Larry Householder was convicted of corruption. But there’s plenty of unfinished business still left in the House Bill 6 scandal

COLUMBUS—Even though a federal jury found ex-Ohio House Speaker Larry Householder guilty of a federal corruption charge Thursday, a number of issues remain unresolved in the House Bill 6 scandal.

There are still multiple ongoing investigations into the scandal, in which Akron-based FirstEnergy has admitted to paying millions in bribes to secure the passage of the 2019 energy law. Among other perks for FirstEnergy, HB6 gave a since-repealed $1 billion-plus ratepayer bailout to two nuclear power plants owned at the time by a FirstEnergy subsidiary.

FirstEnergy itself agreed to pay a $230 million fine, and two others – ex-Householder political aide Jeff Longstreth and HB6 lobbyist Juan Cespedes – pleaded guilty to their roles in the scheme. Householder and former Ohio GOP chairman Matt Borges, his co-defendant, both were found guilty of racketeering on Thursday.

However, so far, no one else connected to the scandal has been accused of any wrongdoing, including any current or former FirstEnergy officials who approved the payments.

Householder himself isn’t out of the woods yet, either, as there’s still a pending Ohio Ethics Commission case into his use of campaign funds to pay for his legal defense.

It also remains to be seen what action, if any, authorities decide to take against former Public Utilities Commission of Ohio Chair Sam Randazzo, whom FirstEnergy also admitted to bribing but maintains his innocence and hasn’t been charged with any crime.

Here’s more on the loose threads that remain in the HB6 scandal.

Yost’s civil lawsuit

After Householder’s arrest, Attorney General Dave Yost filed a civil lawsuit seeking unspecified damages against major figures in the HB6 scandal, including Householder, FirstEnergy, and ex-FirstEnergy executives Chuck Jones and Mike Dowling.

The lawsuit, joined by the cities of Columbus and Cincinnati, scored an initial victory, as it led to a judicial order in late 2020 blocking the state from starting to collect the bailout fee from electricity customers (the order remained in place until the bailout was repealed months later).

However, that lawsuit has been on hold, even though Yost has asked Franklin County Common Pleas Judge Chris Brown four times to resume it — most recently on Thursday, following the guilty verdicts against Householder and Borges. Brown didn’t respond to the first three requests to resume proceedings in the case.

“Lifting the stay will allow us to continue collecting documents and to depose key witnesses in our ongoing effort to remedy the harm done,” Yost said in a statement.

Sam Randazzo

Besides Householder, FirstEnergy also admitted in its deal with prosecutors that it bribed Sam Randazzo, who chaired the Public Utilities Commission of Ohio, which regulates FirstEnergy and other Ohio utilities.

Randazzo, a longtime Columbus utilities lawyer, was paid $22 million by FirstEnergy for consulting work over a decadelong span, including a $4.3 million payment made shortly before Randazzo became PUCO chair in February 2019. FirstEnergy said that latter payment was a bribe.

As PUCO chair, Randazzo was involved with writing HB6, and he worked behind the scenes to hinder efforts to fully repeal it after Householder’s arrest. He also overruled PUCO commissioners and staff to secure policies that helped FirstEnergy, according to a text message from Jones.

Yost added Randazzo as a defendant in his civil suit in 2021. As part of that case, Yost convinced a Franklin County court to freeze $8 million of Randazzo’s assets, citing evidence that Randazzo was trying to sell or transfer property. However, an appeals court overturned that order; it’s now up to the Ohio Supreme Court to rule on it.

FirstEnergy shareholders lawsuits

Following Householder’s arrest in July of 2020, FirstEnergy shareholders filed two civil lawsuits –one seeking for the company to be paid by an insurer for FirstEnergy executives, and the other one led by the Los Angeles County Employees Retirement Association (or LACERA).

In the first lawsuit, FirstEnergy and the investors suing the company agreed to a proposed $180 million settlement. However, while one federal judge has approved the deal, it still needs to be approved by a second judge.

That second judge, U.S. District Judge John Adams, previously asked why the $180 million figure was so low given FirstEnergy could lose billions; he also demanded to know from the plaintiffs’ attorneys “Who paid the bribes?” (the attorneys eventually responded that it was ex-FirstEnergy executives Chuck Jones and Mike Dowling).

The other investor lawsuit, a class-action suit led by the Los Angeles County Employees Retirement Association, is also still pending.

PUCO investigations

The PUCO has four pending investigations into various parts of the HB6 scandal. Though some of those probes revealed some significant initial findings, they were all put on hold last August at the request of federal prosecutors, saying they could interfere with the federal HB6 criminal investigation.

On Wednesday, as the federal jury deliberated before delivering a guilty verdict, the PUCO announced it decided to pause the investigations for another six months, at least.

One investigation audit released last year found that even though FirstEnergy collected hundreds of millions of dollars from utility customers in the name of using it to modernize its electric grid, there was no evidence that the money led the Akron-based utility to spend more on grid modernization. In fact, the audit revealed, FirstEnergy didn’t track how the money was spent, so auditors couldn’t tell whether any of it was spent on HB6 lobbying.

A second audit released in September 2021 concluded that FirstEnergy needed to do more to comply with state corporate separation rules and split two other subsidiaries – FirstEnergy Home and FirstEnergy Advisors – into separate organizations.

A third audit from August 2021 recommended that FirstEnergy return $6.6 million collected from ratepayers because it was used for questionable payments – mostly to entities associated with prominent Cleveland businessman Tony George.

In December 2021, the PUCO ordered a probe into whether Randazzo broke Ohio law by not disclosing more than $13 million paid to his companies by FirstEnergy over several years.

SEC investigation

In September 2020, the U.S. Securities and Exchange Commission started a still-ongoing investigation into FirstEnergy over the HB6 scandal.

About a month after the investigation became public, a FirstEnergy consulting employee claimed in federal court that he was fired for assisting with the probe.

The SEC investigation has mostly been quiet since then, though investigators issued a new subpoena to FirstEnergy last summer. FirstEnergy has said it “believes that it is probable that it will incur a loss in connection” with the investigation’s eventual conclusion.

Householder and the ethics commission

In the fall of 2020, Yost filed a complaint with the Ohio Ethics Commission claiming that Householder broke state law by spending nearly $1 million of his campaign funds on his legal defense. The commission has ruled in the past that state officials cannot pay for legal work in a criminal defense case using money from their campaign account.

However, as with other investigations, the Ohio Ethics Commission has decided to halt proceedings in the case until Householder’s trial is over.

Improperly spending campaign money on personal expenses is a first-degree misdemeanor, punishable by up to 180 days in jail and a $1,000 fine.

Householder could potentially also be in trouble for receiving more than $400,000 from Longstreth to fix up his vacation home in Florida. Prosecutors claim it was bribe money, but Householder claims that the money was a loan from Longstreth.

Even if Householder is right that it was a loan, he never reported the payment on his legislative ethics disclosure forms, as he is required to. So far, no complaints have been filed with the state over the matter.