Ohio House Speaker Charged With Racketeering Conspiracy In Nuclear Bailout

Ohio House Speaker Larry Householder
[Andy Chow / Ohio Public Radio]

Updated: 4:05 p.m., Tuesday, July 21, 2020

Ohio House Speaker Larry Householder was arrested Tuesday morning by federal officials on charges relating to a $60 million public corruption racketeering conspiracy case.

Four others were also arrested: former Ohio Republican Party Chairman Matt Borges, Householder adviser Jeffrey Longstreth, and lobbyists Neil Clark and Juan Cespedes.

Householder is charged with accepting payments from the dark money group Generation Now for his personal benefit and to help advance his political career, in exchange for securing the passage of House Bill 6.

At a press conference Tuesday afternoon, U.S. Attorney David DeVillers called it "the largest bribery and money laundering scheme ever perpetrated against the people of the state of Ohio."

"This was a quid pro quo," DeVillers said. "This was pay to play.”

According to FBI special agent Chris Hoffman, this is the first time a racketeering charge has been used on a public official in the Southern District of Ohio.

Following the news conference with DeVillersin Columbus, Gov. Mike DeWine asked Householder to step down.

“I am deeply concerned about the allegations of wrongdoing in the criminal complaint issued today by the U.S. Attorney’s Office," DeWine said in a press release. "Every American has the presumption of innocence until proven guilty.  Because of the nature of these charges, it will be impossible for Speaker Householder to effectively lead the Ohio House of Representatives; therefore, I am calling on Speaker Householder to resign immediately. This is a sad day for Ohio."

Householder refused to comment on the question of resigning.

Charges against Householder and his associates were laid out at a U.S. District Court hearing on Tuesday afternoon.

Householder faces a charge of conspiracy to commit racketeering, which is punishable by up to 20 years in prison and a $250,000 fine. As a condition for his release, U.S. District Judge Stephanie K. Bowman ordered Householder to remove all firearms from his home by 5 p.m. Wednesday, limit his travel to the Southern District of Ohio, and avoid contact with any potential victims, witnesses or defendants.

Borges and Longstreth also face a charge each of conspiracy to commit racketeering, and will have similar release limitations. All are required to surrender firearms in their homes. Cespedes is charged with conspiracy to participate in racketeering.

In addition to the charges against individuals, federal prosecutors are bringing a separate case against Generation Now. The group is charged with conspiracy to participate in enterprise affairs through racketeering.

DeVillers said prosecutors' next step is to secure an indictment from a federal grand jury. A preliminary hearing in the case is set for August.

Nuclear Charges

The case is tied to the controversial nuclear power plant bailout law passed last year. The law was challenged in an expensive campaign that included charges of racism. The effort to repeal it was equally bitter, with allegations of intimidation of signature gatherers.

The law took effect in October, after opposition group Ohioans Against Corporate Bailouts missed the deadline for collecting signatures for a referendum. In January, the group dropped their courtroom battle to stop the law from taking effect. There was dark money in play on both sides, and donors were never revealed.

The law sends $150 million a year to the Davis-Besse and Perry power plants, which were owned by FirstEnergy Solutions. That company, which was a subsidiary of FirstEnergy Corporation when it was first created but is no longer related to FirstEnergy Corporation, emerged from bankruptcy protection earlier this year and is now known as Energy Harbor.

FirstEnergy contributed more than $150,000 to Ohio House Republicans in the run-up to the 2018 election — including more than $25,000 in donations to Householder's campaign.

According to the state lobbyist database, Energy Harbor is the only client listed for Cespedes. Borges also worked as a lobbyist for FirstEnergy Solutions, while Longstreth is connected to Generation Now, which campaigned against the bailout referendum.

Questionable Histories

Householder, a Republican from Glenford, first served as Ohio House Speaker from 2001-2004, but stepped down due to term limits. After working as the Perry County Auditor, Householder returned to the Ohio House in 2017.

It's not the first time in recent memory an Ohio House Speaker has been under FBI scrutiny. Then-Speaker Cliff Rosenberger resigned in April 2018 in the midst of an FBI investigation into to payday loan legislation, though no charges were filed.

State Rep. Ryan Smith (R-Bidwell) was elected to take Rosenberger’s place as Speaker. But in January 2019, after months of in-fighting among Republicans, Householder ousted Smith with the support of House Democrats, and took back his top spot in the chamber.

And Householder himself has been under a microscope before, including the FBI’s. As he was building support for his return to the Speakership, Householder had to return thousands of dollars in improper county Republican Party donations, though no charges were filed. In 2006, there were also no charges from an FBI investigation into allegations of bribery and corruption against Householder and several aides.

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