers confirmed Householder’s arrest but refused to discuss the case. A press conference has been scheduled for 2:30 p.m. to announce the charges. A spokesperson for DeVillers described the case to reporters as a “public corruption racketeering conspiracy involving $60 million.”

The 84-page FBI complaint remains under seal ahead of planned federal court appearances in Cincinnati this afternoon.

A source told PJ Media that the case is connected to House Bill 6, a controversial energy bill that bailed out nuclear and coal-powered plants while reducing green energy mandates, which Householder, a Republican, shepherded through the Ohio House.

In addition to Householder and Borges, several others were arrested: lobbyists Neil Clark and Juan Cespedes, and Jeffrey Longstreth, an advisor to Householder.

H.B. 6, which was signed into law in late 2019, levied fees on the bills of Ohio electricity customers. The money, $150 million annually, was then to be redistributed to the struggling Davis-Bessie and Perry nuclear power plants and a pair of coal-burning power plants—one located in Indiana—owned by Ohio Valley Electric Corp.

First Energy Solutions, owner of the nuclear plants, filed for bankruptcy in March 2018, blaming the availability of cheap natural gas for its financial woes. The company spent $2.7 million  that year on PR and lobbying firms hoping to get a bailout from the state.

As H.B. 6 made its way through the legislature, proponents and opponents of the measure mounted major public relations campaigns, sinking millions into ads. Cleveland.com:

Generation Now, the dark-money group that spent $1 million on helping Householder get elected as House speaker, as of Thursday had bought or reserved $4.6 million worth of pro-HB 6 radio and TV ads that have run across the state —  according to FCC records compiled by an ad-tracking firm in Ohio. The ads were placed by The Strategy Group, a prominent Columbus political consulting firm that supported Householder’s leadership bid.

The group also has spent between $12,000 and $60,000 promoting the ads on Facebook.

The ads encourage viewers to call their state representatives and encourage them to support the “Ohio Clean Air Program.” One ad ominously warns of “Washington lobbyists, big money and dark deals” that are “working to stop the Ohio Clean Air program” so they can create an energy monopoly for Big Oil.

Groups opposing HB6, including those funded by the oil and natural gas industry, have their own ads, and have spent around $540,000 on them.

But the palace intrigue doesn’t end there:

FirstEnergy during the 2018 election cycle gave more than $154,000 to Householder and a slate of Republican House candidates who backed his campaign to lead the Ohio House of Representatives.

Around the same time, two “dark-money” political groups — meaning the source of their funding can’t be tracked — spent more than $1.6 million on ads either supporting Householder’s candidates or opposing those who backed [Ryan] Smith.

One of those pro-Householder groups, the Growth and Opportunity PAC, raised $1 million from a single donor — a nonprofit called Generation Now. (Remember that name.) The group’s business address in Ohio is a house owned by Jeff Longstreth, a longtime Householder adviser.

Smith got support from his own deep-pocketed dark-money groups. But Householder’s candidates ended up winning 11 of the 12 seats that were up for grabs.

The leadership struggle dragged out for months. But in January, Householder managed to get elected with Democratic support. And in April, a member of his new leadership team introduced HB 6.

Longstreth, as noted above, was arrested today in connection with the alleged $60 million bribery scheme.

Rep. Ryan Smith held the speaker’s gavel for just six months before getting defeated by Householder at the end of 2018. Smith was originally elected to the position in June 2018 after then-Speaker Cliff Rosenberger resigned ahead of an (ongoing) FBI public corruption investigation related to a payday lending bill. You can’t make this stuff up.

H.B. 6 was ultimately passed and signed into law by Republican Gov. Mike DeWine last year, but the controversy didn’t end there. A group calling itself Ohioans Against Corporate Bailouts mounted a referendum campaign hoping Ohio voters would vote to repeal the law. When they failed to gain enough signatures to get the measure on the ballot, the group cried foul, accusing the state’s attorney general and secretary of state of slow-walking approval of their request to begin collecting signatures for the repeal effort, causing them to miss the deadline. The group sued in federal court but agreed to drop the case after 6th Circuit U.S. Court of Appeals Judge Edmund Sargus rejected their request for more time.

This is Householder’s second stint as speaker of the Ohio House. He was term-limited out of the legislative body in 2004, but reclaimed the seat in 2016 and, as noted above, was elected to serve as speaker again in January 2019 after the contentious internecine statehouse war. In 2004, he and several top advisors were investigated by the feds for alleged money laundering and irregular campaign practices.

According to a 2015 Daily Advocate report, “An anonymous, nine-page memo leaked to the FBI, IRS and then-Secretary of State J. Kenneth Blackwell in 2004 accused the House Republican Campaign Committee that Householder oversaw of overpaying vendors out of its $1 million budget, then making secret payments back to Householder and his advisers.” Householder denied the charges, saying the memo contained, “half-truths and outright lies.”

Blackwell referred the case to the Justice Department, which declined to prosecute Householder after a two-year investigation.

Lobbyist Neil Clark, arrested alongside Householder today, blasted the speaker for his alleged corruption in a 2015 interview.

“There’s a whole host of bodies [Householder’s] left behind and to me, it’s all about one’s ability to maintain integrity while they’re here,” Clark told the Daily Advocate. “Many people want to see a continuation of the honorable approach we’ve seen under (former Speaker) Bill Batchelder and Cliff Rosenberger. I don’t think anybody wants to go back to an old way of heavy-handedness.”

Now federal investigators are digging up those bodies and there’s no telling how many lawmakers and lobbyists will be caught up in the investigation. No doubt many of them are on pins and needles today waiting for a knock at their door.

It’s long past time for the corruption to be rooted out of the Ohio statehouse once and for all—and for an infusion of new blood in the House.