COLUMBUS — Federal prosecutors are seeking to block former Ohio House Speaker Larry Householder's attempt to use federal campaign finance law as a defense as he fights a racketeering charge for his alleged role in a $61 million bribery scheme.
U.S. Attorney Kenneth Parker's office has asked a federal judge to limit the testimony of an expert who it contends will suggest to the jury that other politicians — like U.S. Senate Majority Leader Chuck Schumer (D., N.Y.) and Minority Leader Mitch McConnel (R., Ky.) — have used the campaign finance system to advance their leadership aspirations without prosecution.
Mr. Householder is expected to face trial in January in connection with the dark-money scheme that Akron-based FirstEnergy Corp. has admitted it largely financed. He and lobbyist and former Ohio Republican Party Chairman Matt Borges are accused of conspiring, for personal gain, to get a $1 billion consumer-financed bailout of two Lake Erie nuclear power plants owned at the time by a FirstEnergy subsidiary, to Gov. Mike DeWine's desk.
Both have pleaded not guilty, although others involved in the scheme, including FirstEnergy itself and the non-profit corporation conduit, have either entered guilty pleas or made deals in which they admitted their roles.
The campaign finance expert, prosecutors claim, is expected to try to make the case that the use of non-profit corporations and political action committees to finance political aspirations has become “commonplace” among politicians.
“To be clear, the defendants are not charged with any campaign finance or regulatory violations,” reads the motion seeking to block part of the expected testimony from Caleb Burns, a Washington-based attorney. “Rather, this is a racketeering case, where the grand jury charged the defendants with conspiring to conduct and participate in the affairs of an enterprise through a pattern of racketeering activity...”
Mr. Householder is accused of heading a scheme to hide the FirstEnergy cash and use it to help elect Republicans to the Ohio House of Representatives in 2018 who, in turn, would support his return to the speaker's podium in 2019.
After that was accomplished, he is accused of using his new clout to get House Bill 6, the nuclear bailout law, across the finish line and then kill a petition effort that would have subjected that controversial law to a voter referendum in 2020. He also allegedly used some of the money for personal gain, including repairs to a Florida house he owned.
Mr. Householder has indicated that Mr. Burns would testify about the use of non-profits, PACs, and sources of private money as part of the federal campaign finance system to support candidates in anticipation that they would support a leader's aspirations. He would cite PACs associated with Mr. Schumer and Mr. McConnell as examples.
“Defendant Householder plans on presenting evidence through Mr. Burns that other public officials have engaged in 'x' conduct, and because they have not been prosecuted, Householder's conduct must therefore be legal and/or his prosecution is unfair,” the U.S. Attorney argues.
That, it argues, is irrelevant to the question of whether Mr. Householder conspired in a bribery scheme. It could also distract and confuse the jury, it said.
“..by presenting evidence suggesting other public officials engaged in similar behavior but were not indicted, it wrongly suggests to the jury that defendants here are being prosecuted improperly,” Mr. Parker's motion reads.
It also noted that the non-profit used in Ohio's bribery scheme was not a PAC, much less a leadership PAC.
Jeffrey P. Longstreth, a political strategist and Householder ally, and Juan P. Cespedes, a Columbus lobbyist, have admitted their roles in the scheme and pleaded guilty to racketeering charges that could carry 20 years in prison.
Generation Now, the Longstreth-controlled non-profit through which FirstEnergy's hidden money flowed also pleaded guilty. Another defendant, powerful Columbus lobbyist Neil Clark, committed suicide in Florida in early 2021.
FirstEnergy, as part of a deferred prosecution deal in which it has cooperated with investigators, agreed to pay a $230 million penalty for “honest services wire fraud.” It admitted that it bribed both Mr. Householder and the former chairman of the Public Utilities Commission of Ohio, Sam Randazzo.
A DeWine appointee, Mr. Randazzo, has insisted he did nothing wrong and has not been criminally charged.
On a related note, a three-judge panel of the 10th District Court of Appeals in Columbus unanimously on Tuesday reversed a 2021 lower court ruling allowing Attorney General Dave Yost to freeze $8 million in Randazzo assets in connection with the scandal.
The appeals court found that a Franklin County Common Pleas Court judge erred when he decided that the attorney general had shown the state would suffer “irreparable injury” by raising concerns that Mr. Randazzo could sell or transfer those assets to put them beyond the state's reach. The lower court judge should have first given Mr. Randazzo a hearing.
“...there was no evidence that would have permitted the trial court to find irreparable injury predicated on a 'present danger' that the property sought to be attached would be immediately disposed of, concealed, or placed beyond the jurisdiction of the court...,” the appellate panel said. The court also questioned where the state came up with an $8 million figure.
Provisions of House Bill 6 seen as directly benefiting FirstEnergy, including a “decoupling” provision designed to lock in utility profits, have since been repealed by lawmakers. But other provisions remain in place, including the rollback or elimination of renewable power and energy efficiency mandates and consumer-financed subsidies for two 1950s coal-fired power plants in southern Ohio and eastern Indiana owned by a consortium of utilities.
Mr. Householder was removed as speaker by his fellow lawmakers soon after the indictments were announced, but, unopposed on the ballot in his Perry County district, he went on to be re-elected to his House seat. He was later removed from the House altogether.
First Published September 28, 2022, 3:38 p.m.
