CINCINNATI — A federal jury on Thursday found both former Ohio House Speaker Larry Householder and former Ohio Republican Party Chairman Matt Borges guilty of a single charge each of racketeering conspiracy.
The two were charged with being part of a years-long, $61 million scheme that traded political power for a $1.3 billion bailout of two nuclear power plants.
They could face 20 years in prison, although U.S. District Court Judge Timothy Black allowed them to remain free pending sentencing. Householder’s attorney said the case will be appealed.
“This is the first step,” Householder told reporters after the verdict. “This is a process. While I respect the decision of the jury, I don’t agree with it.”
Borges did not comment in the courtroom. Neither defendant showed emotion as the verdicts were read, although Householder was wearing a face mask at the time.
The jury in U.S. District Court was out for 9½ hours before delivering its verdict. It took six weeks for attorneys to walk it through a convoluted pipeline of nonprofit corporations and political action committees designed to hide that nearly all of the money admittedly came from utility giant FirstEnergy.
Despite the voluminous amount of evidence in what has been characterized as a $61 million bribery and money laundering scheme, the jury did not return to the courtroom to ask a single question.
“This is a victory for Ohioans,” U.S. Attorney Kenneth Parker said outside the federal courthouse in Cincinnati. “You cannot sell the public trust. ... It is not for sale. You cannot conspire with others to sell the public trust. ... We have a team in our office that will be relentless and that will hold you accountable.”
The prosecution has described the scheme as three phases: “Get the power, use the power, keep the power.”
“Get the power” meant electing state representative candidates in 2018 who would help return Householder as powerful speaker of the House in 2019, 14 years after term limits had forced him from office.
“Use the power,” the prosecution contends, meant passing House Bill 6, sought by FirstEnergy, to, among other things, enact the bailout of the nuclear plants then owned by subsidiary FirstEnergy Solutions, which was in bankruptcy at the time because those plants could not compete with cheaper and abundant natural gas.
“Keep the power” meant killing a petition effort that could have blocked the new law from taking effect by allowing voters to consider repealing it in 2020 and then by pushing voter approval of a constitutional amendment revising term limits so that Mr. Householder would not be forced to leave again for another 16 years.
Every step of the plan was successful — except for the term limits amendment that was interrupted when the racketeering arrests were made in July, 2020.
Householder said he did not regret making the decision to testify. During his cross-examination, the prosecution produced a digital photo taken by a cell phone that contained GPS data that appeared to directly contradict his testimony. He had denied being present at any of three dinners over two nights at two Washington steakhouses where a key witness said the scheme was first hatched.
But the photo and attached data appeared to place him inside a limousine with a then-FirstEnergy vice president, Michael Dowling, directly outside one of those steakhouses.
“I waited two and a half years to speak,” Mr. Householder said. “I agree with my attorney that it was the right thing to do. I wanted the opportunity to speak.”
Borges did not testify. His largest role occurred at the referendum phase, paying a $15,000 bribe to a manager on the repeal petition effort for inside information.
The defense had not disputed that most of the scheme happened but has maintained that the prosecution has misinterpreted politics and legislating as usual at the Ohio Statehouse as criminal activity.
The prosecution contends the conspiracy, or “The Enterprise,” crossed the line into criminal territory when Mr. Householder took a direct hands-on approach to the workings of Generation Now, the nonprofit financial pipeline created to funnel FirstEnergy cash, and when he, Mr. Borges, and other conspirators personally benefited from money the FBI says was siphoned off that pipeline.
Householder and Borges were accused of personally pocketing $514,000 and $366,000, respectively.
To find them guilty of racketeering conspiracy, the jury had to find:
• The Enterprise indeed existed.
• It engaged in interstate commerce, in this case by traveling across state lines in furtherance of the scheme and financial wire transactions.
• Householder, 63, and Borges, 50, were employed by or associated with The Enterprise.
• They knowingly conspired to further the scheme through “a pattern of racketeering activity,” which could include at least two acts of such acts as bribery, money laundering, depriving the public of the honest acts of a public official, and engaging in transactions involving money from illegal activity.
Two conspirators — political consultant Jeff Longstreth, creator of Generation Now, and Juan Cespedes, former FES lobbyist — pleaded guilty and testified for the prosecution in hopes of facing little or no prison time. Generation Now pleaded guilty as well.
FirstEnergy Corp. admitted it was the source of the bribes and paid a $230 million fine as part of a deferred prosecution agreement. No current or former executive or employee has been charged.
Mr. Parker declined to say whether any other indictments are coming. Householder attorney Steven Bradley said the defense did not try to subpoena testimony from FirstEnergy officials.
When reminded that Borges’ attorney had asked at one point in court, “Where is the briber?” Mr. Bradley said, “If I was sitting in that jury box, I would be asking that.”
Mr. Householder said he didn't have an answer when asked whether he would have been in this position if Ohio had stronger laws on the use of “dark money” in politics.
Victory over big corruption in Ohio. A jury in federal court found guilty and convicted Republican House Speaker Larry Householder and former Ohio Republican Party Chair Matt Borges of selling off the Ohio State House through bribery, conspiracy, racketeering, and wire fraud. pic.twitter.com/jWrrr975WL
— Marcy Kaptur (@RepMarcyKaptur) March 10, 2023
“This verdict has powerful implications for the rest of the country,” said Catherine Turcer, executive director of government watchdog Common Cause Ohio. “Citizens United may have opened the floodgates of corporate cash, but that doesn’t mean that pay-to-play is legal or right. The trial revealed how essential basic disclosure is and the importance of being able to follow the money. Transparency provides guardrails so that Ohioans cannot be taken advantage of.
“Today, we celebrate the powerful facing consequences for their lust for power and greed,” she said. “Tomorrow, we begin to repair our broken campaign finance system so this never happens again.”
In reaction to the convictions of two people who were once among the most prominent Republicans in the state, state GOP spokesman Dan Lusheck said, "Public corruption should never be tolerated by any party in Ohio. Hopefully, this verdict serves as a warning to other bad actors who may be considering breaking the public's trust.”
The office of Gov. Mike DeWine, who signed House Bill 6 into law, declined to comment.
Earlier this week, it was announced that Energy Harbor, the post-bankruptcy successor to FES, will be acquired by Texas-based Vistra for $3.4 billion, including absorption of FES debt.
A fifth defendant, Columbus lobbyist Neil Clark, killed himself in 2021.
First Published March 9, 2023, 7:02 p.m.
