Householder investigation: the nuts and bolts


By Marc Kovac - The Columbus Dispatch



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COLUMBUS, Ohio — The arrest of Ohio House Speaker Larry Householder and four others Tuesday involved $60 million, a racketeering and bribery investigation, a nuclear plant bailout and one of the largest money laundering cases in the state’s history.

There are many moving parts to the complicated investigation. Here are the basics:

Secret Investigation: The federal investigation was launched about a year ago and eventually included secretly taped conversations, bank statements, text messages and other documents to show scope of the complex conspiracy.

“It was a very covert investigation,” said U.S. Attorney David DeVillers. “I am not going to get into the means of our investigation, but it was critical that we, as the U.S. Attorney’s Office and the FBI, kept this a secret. … It has now changed. We are not done with this case. There are things we couldn’t do before, people we couldn’t interview, people we couldn’t subpoena, documents we couldn’t subpoena, search warrants we couldn’t execute… As of this morning, there are a lot of FBI agents knocking on a lot of doors asking a lot of questions, serving a lot of subpoenas, executing a lot of search warrants.”

Company A: The company involved is not named but is obvious from reading the criminal complaint which directly quoted the company’s “president and CEO” from a 2016 earnings conference call. A simple Internet search connects the comments to FirstEnergy President and CEO Chuck Jones.

The Alleged Scheme: The company’s efforts to sway public policy came at the same time Householder was working to retake the Speaker’s seat, which he held from 2001-04.

Federal investigators say Householder, through longtime associate Jeffrey Longstreth, formed Generation Now to funnel money from Company A to his efforts to regain his leadership post and move a billion-dollar bailout bill.

Company A directed $61 million to the nonprofit over a three-year period. The funds were then used to back Householder-supporting legislative candidates so that he could secure the Speaker’s seat, for advertising to build support for HB 6, and to ensure opponents did not gain sufficient signatures in their attempt to overturn the resulting state law changes.

Dark Money: As a 501(c)(4), Generation Now did not have to disclose its donors and was free of regulation by the Federal Election Commission.

It was supposed to focus its efforts on social welfare and was not supposed to financially benefit a shareholder or individual or engage primarily in political activities or campaigns, DeVillers said.

“Not a dime of the money, the $61 million, that was filtered to Generation Now by Company A went to any (social welfare causes). There were no members that donated … $61 million was donated completely by Company A….”

The Candidates: Investigators said Generation Now used funds from the company to support 15 candidates in the 2018 primary (including Householder) and six others in the general election to ensure sufficient votes for Householder to win the Speaker’s seat.

“The first thing they had to do was build Team Householder,” DeVillers said.

Generation Now paid more than $1 million in the fall of 2018 alone “to flood the airways with negative ads against” Householder’s opponents. All of the individuals in Team Householder that were funded by Company A, via Generation Now, all voted for Larry Householder to be Speaker of the House.

HB 6: Most of the money that was funneled through Generation Now was used for campaign ads and other efforts to ensure passage and ultimate enactment of the nuclear bailout legislation that included a monthly charge on all Ohioans’ energy bills to subsidize the company’s two failing nuclear power plants.

More than $38 million was paid from company-controlled accounts to Generation Now after the legislation was approved to block opponents’ efforts to place the law before voters.

DeVillers said the money was used to block signature-gathering as part of the ballot initiative, including paying firms not to participate in the petition efforts.

What’s Next: A preliminary hearing for Householder was set for Aug. 6 at 1:30 p.m., via video conferencing, before Magistrate Judge Karen L. Litkovitz, who is based in federal court in Cincinnati.

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By Marc Kovac

The Columbus Dispatch

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