COLUMBUS, Ohio – The U.S. Justice Department told a federal appeals court Monday that the prosecution was correct: former Ohio House Speaker Larry Householder accepted millions of dollars in bribes from FirstEnergy Corp. and is earning every day of his 20-year prison sentence.
In March 2023, a jury convicted Householder, 65, of organized crime, a high point in the prosecution of what the U.S. attorney who opened the case called “probably the largest bribery and money laundering scheme ever perpetrated against the state of Ohio.”
Prosecutors presented a simple story: Householder had political ambitions that required a lot of money, and Akron-based FirstEnergy needed a bailout of two nuclear power plants that were no longer competitive in a competitive market. So they struck a deal that was essentially corrupt, prosecutors say.
Householder appealed his conviction earlier this year, arguing that “knowing winks and nods” do not prove bribery. He also claimed there were several procedural errors in his trial, including the dismissal of a juror who refused to wear a mask after a COVID-19 infection in the jury pool, a federal judge’s refusal to recuse himself based on a political feud dating back to the early 2000s, and a handful of other legal errors he described in his appeal.
Householder, a Republican, was convicted along with lobbyist Matt Borges, an agent hired by a FirstEnergy subsidiary who was accused of bribing a campaign aide $15,000 to obtain inside information about the effort to repeal FirstEnergy’s bailout package. Two other defendants, including lobbyist Juan Cespedes and Householder’s former deputy Jeff Longstreth, testified against Householder and Borges. A fifth, Neil Clark, committed suicide. FirstEnergy admitted in a related trial that the company bribed Householder and agreed to cooperate with the federal investigation.
“The jury saw firsthand that FirstEnergy financed Householder’s bid for speaker in exchange for his promise to use that position to push through legislation to save nuclear energy,” wrote Alexis Zouhary, an assistant U.S. attorney. “The secret deal was made over steak dinners in Washington, D.C., where Householder was raising money for the speaker’s office.”
While Householder and others involved have been sentenced to prison in a federal prison or are awaiting their sentences, none of FirstEnergy’s current or former executives have been convicted, although two have been charged by the states (rather than the federal government).
Over the course of a lengthy trial, witnesses, text messages and emails painted a picture of constant contact between Householder and FirstEnergy as the company pumped nearly $61 million into a dark money nonprofit that could protect the identities of its donors and that Householder secretly controlled. First, the money was used to fund a political machine to put Householder and a slate of loyal Republicans in the Ohio House of Representatives to launch an insurrection campaign to make Householder Speaker of the House. Then, the money was used to pass House Bill 6, a law that would impose more than $1.3 billion on electricity customers to bail out FirstEnergy’s cash-strapped nuclear plants and up to $50 million a year on the company in a “decoupling fee.” And then it was used to fund a multimillion-dollar campaign to undermine and ultimately defeat an attempt to repeal the law on the statewide ballot.
During that period, from 2017 to early 2020, Householder also used the money to settle a court judgment against his business, pay off his credit card bills, and repair his Florida home. Householder’s appeal does not mention the personal benefits he received, but prosecutors do.
Householder was convicted of organized crime, a charge usually reserved for the Mafia, in which a group of people commit a series of crimes – in this case, extortion, bribery, money laundering and others – with a common goal.
“The statements, communications and records detailing the payments in exchange for official action; the speed with which Householder pushed through a bailout of FirstEnergy after taking office as Speaker; the pressure Householder put on other public officials regarding the bailout; and the staggering amount of money he received all support this conclusion,” Zouhary wrote.
The 6th Circuit Court of Appeals will hear the case. The district leans conservative, with the split between Republican and Democratic candidates being about 60:40, according to legal blog Balls and Strikes. A panel of judges from the pool of district judges has not yet been appointed.
Prosecutors’ appeal rests on a legally tricky position. While they say they are correct that Householder took bribes, the federal government has not yet charged anyone with paying those bribes. Although Monday’s court filing names two former FirstEnergy executives — CEO Chuck Jones and senior vice president of external affairs Mike Dowling — dozens of times as masterminds of the bribery scheme, the Justice Department has not criminally charged them.
In that vacuum, an organized crime unit convened by Ohio Attorney General Dave Yost indicted Yost and Dowling on a series of bribery offenses. Those charges, however, focus not on the operation led by Householder but on the appointment of Sam Randazzo, a high-ranking state regulator accused of accepting a separate but related $4.3 million bribe from the two men. FirstEnergy admitted to that aspect of the scheme as well. However, Jones and Dowling have pleaded not guilty and are awaiting trial.
Jake Zuckerman covers state politics and policy for Cleveland.com
