COLUMBUS, Ohio (AP) — The largest corruption case in Ohio history ended last week with convictions for former House Speaker Larry Householder and lobbyist Matt Borges, a former GOP executive. But the state’s attorney general said it was “just the beginning of accountability” for the now-tainted $1 billion bailout plan for two aging nuclear power plants.
Householder, 63, and Borges, 50, could spend up to 20 years in prison on their racketeering conspiracy convictions. The jury agreed with prosecutors that Householder orchestrated a $60 million bribery scheme secretly financed by Akron-based FirstEnergy Corp. to secure his power, pick his allies and pass the bailout bill — and that Borges has engaged in a dirty tricks campaign to defend the bailout law from a referendum.
The investigation remains open, and additional lawsuits and regulatory actions remain pending. Here’s how things stand:
CAN JUDGMENTS BE APPEALED?
Probably. Householder and Borges are out on bail. They have until next Thursday to file motions, including for a new trial. They will be sentenced after those motions are resolved and the Probation Service’s pre-sentence investigation is complete, which could take weeks. They will then have 14 days to appeal their convictions to the US Court of Appeals for the Sixth Circuit, the US Attorney’s Office said.
They were the latest parties to be arrested in July 2020. Political strategist Jeffrey Longstreth, who worked on Householder’s campaign, and lobbyist Juan Cespedes pleaded guilty and testified in the seven-week trial. The government is likely to recommend a reduced sentence for them.
Generation Now, a “dark money” group that was used to funnel FirstEnergy’s millions to Longstreth, Householder and others, also pleaded guilty to its role. The fifth person charged, longtime Statehouse lobbyist Neil Clark, died by suicide in March 2021.
WHO ELSE CAN BE BLAMED?
As the government’s investigation continues, a number of other names have surfaced.
In a deal to avoid prosecution, FirstEnergy admitted paying a $4.3 million bribe to favor Sam Randazzo, a former top state utility regulator who had ties to the company. Randazzo resigned the day after the FBI searched his home. Randazzo has denied wrongdoing and has not been charged.
There are also no charges against the fired FirstEnergy executives after Householder and others were arrested. Those executives include former CEO Chuck Jones and former vice president of external affairs Michael Dowling, whose text messages, emails and travel itineraries contributed heavily to the case against Householder.
Prosecutors alleged the executives met with Householder to hatch the scheme during a fancy dinner in Washington — which Householder denied on the stand. Jones said neither he nor any other FirstEnergy employee engaged in “illegal activities in their dealings with government officials,” speaking through a New York-based public relations firm.
Individuals with ties to Republican Gov. Mike DeWine have also come to light through investigations or lawsuits.
Lt. Gov. John Husted was considered an ally by FirstEnergy executives in their fight for the bailout bill.
Dan McCarthy was a former FirstEnergy lobbyist and Husted confidant who formed another involved dark money group, then worked as a lobbyist on behalf of the governor.
Mike Dawson was a former FirstEnergy consultant. His wife, Laurel Dawson, was the governor’s chief of staff, and she helped make Randazzo chairman of the utility regulator and approved sending a state jet to take lawmakers to the bailout vote. The flight ultimately never happened.
The governor’s office says the actions of all of his staff were excellent — and notes that no staff were questioned.
WHAT HAPPENS TO THE OTHER CASES?
Republican Ohio Attorney General Dave Yost asked a Franklin County judge last week to lift a stay on discovery in a separate civil racketeering case in the state. That would allow him to continue gathering documents and deposing witnesses, which he said could “uncover a larger number of defendants.”
One group of FirstEnergy shareholder lawsuits was settled last year. The deal requires the company to reform its corporate governance, transparency and ethics. However, a shareholder wants the agreement to be renegotiated and this is still pending. Additional corporate governance requirements were included in FirstEnergy’s deferred prosecution agreement. To avoid prosecution, the company must meet these requirements by July 2024.
FirstEnergy still faces lawsuits from shareholders who allege the company committed securities violations. The defendants include both Jones and his successor, former CEO and president Stephen Strah, who abruptly stepped down in September. A class certification hearing before a federal judge in the case is scheduled for Friday.
WHAT REGULATORY ACTIONS ARE POSSIBLE?
FirstEnergy has faced scrutiny from state and federal regulators, as well as the US Securities and Exchange Commission.
Four investigations by the Ohio Public Service Commission were suspended last week for an additional six months while the federal probe continues. Those efforts have focused on FirstEnergy’s political and charitable contributions, its compliance with corporate separation laws and whether details brought to light by the Householder case were properly disclosed as the company sought past rate adjustments and capital returns.
The Consumer Council of Ohio, which represents residential utility customers, subpoenaed documents and released witnesses when reviews were halted.
Meanwhile, FirstEnergy “fully resolved” the issues with the Federal Energy Regulatory Commission in a consent agreement signed in January. The regulatory commission found that FirstEnergy failed to disclose nearly $94 million in lobbying for the bailout bill. He was fined $3.9 million. The SEC review is ongoing.
WHAT STATE HOUSE SOLUTIONS ARE PROPOSED?
Legislation containing the rescue plan gave FirstEnergy a guaranteed profit subsidy, but that was eliminated in a settlement agreement last year. Provisions of the nuclear aid bill were also repealed. Some lawmakers are fighting to repeal other energy subsidies included in the sweeping measure that ratepayers are still paying for.
Various groups of House Republicans and Democrats have introduced anti-corruption legislation this session. They say the proposed laws could address loopholes in campaign finance law highlighted by the case — loopholes that allow uncontrolled fundraising and spending by dark money groups.
Others are calling for more transparency under Ohio’s lobbying laws, which require little or no details to be made public about the air travel, earnings and meals, sports tickets and other perks Householder received.
The prospects for these bills are unclear.