'Unholy Alliance' of Power, Money Fueled Corruption Scheme

COLUMBUS, Ohio (AP) -- An accused co-conspirator called it an “unholy alliance" — dealings between a longtime Ohio politician seeking to restore his power and an energy company in desperate need of a billion-dollar bailout to rescue two nuclear plants in the state.

Both the politician, current Ohio House Speaker Larry Householder, and FirstEnergy Corp., identified in an FBI complaint as “Company A,” got what they wanted last year from what federal officials say was a $60 million bribery scheme funded by an unidentified company the complaint makes clear is FirstEnergy and its affiliates.

What Householder and his alleged co-conspirators might not have realized until their arrests on Tuesday and the affidavit was made public was that the FBI had insider help from people who cooperated with agents, recorded phone calls and dinner conversations, and shared text messages from members of the alleged conspiracy.

Householder, one of the state's most powerful politicians, and FirstEnergy, which through its affiliates provided nearly all of the cash used to fund the alleged scheme, now face a reckoning that could upend Ohio's political landscape.

Both FirstEnergy and Householder were successful. Householder surged to power with his election as House speaker in January 2019, and FirstEnergy got its bailout. Tens of millions of dollars were then spent to fund a campaign that prevented Ohio voters from deciding in a ballot issue whether they were in favor of paying more on their electric bills to help keep the struggling plants afloat.

Householder's attorney declined to comment on Friday.

FBI Agent Blane Wetzel's detailed 81-page affidavit in support of the criminal complaint against Householder and four others showed how the Perry County politician was connected to FirstEnergy. It painstakingly details how the alleged conspiracy to spend $60 million of the corporation's money unfolded.

The affidavit lays out the speaker's ties to the corporation, starting with Householder and his son flying to President Donald Trump's inauguration in January 2017 on a FirstEnergy plane.

According to the affidavit, there were 84 telephone contacts between Householder and FirstEnergy President and CEO Chuck Jones between February 2017 and July 2019; 14 contacts with the corporation's vice president for external affairs; and 188 contacts with its Ohio director of state affairs.

“Let me be clear, at no time did our support for Ohio's nuclear plants interfere with or supersede our ethical obligations to conduct our business properly,” Jones told investors Friday during a quarterly earnings call. “The facts will become clear as the investigation progresses."

Jones called it a “grave and disturbing situation,” but said he had “no worries” that he or the company did anything wrong.

The affidavit supporting the criminal complaint names Householder's longtime political adviser, Jeffrey Longstreth, and two lobbyists for a FirstEnergy subsidiary, including former state Republican chair Matt Borges.

All the alleged members of the conspiracy benefited personally from the scheme, using sums Wetzel described colloquially as “bags of cash” from FirstEnergy. Householder spent around $500,000 of FirstEnergy money to settle a business lawsuit, pay attorneys, deal with expenses at his Florida home and pay off credit card debt. Another $97,000 was used to pay staff and expenses for his 2018 reelection campaign, Wetzel wrote.

Longstreth, as the affidavit details, wrote the checks from an account for Generation Now, a nonprofit through which most of the FirstEnergy-related money flowed. Longstreth also essentially ran the campaigns of Republican House candidates whom Householder needed to win so he could assume the speakership and push the divisive bailout bill through the Legislature.

According to the affidavit, Longstreth wired $1 million to his personal brokerage account as the scheme wound down.

A message seeking comment was left Friday with Longstreth.

Roughly $3 million of FirstEnergy-affiliated money was spent to help 15 Householder-backed House candidates in the May 2018 primaries and six more in the November general election.

“Having secured Householder's power as Speaker, the Enterprise transitioned quickly to fulfilling its end of the corrupt bargain with Company A — passing nuclear bailout legislation,” Wetzel wrote.

It initially appeared that Householder lacked the votes to get bailout bill approved in the spring of 2019. A $9.5 million FirstEnergy-funded media campaign targeted House members' districts and tipped the scale in Householder and FirstEnergy's favor, according to the affidavit.

A House member described as Representative 7 reached out to FBI agents after he grew concerned about pressure from Householder to back the bailout. The lawmaker later was asked to delete text messages from Householder by someone connected to the speaker, according to the affidavit.

Once the House approved the bill, $7.4 million was spent on a pressure campaign to convince the Senate to follow suit. That worked, too, and Republican Gov. Mike DeWine signed the bill on July 29, the day the final version was approved by both chambers.

The final stage of the alleged conspiracy proved the most expensive: FirstEnergy affiliates through Generation Now spent $38 million to keep a referendum on the bailout off the ballot, according to the affidavit.

The dirty tricks campaign included hiring some of the largest signature-gathering firms in the country so that they couldn't work for Ohioans Against Corporate Bailouts, hiring people to gather signatures for fake petitions to sow confusion and intimidating legitimate signature collectors, according to the affidavit.

Most of the $38 million was spent on xenophobic commercials and mailings that rocked the state by warning that China would take over Ohio if the bailout was killed.

The citizen group failed to meet its Oct. 21 deadline to gather enough signatures and the measure remains law.

Wetzel, in the affidavit, hinted there is more to come in the probe.

"I have not included every fact known to me concerning this investigation,” Wetzel wrote. “I have set forth only the facts necessary to establish probable cause that federal crimes have been committed.”