CINCINNATI — “Where’s the briber?” a defense attorney asked early on in the federal racketeering trial of former Ohio House Speaker Larry Householder and former Ohio Republican Party Chairman Matt Borges.
Except for a FirstEnergy Corp. treasurer who described how the company and its subsidiary were “bleeding cash” and were desperate for a bailout of two uncompetitive Lake Erie nuclear power plants, no one from the companies at the center of a $61 million bribery and money laundering scandal have testified.
The jury was not told during testimony or during the judge’s instructions on Monday that the Akron-based utility admitted it was the secret primary banker of the scheme designed to ultimately secure a $1.3 billion, consumer-financed bailout or that it paid a $230 million fine as part of a deferred-prosecution agreement.
Final arguments are expected to take up most of Tuesday, so deliberations may not begin until Wednesday.
The trial continued on the same day that the purchase of Energy Harbor, the current owner of those nuclear plants, was announced by Vistra Corp. The company is paying $3.43 billion for the post-bankruptcy successor to FirstEnergy Solutions.
U.S. District Judge Timothy Black on Monday read 72 pages of instructions to jurors on what they should and should not consider as they deliberate the fate of two men who were once among the most politically influential in the state.
Mr. Householder, 63, and Mr. Borges, 50, are accused of conspiring as part of a larger “dark money” racketeering scheme designed to first rebuild Mr. Householder’s political power base so that he could return as the powerful Speaker of the House in 2019. The prosecution contends that Mr. Householder then delivered House Bill 6, the bailout law, that the scheme’s chief banker wanted.
The bribery and money laundering scheme then shifted, with Mr. Borges allegedly playing his most significant role, to killing a referendum effort that could have allowed voters to repeal the law in 2020.
Two other individuals pleaded guilty to racketeering and testified for the prosecution — Jeff Longstreth, the Columbus political consultant who said Mr. Householder made him the “quarterback” on the play, and Juan Cespedes, a lobbyist brought in by FES. Both hope to get little to no prison time compared with the 20 years Mr. Householder and Mr. Borges could face.
Generation Now, the tax-exempt nonprofit corporation that served as the primary conduit for the cash, also pleaded guilty.
The prosecution has presented extensive evidence of the roles played by Chuck Jones, then FirstEnergy’s CEO; Michael Dowling, then a corporate vice president; and John Kiani, then with FES and now executive chairman of Energy Harbor. The two companies provided nearly all of the money funneled through Generation Now and other entities to hide the true source of the funds.
But while the first two executives lost their jobs, no one within FirstEnergy has been criminally charged.
“Some of the people may not be on trial here,” Judge Black told the jury. “There’s no requirement that all members of a conspiracy be prosecuted and tried together in one proceeding.”
Judge Black said he has withheld information from the jury as he may have overruled lawyers’ attempts to bring it up.
“You must completely ignore all these things,” he said. “Don't even think about them. ...These things are not evidence.”
To convict on the single racketeering conspiracy charge, the jury must be convinced beyond a reasonable doubt that an enterprise existed and that each defendant participated in that enterprise “with other named and unnamed entities.” The scheme must also have affected interstate or foreign commerce, and the defendant must knowingly have conspired in a “pattern of racketeering activity.”
The jury has also heard extensively about Neil Clark, the Columbus lobbyist who was the fifth individual charged. Jurors have heard his voice through recordings obtained by undercover FBI agents as part of a separate investigation in which he boasted of being Mr. Householder’s “proxy” and encouraged agents to contribute to Generation Now to curry favor with the speaker on their supposed sports-betting issue.
The jury was not told during the trial or by Judge Black through his instructions that Mr. Clark committed suicide two years ago in Florida with his racketeering charge still pending.
While aware of all the political maneuvering around House Bill 6, the jury was told not to consider whether it was good policy.
“This is not about energy policy in Ohio,” Judge Black said. “Whether you think House Bill 6 is good or bad legislation is not at issue. ...Whether the defendants would have supported House Bill 6 regardless [of a racketeering conspiracy] is not a defense.”
Mr. Householder last week testified that the law was needed to save the Davis-Besse nuclear power plant near Oak Harbor and the Perry plant east of Cleveland and to preserve Ohio-generated, carbon-free power. The bill also had the backing of labor unions, many Republican and Democratic lawmakers, and school districts and governments dependent on tax revenue from the plants.
“It was good for Ohioans,” Mr. Householder said. “It was good for Ohio jobs. It was good for Ohio’s economy. It would finally save plants. You know, we’ve lost plants for years.”
The prosecution, however, countered that the bailout and other elements seen as benefiting FirstEnergy in House Bill 6 were later repealed by lawmakers after the scandal. Yet the power plants are still operating and are about to be sold.
The use of secretive “dark” or “soft” money in politics is not illegal in Ohio, as evidenced by the dropping of the names of other prominent Ohio politicians who have also benefited from it. Mr. Householder's defense team has tried to present this as no different.
“Typical campaign contributions are not unlawful,” Judge Black said.
But the prosecution contends that Mr. Householder and Mr. Borges personally pocketed $514,000 and $366,000, respectively, from what FirstEnergy has described as bribes.
Mr. Borges is accused of paying a $15,000 bribe for inside information to a political consultant hired by the petition effort seeking to subject the unpopular House Bill 6 to a voter referendum. That consultant went to the FBI.
Judge Black instructed the jury that undercover agents and informants are permitted to engage in some deception as part of obtaining recordings. The prosecution was concerned that the defense was trying to use that deception by Tyler Fehrman, the pro-referendum employee, to challenge his credibility on the stand.
First Published March 6, 2023, 10:19 p.m.
