COLUMBUS — The nonprofit corporation at the heart of a $61 million Statehouse bribery scandal pleaded guilty Friday to a federal racketeering charge and forfeited its remaining assets.
Generation Now is the third defendant to plead guilty following indictments that targeted a total of six, including former House Speaker Larry Householder (R., Glenford).
The corporation was created to shield the source of money in a scheme to elect state representatives loyal to Mr. Householder, get him elected speaker at the start of 2019, pass a $1 billion bailout of two nuclear power plants on Lake Erie, and kill an attempt to subject that law to voter referendum.
Although the federal indictment doesn't mention it by name, Akron-based FirstEnergy Corp. and related entities are believed to have been the scheme’s primary financial backers.
The deal was signed with U.S. Attorney David DeVillers’ office by Jeffrey P. Longstreth, a political strategist and close Householder adviser who had already pleaded guilty for his personal role in the scheme. He was a signatory in the creation of Generation Now bank accounts and played a role in transferring money between accounts.
As part of the deal, the corporation admits that it “knowingly conspired to participate in the affairs of the enterprise through a pattern of racketeering activity.”
The deal notes that the federal government has already seized Generation Now's assets. A corporation can't be jailed, but it has agreed as part of the deal to forfeit any interests it had in furthering the scheme, including nearly $1.5 million it had in two bank accounts. That’s a small fraction of the money alleged to have flowed through it.
In addition to Mr. Longstreth, Columbus lobbyist Juan Cespedes has pleaded guilty to racketeering. Each faces up to 20 years in prison.
Among Mr. Cespedes' clients was FirstEnergy Solutions, a former subsidiary of FirstEnergy Corp. and the former owner of the Davis-Besse nuclear power plant near Oak Harbor and the Perry plant east of Cleveland. Energy Harbor emerged as the plants’ new owner following bankruptcy proceedings.
Still facing racketeering charges for their alleged roles in “The Enterprise” are Mr. Householder, powerful Columbus lobbyist Neil Clark, and lobbyist and former Ohio Republican Party Chairman Matt Borges.
Catherine Turcer, executive director of watchdog Common Cause Ohio, noted lawmakers have yet to close the loophole in state campaign-finance law that allowed the scheme to operate.
“While the extent of the bribery scheme is not known, it is clear that House Bill 6 resulted from corruption and must be repealed,” she said. “It's also clear that Ohio must ban the kind of money used to facilitate this scheme.
“Transparency is closely tied to accountability, and it is time for the Ohio General Assembly to shine a light on dark money in politics so that secret money is never used again to take advantage of consumers,” she said.
Lawmakers so far have not decided the fate of House Bill 6, which was to impose surcharges on Ohio consumers' monthly electric bills to fuel an annual $150 million subsidy for the two nuclear plants. Together, the plants directly employ about 1,400.
Some of the pressure was taken off in late December when a Franklin County judge issued a preliminary injunction to put the surcharges on hold at least temporarily.
FirstEnergy also agreed this week to forgo about $102 million it could have collected this year as a result of a separate “decoupling” provision included in House Bill 5. That provision would have locked in the corporation's profits regardless of what happened in the electricity marketplace.
Meanwhile, Mr. Householder remains an Ohio House of Representatives member after his Nov. 3 re-election from his largely rural district east of Columbus. His colleagues removed him as speaker last summer but have not acted to force him from the chamber.
“There isn't any timetable,” current House Speaker Bob Cupp (R., Lima) said Wednesday. “We're still consulting with members... My personal position is the honorable thing for him to do is to resign.”
While he continues to vote on the floor, Mr. Householder has not been given any committee assignments for the current legislative session.
First Published February 5, 2021, 5:36 p.m.