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A year out, $60M bribery scandal felt in business, politics

Associated Press logoAssociated Press 6 days ago By MARK GILLISPIE and JULIE CARR SMYTH, Associated Press
FILE - In this Wednesday, Oct. 30, 2019, file photo, Republican Ohio state Rep. Larry Householder sits at the head of a legislative session as Speaker of the House, in Columbus. Householder is charged in a $60 million bribery case, alleging he helped a $1 billion nuclear plant bailout. The 2020 arrests of Householder and four associates in connection with the scheme have rocked politics and business across Ohio. (AP Photo/John Minchillo, File) © Provided by Associated Press FILE - In this Wednesday, Oct. 30, 2019, file photo, Republican Ohio state Rep. Larry Householder sits at the head of a legislative session as Speaker of the House, in Columbus. Householder is charged in a $60 million bribery case, alleging he helped a $1 billion nuclear plant bailout. The 2020 arrests of Householder and four associates in connection with the scheme have rocked politics and business across Ohio. (AP Photo/John Minchillo, File)

COLUMBUS, Ohio (AP) — The arrests one year ago Wednesday of then-Ohio House Speaker Larry Householder and four associates in connection with an alleged $60 million bribery scheme have rocked business and politics across the state, and events over the last year suggest a federal probe's tentacles only continue to grow.

FILE - In this May 18, 2011, file photo, a worker drives a tractor through a tree farm in North Perry, Ohio, near the cooling towers of the Perry Nuclear Power Plant. A $60 million bribery case, involving ex-Ohio House Speaker Larry Householder and others, alleges to have helped prop up the Perry and Davis-Besse Nuclear Power Station in Oak Harbor, Ohio. The 2020 arrests of Householder and four associates in connection with the scheme have rocked politics and business across Ohio. (AP Photo/Amy Sancetta, File) © Provided by Associated Press FILE - In this May 18, 2011, file photo, a worker drives a tractor through a tree farm in North Perry, Ohio, near the cooling towers of the Perry Nuclear Power Plant. A $60 million bribery case, involving ex-Ohio House Speaker Larry Householder and others, alleges to have helped prop up the Perry and Davis-Besse Nuclear Power Station in Oak Harbor, Ohio. The 2020 arrests of Householder and four associates in connection with the scheme have rocked politics and business across Ohio. (AP Photo/Amy Sancetta, File)

Here is a look at where things stand in what then-U.S. Attorney David DeVillers described as the largest corruption scandal in Ohio history:

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THE PLAYERS

Householder, a Republican, has pleaded not guilty and maintains his innocence. He was removed from the speakership last year, reelected to office in November despite the felony racketeering charges he faces, then expelled from the chamber last month in an historic vote.

His longtime political adviser Jeff Longstreth, lobbyist Juan Cespedes and Generation Now, a dark money group accused of taking millions in bribes, have pleaded guilty and await sentencing.

Former Ohio Republican Chair and lobbyist Matt Borges has pleaded not guilty, admitting in a separate campaign finance probe that he spent the money but insisting legally so. Longtime Statehouse lobbyist Neil Clark died by suicide in Florida in March.

FILE - In this Oct. 29, 2018, file photo, David DeVillers, the U.S. Attorney for southern Ohio, is shown in the federal prosecutor's offices in Cincinnati before he was formally sworn into office, Jan. 10, 2020. DeVillers, who as U.S. attorney brought charges against Ohio House Speaker Larry Householder and four associates in an alleged $60 million bribery scheme, described it as the largest corruption scandal in Ohio history. The 2020 arrests of Householder and four associates in connection with the scheme have rocked politics and business across Ohio. (AP Photo/Dan Sewell, File) © Provided by Associated Press FILE - In this Oct. 29, 2018, file photo, David DeVillers, the U.S. Attorney for southern Ohio, is shown in the federal prosecutor's offices in Cincinnati before he was formally sworn into office, Jan. 10, 2020. DeVillers, who as U.S. attorney brought charges against Ohio House Speaker Larry Householder and four associates in an alleged $60 million bribery scheme, described it as the largest corruption scandal in Ohio history. The 2020 arrests of Householder and four associates in connection with the scheme have rocked politics and business across Ohio. (AP Photo/Dan Sewell, File)

DeVillers, an appointee of Republican former President Donald Trump, resigned in February to allow the new president to pick a successor. Democratic President Joe Biden has yet to nominate DeVillers' permanent replacement.

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THE POLICY

The legislation at the heart of the scandal, House Bill 6, included a $1 billion bailout for two nuclear power plants operated at the time by a wholly-owned subsidiary of Akron-based FirstEnergy Corp. The federal criminal complaint said the conspiracy to pass the bill had partial roots on a flight FirstEnergy provided to Householder and his son to Trump’s January 2017 inauguration.

Soon after the trip, $1 million from FirstEnergy began flowing to Generation Now, controlled by Householder, in $250,000 increments. That cash and more were used to elect Householder-backed candidates and win him the speakership, prosecutors say.

Step two was passing the bill, titled the Ohio Clean Air Program, in July 2019. Ohio Gov. Mike DeWine signed it within hours. Step three was FirstEnergy spending around $38 million to finance a campaign to prevent a repeal referendum from reaching the ballot.

FILE - In this May 27, 2004, file photo, Paul Tipps, left, and Neil Clark pose in their office in Columbus, Ohio. Clark, a longtime Ohio lobbyist, who had pleaded not guilty in a sweeping federal bribery investigation, was found dead, Monday, March 15, 2021. Clark had pleaded not guilty in August 2020 over an alleged role in a $60 million scheme to funnel money from FirstEnergy companies through a network of dark money entities to then-Ohio House Speaker Larry Householder in exchange for the passage of a $1 billion nuclear bailout bill. He parlayed his Senate work initially into a powerhouse bipartisan lobbying partnership with the late Tipps, a former chairman of the Ohio Democratic Party. (AP Photo/Jay LaPrete, File) © Provided by Associated Press FILE - In this May 27, 2004, file photo, Paul Tipps, left, and Neil Clark pose in their office in Columbus, Ohio. Clark, a longtime Ohio lobbyist, who had pleaded not guilty in a sweeping federal bribery investigation, was found dead, Monday, March 15, 2021. Clark had pleaded not guilty in August 2020 over an alleged role in a $60 million scheme to funnel money from FirstEnergy companies through a network of dark money entities to then-Ohio House Speaker Larry Householder in exchange for the passage of a $1 billion nuclear bailout bill. He parlayed his Senate work initially into a powerhouse bipartisan lobbying partnership with the late Tipps, a former chairman of the Ohio Democratic Party. (AP Photo/Jay LaPrete, File)

State lawmakers have since rescinded the nuclear bailout and another provision of HB 6 guaranteeing FirstEnergy’s three Ohio utilities revenue equal to what they earned in 2018, a year of weather extremes. Majority Republicans blocked calls to repeal the entire bill, which they said was voluminous and contained some good energy policy.

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THE POWER COMPANIES

FirstEnergy has undergone a reckoning since DeVillers’ announcement. Company officials say FirstEnergy is cooperating with investigations by the Justice Department, U.S. Securities and Exchange Commission and the Federal Energy Regulatory Commission. Company officials also have said FirstEnergy has spoken with federal prosecutors about a deferred prosecution agreement.

Six top executives have been fired, including CEO Chuck Jones.

The company faces two sets of consolidated lawsuits by shareholders, one that seeks a court compelling the company’s board of directors to implement reforms. The other set of lawsuits claims the company defrauded investors.

FILE – In this April 12, 2005, file photo, operator Kevin Holko monitors the control room during a scheduled refueling shutdown at the Perry Nuclear Power Plant in North Perry, Ohio. An alleged $60 million bribery case, involving ex-Ohio House Speaker Larry Householder and others, alleged to have helped prop up this aging nuclear power plant and the Davis-Besse Nuclear Power Station in Oak Harbor, Ohio. The 2020 arrests of Householder and four associates in connection with the scheme have rocked politics and business across Ohio. (AP Photo/Mark Duncan, File) © Provided by Associated Press FILE – In this April 12, 2005, file photo, operator Kevin Holko monitors the control room during a scheduled refueling shutdown at the Perry Nuclear Power Plant in North Perry, Ohio. An alleged $60 million bribery case, involving ex-Ohio House Speaker Larry Householder and others, alleged to have helped prop up this aging nuclear power plant and the Davis-Besse Nuclear Power Station in Oak Harbor, Ohio. The 2020 arrests of Householder and four associates in connection with the scheme have rocked politics and business across Ohio. (AP Photo/Mark Duncan, File)

FirstEnergy's CEO and President Steven Strah, who succeeded Jones, has said the company has made significant reforms in the last year.

Officials from Columbus-based electric utility AEP in June disclosed U.S. Securities and Exchange Commission enforcers have subpoenaed documents related to subsidies it has received from the energy bill for two aging coal plants partly owned by the company.

AEP officials initially testified against the bill but later added its support when the coal plant subsidy was added to the legislation. The bill requires nearly all electric customers in the state to subsidize the coal plants. Previously, only Ohio customers of the AEP, Duke and AES paid the subsidy, which amounted to $114 million last year.

FILE - In this Oct. 5, 2011, file photo, the cooling tower of the Davis-Besse Nuclear Power Station looms over an adjacent farm in Oak Harbor, Ohio. This Davis-Besse plant near Toledo and the Perry plant near Cleveland, are part of the $60 million bribery case, involving ex-Ohio House Speaker Larry Householder and others, alleges to have helped prop up. The 2020 arrests of Householder and four associates in connection with the scheme have rocked politics and business across Ohio. (AP Photo/Amy Sancetta, File) © Provided by Associated Press FILE - In this Oct. 5, 2011, file photo, the cooling tower of the Davis-Besse Nuclear Power Station looms over an adjacent farm in Oak Harbor, Ohio. This Davis-Besse plant near Toledo and the Perry plant near Cleveland, are part of the $60 million bribery case, involving ex-Ohio House Speaker Larry Householder and others, alleges to have helped prop up. The 2020 arrests of Householder and four associates in connection with the scheme have rocked politics and business across Ohio. (AP Photo/Amy Sancetta, File)

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THE PUCO

The dismissal of Jones, who initially denied any wrongdoing by the company, appeared to be tied to a $4.3 million payment that FirstEnergy made in January 2019, purportedly to end a longstanding consulting contract with a person soon to be appointed Ohio’s top utility regulator.

There has been no dispute the regulator was Sam Randazzo, a seasoned utility lawyer and lobbyist, who DeWine appointed chair of the Public Utilities Commission of Ohio in February 2019.

Randazzo resigned from the commission in November after FBI agents searched his Columbus townhome, the same day FirstEnergy revealed the payment. Language in a separate lending document filed by the company that month suggested Randazzo helped the company after he became PUCO chair.

DeWine appointed former Franklin County Common Pleas Court Judge Jenifer French, a Republican, to succeed Randazzo as chair in March. French has pledged to restore public trust in the commission through improved transparency.

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THE POLITICS

DeWine, up for reelection next year, has faced some political pushback for disregarding cries of alarm from consumer and environmental advocates and a group of fellow Republicans over Randazzo's deep ties to FirstEnergy.

The governor has defended his decision to appoint the utility law expert.

DeWine reassigned Laurel Dawson, the chief of staff who oversaw the Randazzo selection process, in a May staff shuffle described as unrelated. The governor's top lobbyist, Dan McCarthy, is a former FirstEnergy lobbyist who was president of one of the dark money groups implicated in the alleged bribery scheme. McCarthy has said his actions were legal and he has no indication he is a target of the probe.

Still, Ohio Democrats have seized on the ongoing investigation in their efforts to reverse Republicans' dominance in state politics next year, which is complete. The party controls every statewide office, both chambers of the state Legislature and the Ohio Supreme Court, with many of those seats up for grabs.

In May, Democratic state Reps. Allison Russo and Bride Rose Sweeney re-introduced an anti-corruption bill aimed at shedding light on dark money and other political spending in the state.

The next month, Democratic gubernatorial candidate Nan Whaley, the mayor of Dayton, unveiled a four-point plan to “combat corruption and restore ethics in Ohio."

Within weeks and with political pressure mounting, a monthslong legislative stalemate over whether to remove Householder was broken. The effort to expel Householder was ultimately championed by two Republicans.

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Gillispie reported from Cleveland.

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