Ohio’s billion-dollar bailout bribery trial showcasing rampant arrogance, corruption, and enabling
Every day more details emerge from Ohio’s billion-dollar bailout bribery trial showcasing gargantuan levels of arrogance, corruption, and enabling among energy executives and Ohio’s most powerful Republican politicians.
Yesterday in federal court, prosecutors played recordings of late Ohio right-wing lobbyist Neil Clark that showed in extravagant detail how dirty Ohio politicians and power players really are.
Pointing to the U.S. Supreme Court’s disastrous Citizens United ruling, Clark described to undercover FBI agents how to make dark money contributions in a way calculated to get a public official’s attention, saying those should come in chunks of $15,000, $20,000, $25,000 or more.
“Based on a Supreme Court decision, businesses can do this and nobody can do anything about it,” Clark said. “Politicians can get a bunch of money and say, ‘I didn’t know.’”
And that exactly how many Ohio politicians have been operating, this trial is showing: Selfish, reckless, greedy, amoral, large-scale, pay-to-play grift.
The scope of corruption at every turn in Ohio is a bit staggering, so let’s take a look at all we’ve learned so far, all together in one place:
Executives from financially struggling FirstEnergy flew Ohio House speaker aspirant Larry Householder and associate Jeff Longstreth to D.C. on the FE corporate jet in January 2017 for some swanky steakhouse dinners.
Two weeks later, Longstreth opened a bank account for a dark money group called Generation Now and that same day emailed then-FirstEnergy Vice President Michael Dowling “wiring instructions” so the company could put money in the account. A day later another dark money group was opened, Partners for Progress, which was funded exclusively by FirstEnergy, an FBI agent testified.
Partners for Progress was the dark money project of then-FirstEnergy lobbyist Dan McCarthy. It received $5 million from FirstEnergy within a few weeks of when McCarthy founded it.
During a meeting between Householder and FirstEnergy lobbyists in October 2018, a lobbyist named Robert F. Klaffky slid an envelope containing a check for $400,000 across the table and under Householder’s hand as they discussed a $1.3 billion ratepayer bailout of failing nuclear and coal plants, former FirstEnergy lobbyist Juan Cespedes testified.
“Our client cares very much about this issue,” Klaffky told Householder.
“Well yes they do,” Householder replied after peeking into the envelope.
“We were trying to establish the fact that our support was specifically tied to the legislation,” Cespedes said.
All told, Householder’s dark money political machine amassed $61 million in utility company contributions to elect a legislature that would make him speaker and pass the bailout.
In its deferred prosecution agreement, FirstEnergy admitted that it funneled those millions into the operation through the entities to make Householder speaker and to beat back attempts to repeal the bailout he championed, House Bill 6.
Why did it go through the dark money groups like that? It was thought to be bad optics if the struggling company were publicly giving the money, Cespedes said in testimony.
An FBI agent testified that hundreds of thousands in FirstEnergy money went to Householder personally for expenses ranging from paying off his credit card bills to cleaning the pool at a home he owned in Florida and settling a coal mine lawsuit for him.
Text messages between FirstEnergy executives show that Householder and FirstEnergy officials expected help from the administration of Gov. Mike DeWine and Lt. Gov. Jon Husted in passing House Bill 6 through the Ohio Senate.
Starting in 2017, FirstEnergy donated more than $1 million to nonprofit groups and political campaigns to help elect DeWine.
In the Neil Clark recording played at trial, he pegs FirstEnergy contributions toward DeWine at around $3 million.
“The governor got about $3 million from FirstEnergy,” Clark said on June 6, 2019, explaining that even so, Mike DeWine was an inconsistent supporter of the bailout.
“The governor, when he knew Larry (Householder) didn’t have the votes, he ran away from him,” Clark said. “Now he wants to come back.”
“I don’t want to say he’s a pay-to-play guy, but (DeWine is) clearly influenced by people who have money,” Clark said.
After winning election, DeWine and Husted dined with FirstEnergy executives in December 2018.
In early 2019, DeWine appointed the FirstEnergy lobbyist operating Partners for Progress, Dan McCarthy, to be his legislative affairs director, meaning McCarthy was in charge of representing DeWine’s interests before the General Assembly.
DeWine also appointed as chairman of Ohio’s utility watchdog a former FirstEnergy consultant who FirstEnergy said they bribed $4.3 million just before he took his seat on the Public Utilities Commission of Ohio.
Even though he was supposed to be regulating the utility, the official, Sam Randazzo, played a role in writing the bailout legislation, according to documents released by the Ohio House.
While it was under consideration in the legislature, 2019 text messages show then-FirstEnergy VP Dowling telling then-CEO Chuck Jones that Husted was working on extending the timeline for the subsidies: “Just had long convo with JHusted…JH is working on the ten years, he’s afraid it’s going to end up being eight.”
Text messages shown at trial indicate that former Ohio Republican Party Chairman Matt Borges was assigned to try to enlist Ohio Attorney General Dave Yost’s help with the bailout. Borges, a FirstEnergy lobbyist after leaving his post as Ohio GOP chair, had previously served as Yost’s campaign manager and a political advisor.
The texts showed that in June of 2019, Yost thought the proposed utility bailout was a bad law, but he didn’t publicly oppose it because of $24,000 in campaign support he’d received from FirstEnergy.
In a text to Cespedes, Borges said “Don’t repeat this,” but Yost believed the bailout was a bad law.
Yost “‘would be out front (in opposition) if not for (FirstEnergy) support and your involvement,’” Borges quoted Yost as saying.
Also that same day, Jones sent a photo-shopped image of Mount Rushmore to the bribed utility watchdog, Randazzo.
An effort to repeal the bill was soon mounted.
During the repeal effort, FirstEnergy executives were fighting it. Jones texted Dowling to say, “DeWine’s on board. I talked to him on Wednesday.” A DeWine spokesperson said the governor has no recollection of his conversation with Jones.
As the repeal battle raged, FirstEnergy’s Dowling worked to keep the name of a senior aide to DeWine — McCarthy — off of a $10 million infusion of corporate cash into the fight. He did so even after an assistant told him it would violate IRS rules to not list McCarthy on the transaction, according to text messages presented in court.
“He’s going to be a friend in this process,” Borges tesxted to Cespedes. “So let’s be prepared to speak up for him.”
Cespedes responded, “We will support him more than anyone.”
Additional texts said Borges was in touch with LaRose.
“LaRose is expecting us to be publicly supportive of him,” Borges wrote in a July 2019 text.
In another text, Borges wrote that LaRose wanted to meet with John Kiani, now chair of Energy Harbor (then FirstEnergy Solutions).
Kiani reportedly stood to make $100 million personally from the $1.3 billion swindle of Ohio ratepayers, by selling the power plants after enticing buyers with the bailout.
That same chairman in an email referred to Borges’ scheme to spy on the repeal effort as a “black op” and said he was prepared “to do whatever it takes” to defeat it, Cespedes testified.
Kiani had plans to operate the two FirstEnergy Solutions nuclear power plants in Ohio for a short period, get a government bailout and then sell the power plants in a deal in which he stood to make $100 million, Cespedes testified.
Randazzo has not been charged and denies wrongdoing. McCarthy has also not been charged, but did resign from the DeWine administration.
DeWine and Husted, as well as Yost and LaRose, were reelected to second four-year terms in 2022.
Husted, Yost, and LaRose are all poised to continue to seek political advancement in Ohio.
Generation Now, Cespedes, and Longstreth have pleaded guilty.
FirstEnergy entered into its deferred prosecution agreement.
Neil Clark died by suicide in 2021, nine months after being indicted by federal prosecutors.
The federal racketeering trials of Householder and Borges are ongoing and expected to last until March.
Jurors will review all the evidence and decide their fate.
It will be up to Ohioans to decide how long we will continue to allow our politicians to rob and abuse us in service to themselves and private interest profiteering.
Every day we learn more about how Ohio government has really been operating under the design of unscrupulous thieves and grifters, rotting the institutions of our state into a national joke and embarrassment: a grotesque totem to pay-to-play corruption; a decayed and decrepit husk of representative democracy.