CINCINNATI — Efforts by former Ohio House Speaker Larry Householder and lobbyist Matt Borges to recruit Republican Attorney General Dave Yost’s help in scuttling an effort to subject the nuclear bailout law they'd worked so hard to pass to possible voter repeal apparently fell apart over the opposition's heavy-handed tactics toward petition circulators, testimony in federal court revealed Monday.
“Dave let me have it with both barrels tonight...,” Mr. Borges told Columbus lobbyist Juan Cespedes in a text message read in court. “He used specific example of woman surrounded and followed all the way to London and had to pull into a police station...Says he can't believe our people brought these tactics to Ohio.
“...Bottom line he is very jaded about our efforts now...,” Mr. Borges texted. “We should have seen this coming. We should not expect him to be helping us right now.”
Prior testimony had revealed that Mr. Borges, a former Yost campaign manager and former Ohio Republican Party chairman, had hoped to get the attorney general to either reject petition summary language submitted by Ohioans Against Corporate Bailouts, the group seeking to repeal House Bill 6, or determine that the subsidies contained in the law were in fact a tax that would shield it from a voter referendum.
Mr. Yost did reject the language on first pass but approved it after it was revised and resubmitted. Ultimately, the referendum effort claimed in litigation that the delay contributed to it running short of time to gather the required signatures.
There were earlier signs that the attempts to get Mr. Yost on board were not working.
“Yost mtg did not go great,” Mr. Borges told Cespedes in another text conversation. “Definitely in a defensive posture and he cut our meeting short.”
Another text message in November, 2019, brought up Secretary of State Frank LaRose. He chairs the Ohio Ballot Board, which would have reviewed the language for the ballot if the petitions had gotten that far. There were concerns that he might be asked to recuse himself from consideration of the issue because of “conflicts.”
“LaRose wants to meet [the FirstEnergy Solutions] team,” Mr. Borges told Cespedes. “Can we talk about putting something together?”
Cespedes replied, “We can easily do that.”
Mr. Borges said Mr. LaRose “told me he wants to get to know Kiani, and I said, 'Are you sure about that?'”
Mr. Cespedes: “He will live to regret that.”
John Kiani is now executive chairman of FES' bankruptcy successor Energy Harbor, owner of the Davis-Besse nuclear power plant near Oak Harbor and the Perry plant east of Cleveland. Cespedes was a lobbyist for FES. Cespedes has pleaded guilty to racketeering and is expected to testify for the prosecution.
Mr. Householder and Mr. Borges could face 20 years in prison if convicted of federal racketeering conspiracy charges. They are accused of engaging in bribery and money laundering as part of a scheme to return Mr. Householder to the speaker's podium so that he could help steer passage of the nuclear plant bailout. FirstEnergy has admitted to putting up the $61 million that flowed through a tax-exempt, nonprofit corporation, Generation Now, that did not have to publicly disclose the source of its funding.
The money was used to elect state representatives loyal to Mr. Householder in 2018 and get him elected speaker in 2019. The prosecution contends that Mr. Householder then made good on his end of the deal by getting House Bill 6 across the finish line when prior attempts had failed.
The scheme is then supposed to have continued to kill a petition effort to allow voters to consider repealing the law. If the petitions had been successfully filed, the law would have been put on hold for more than a year before voters could weigh in in 2020.
Testimony on Monday turned to Mr. Borges' alleged role in seeking to thwart the referendum.
Tyler Fehrman, hired by the pro-referendum side, went to the FBI. He later handed agent Blane Wetzel a $15,000 check that he said Mr. Borges had given him to buy inside information on the opposition.
Mr. Fehrman then recorded follow-up phone calls with Mr. Borges with the help of the FBI. Struggling financially, he said Mr. Borges had offered to help.
“I want to help you,” Mr. Borges told him in one conversation. “Obviously, you can trust me. And I don't even think you're harming the effort. I'm not asking you to sabotage their effort. I'm not asking you to be a spy.”
Mr. Borges was suspicious when Mr. Fehrman called him back to revisit their prior conversation.
“You're not trying to set me up here, are ya?” he asked. Later he said, “It would be bad for both of us if the story came out, but it would be worse for you....You creeped me out when you called me a little bit ago. I'm going to think about this.”
But text conversations continued, and they then met in person at a Columbus area Starbucks. The latter conversation was recorded by Mr. Fehrman while the FBI, unknown to both, also took video of the meeting.
Mr. Borges wanted information on the petition effort's signature counts, hiring, problems holding onto petition circulators, and the locations of circulators. He followed up with similar questions in later conversations.
Mr. Wetzel provided evidence that a private investigation firm was hired to follow referendum petition circulators, including placement of GPS devices on their vehicles. They were also surveilling Mr. Fehrman.
When the group behind the referendum effort sued to get more time to gather signatures, Mr. Fehrman worried aloud on a call with Mr. Borges that he could be called to the stand and potentially get a question about being paid off as some petition circulators had been to drop their petitions and go home.
“I'd never suggest anyone lie under oath, but you don't have to, because that's not the understanding we came to,” Mr. Borges said.
There was no confidence that the law could survive a repeal vote.
“If it makes the ballot, it's kind of over as far as they're concerned,” Mr. Borges said. “...The only chance they have is to make sure the thing never makes the ballot.”
Mr. Wetzel said Mr. Fehrman was paid $1,000 “for his time” when his role in the investigation was completed.
“He was surprised and maybe a little taken aback,” he said.
Mr. Fehrman never asked to keep the $15,000 from the check that was cashed, he said. That money was turned over to the FBI.
Monday marked the sixth day that the prosecution has used Mr. Wetzel to try to lay the groundwork for the case, using emails, text messages, undercover recordings wiretaps, and phone, computer, and bank records. His cross-examination is set to begin on Tuesday.
Political strategist and long-time political ally Jeff Longstreth has pleaded guilty to racketeering and will testify. Generation Now, with Longstreth as its officer, also pleaded guilty. Through a deferred prosecution agreement, FirstEnergy paid a $230 million fine and admitted its role as the primary banker of the scheme.
Another defendant, Columbus lobbyist Neil Clark, committed suicide in 2021.
First Published February 6, 2023, 4:57 p.m.
