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How sports betting, nuclear bailouts and undercover FBI agents collided in Ohio’s historic public corruption scandal

The Plain Dealer  Cleveland logo The Plain Dealer Cleveland 1/15/2023 Jake Zuckerman, cleveland.com

COLUMBUS, Ohio – It was early 2019 when two FBI agents and a former NFL player hired as an informant sat for a meeting in the office of a lobbyist who they suspected was a crook.

The gathering was organized to discuss influencing sports betting legislation in Ohio. But after the undercover agents and the lobbyist moved to a nearby steakhouse, the conversation turned to Larry Householder, at the time the newly chosen speaker of the Ohio House .

Householder is on trial next week on allegations of running a $60 million racketeering enterprise to pass House Bill 6 in 2019, a public corruption case prosecutors have described as the largest in state history. Two alleged conspirators have pleaded guilty, as has one nonprofit used in the scheme. FirstEnergy Corp., an Akron-based Fortune 500 utility company, admitted to prosecutors that it paid off Householder, who will be tried alongside Matt Borges, a lobbyist and former chairman of the Ohio Republican Party.

In a case bogged down in the finer points of campaign finance and utility law, the FBI agents’ cloak and dagger approach yielded statements the government is using as express proof of the men’s participation in a bribery scheme.

“Nobody knows the money goes to the Speaker’s account,” Neil Clark, a powerful GOP lobbyist, allegedly told the undercovers in one of their many conversations. “It is controlled by his people.”

Clark, who was criminally accused of serving as Householder’s proxy in the scheme, was the lobbyist at the table on Jan. 10, 2019. He was joined by two agents operating undercover as real estate developers from Nashville using the names “Brian Bennett” and “Rob Miller” and former Cincinnati Bengals free safety turned real estate developer Chinedum Ndukwe, who was paid at least $27,000 by the FBI around that time.

The trio was already on its way to closing a successful corruption investigation. Ndukwe and the agents were in the middle of another undercover operation, one that would ensnare then-Cincinnati Councilman and Democratic rising star P.G. Sittenfeld. He was convicted last year of bribery and attempted extortion after all three testified at his trial.

John Rabenold, a payday lending lobbyist, introduced Clark to the purported investors. According to Clark, Rabenold claimed they wanted to place sports betting terminals in a boutique hotel development that Bennett, Miller and Ndukwe said they were working on.

Through the course of 2019, the full-time FBI agents met Clark and talked on the phone repeatedly with him. As the FBI recorded Clark’s phone calls, its agents met with him and eventually Householder himself.

The precise nature of the connection between HB6 and sports betting remains unclear, but court records indicate many interactions between Clark and the undercover agents revolved around both subjects in tandem rather than just one or the other.

Federal prosecutors say the undercovers paid to retain Clark as a consultant. According to Clark, they paid him $5,000 per month, which was originally offered in cash. Hiring him as a consultant avoided the public disclosures required of lobbyists.

Between Clark’s October 2020 interview with Cleveland.com and The Plain Dealer, his posthumous memoir, interviews with other subjects, hundreds of pages of court filings in the Householder case, and transcripts of testimony from Ndukwe and the three agents via their undercover pseudonyms in Sittenfeld’s trial, a picture emerges of a sprawling public corruption probe from the FBI and a murky intersection between a nuclear bailout at the center of Householder’s case and a sports betting bill that ran parallel to it.

That sports betting bill passed out of the House but died in the Senate. The next crop of lawmakers passed a sports betting bill that took effect in 2023.

While the prosecutors and Clark’s accounts align on several elements of their interactions, they split in one key instance: Clark’s culpability. The question could remain unanswered, at least in part: Clark died in early 2021. The government then dropped its case against him.

What the feds say

In the run-up to his trial, Householder asked a federal judge to block from evidence the recorded communications between Clark and undercover FBI agents in which “Clark brags about his alleged influence” with Householder and “provides a simple narrative description” of the alleged bribe.

Responding, the prosecutors offered their most comprehensive account to date of the FBI agents’ interactions with Clark, Householder, and others. They say the FBI agents retained Clark to help advance their interests in sports betting legislation. Their filing doesn’t identify agents by name, but Clark’s book fills in some of the details.

Prosecutors say Clark advised the undercover agents to set aside between $50,000 and $100,000 to pay money into 501(c)(4)s for three public officials, including Householder. Those so-called “dark money” groups refer to a type of ­nonprofit entity that can raise unlimited amounts to spend on politics without disclosing the source of its funds. Prosecutors say Householder secretly and illegally controlled Generation Now, a nonprofit used to accept FirstEnergy’s money. (Generation Now pleaded guilty to racketeering charges in 2021.)

Clark continued discussions with the two men. At a May 1, 2019, meeting, prosecutors say, Clark described Householder’s nonprofit as a “secret” that’s kept unrecorded. Clark said no one knows the money goes to Householder’s account, which is controlled by “his people.”

In June, while discussing “pay to play” politics with the undercover agents, Clark said Householder took millions from FirstEnergy and “he went to war for them.” He said he wanted to be around politicians like Householder who “will go to the wall, but those guys that go to the wall can only do it once a year, because if they do it all the time, everybody know they’re pay to play.”

At the time, Clark also was working with Rep. Dave Greenspan, a Republican, on a bill to legalize sports betting in Ohio. According to prosecutors, Clark advised Householder to kill Greenspan’s bill as punishment for the lawmaker’s opposition to HB6. Jeff Longstreth, one of the two Householder conspirators who pleaded guilty, later asked Greenspan via an intermediary to delete his text messages from Householder about HB6 in exchange for forgiveness. Greenspan has admitted to providing information to the FBI about the incident and has been subpoenaed to testify at trial.

HB6 passed on July 23, 2019. Gov. Mike DeWine signed it that same day. The bill was worth an estimated $1.3 billion to FirstEnergy. With its passage came what prosecutors say was a roughly $38 million effort to block an effort to repeal the bill via referendum. The company recently admitted it spent about $90 million in total lobbying to pass the bill.

That same week, Clark met with the two men in Nashville to talk sports betting. Clark, according to prosecutors, also spoke candidly about the FirstEnergy HB6 operation.

“On HB6, FirstEnergy got $1.3 billion in subsidies, free payments … so what do they care about putting in $20 million a year for this thing?” he said, according to court documents. “They don’t give s---.”

Clark talked the undercovers through their plan on sports betting, which included writing a check to Householder. But he told the men to be humble about it, given that Householder was regularly getting $2 million checks from FirstEnergy, which he referred to as “the bank.”

“You’ll walk in with your check and you’ll be respectful, and they’ll remember it as that number,” he said, per court documents.

By Sept. 23, 2019, Miller and Bennett, the undercovers, met with Householder for dinner. Householder brought Rep. Jay Edwards, a fellow Appalachian Republican who was a trusted lieutenant, and a staffer.

Householder, according to prosecutors, talked about the undercover agents’ interest in sports betting legislation; Householder and Clark’s multimillion dollar effort to thwart a referendum seeking to repeal HB6; and other topics. But Longstreth couldn’t make the dinner, so they postponed handing off a check.

Edwards, in an interview with Cleveland.com and The Plain Dealer, confirmed that the dinner occurred but said he didn’t remember specifics and probably couldn’t even pick the FBI agents out of a lineup.

The next day, the plan nearly solidified, prosecutors say. Before 8 a.m. that morning, Clark talked to Householder for over 35 minutes. Clark told one of the undercovers that Householder instructed him to call “Jeff” (a likely reference to Longstreth) to see where to direct the money. He also said he received a call from Householder’s chief of staff and was told of a plan to write a sports betting bill “consistent with the compromise discussed during the meeting last night,” according to the court filing.

Clark said if they write the check now, “it’s going to be used on this HB6 thing.” At the time, supporters of the bill were mounting a multimillion campaign to thwart its repeal with tactics including ad buys and hiring away signature gatherers hired by the opposition to help get the issue on the 2020 ballot.

The government’s court filings don’t explicitly say whether the agents wrote Householder a check. Clark claims they did not.

“Shortly thereafter, the government ceased its communications with Clark and the undercover operation,” prosecutors wrote.

U.S. District Judge Timothy Black, who is presiding over the trial, eventually ruled that the recordings can be admitted as evidence.

‘My client, the FBI’

According to Clark’s account in an interview and through his memoir, he knew something was off with the purported Tennesseans. But given the referrals from Rabenold and Ndukwe, he opted to trust them.

Rabenold declined to comment. Ndukwe could not be reached through his business. His longtime attorney declined to comment Wednesday but said he doesn’t believe his client will be a witness in the Householder trial.

Clark met Bennett and Miller at a Cincinnati Reds game in June 2019, along with Nduwke and an FBI undercover who only went by “Vinny.” It was the last documented interaction between Ndukwe and the HB6 suspects. The next month, Clark said he rebuffed an offer for a private plane but drove to Nashville to meet the undercovers.

He said Bennett and Miller offered trips on private jets, yachts, and open bars with pretty women to entice Householder. Clark called their efforts “blatantly cheesy and unprofessional and likely illegal.”

After talking them down from the more extravagant offers, Clark says he then tried to broker a dinner with Householder. He said the men seemed unusually eager to start writing checks.

So on Sept. 23, 2019, they all got together at the Aubergine Private Dining Club in Columbus, a members-only club with a $2,000 per year required spend for those who join. (From its website: “There is no menu by design, and the reservation only dinners are curated specifically for the members and their guests with an attention to detail rarely evidenced in the restaurant world.”)

“How much can we give him?” Bennett asked regarding Householder, as recounted in Clark’s book.

“Five, 10, 15, 20, 25 thousand, whatever you want, then hand him the check,” Clark replied.

Householder came with a staffer and Edwards. According to Clark, the lawmakers rebuffed a request from the undercovers for a change to the sports betting bill. Thus, Clark signaled to them to avoid any mention of the check. The agents, upset by the cost of dinner and lack of policy success, faded away. Their last check to Clark was received in November 2019.

Clark’s book doesn’t specify a dollar amount that was offered to Householder. And it doesn’t claim, as the prosecutors did, that the sports betting bill was retooled in any sort of compromise.

Clark’s depictions of his talks with Greenspan roughly track with the FBI’s. Clark, who was working with Greenspan on a sports betting bill, said he called the lawmaker at Householder’s behest to determine his support for HB 6.

Greenspan said he couldn’t vote for the bill and understood the possibility of retaliation from Householder. Clark said in his book that Householder asked him what to do about Greenspan. He responded that Householder should “kill” Greenspan’s sports betting bill.

Clark depicted all this under a chapter in his memoir titled “My Client the FBI.” Clark offered his unwitting dealings with the FBI as exculpatory. He said their offers of yachts and jets were turned down and they didn’t get the amendments they wanted.

“What they did get was boastful comments taken out of context from me,” he said. “If they were looking for a quick, sports betting ‘pay to play’ sting, it was they who got stung.”

A spokeswoman for the U.S. Attorney’s office for the Southern District of Ohio didn’t respond to inquiries.

Jake Zuckerman covers state politics and policy for Cleveland.com and The Plain Dealer. Read more of his work here.

©2023 Advance Local Media LLC. Visit cleveland.com. Distributed by Tribune Content Agency, LLC.

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