The $60 million bribery and racketeering enterprise that preserved two Ohio nuclear plants was a complex, convoluted, and totally corrupt endeavor, according to the criminal complaint the FBI filed in the U.S. District Court for the Southern District of Ohio July 16. While the FBI arrested four Ohio politicos, including Republican House Speaker Larry Householder, the key to the racket was a dark money, fake organization he and others, perhaps Akron-based investor-owned utility FirstEnergy, set up called Generation Now.
Generation Now, as the 82-page criminal complaint alleges in detail, took in some $60 million from FirstEnergy and its subsidiary companies, it order to get Householder elected speaker, then to pass HB 6, the law giving the utility some $1.3 billion in subsidies to keep the uneconomic Davis-Besse and Perry nuclear plants running, and finally to defeat a ballot initiative that would have overturned the law.
The Dayton Daily News reported in May 2019 that in the referendum Generation Now, “a secretive political money group, is bankrolling the ad campaign, Federal Elections Commission records show.”
The complaint names not only Householder, close aide Jeffrey Longstreth, Republican power broker Matthew Borges, and lobbyists Neil Clark and Juan Cepedes, but Generation Now. The charges are brought under 18 U.S. Code §§ 1961-1965, the Racketeer Influenced and Corrupt Organizations Act.
According to the FBI, from March 2017 to March 2020, the Householder controlled “enterprise,” including the named defendants, got about $60 million from FirstEnergy (described in the complaint as “Company A”), “paid through Generation Now and controlled by Householder” and is criminal enterprise. The evidence includes not only bank records and telephone logs, but, clearly, although not specified, wire taps on phones.
Generation Now was established under Internal Revenue Service rules as a 501(c)(4) tax-exempt social welfare organization. According to the IRS, “To be tax-exempt as a social welfare organization described in Internal Revenue Code (IRC) section 501(c)(4), an organization must not be organized for profit and must be operated exclusively to promote social welfare. The earnings of a section 501(c)(4) organization may not inure to the benefit of any private shareholder or individual.” The key for the Householder operation, the FBI alleges, is that “pursuant to federal law, the names and addresses of contributors to 501(c)(4)s are not made available for public inspection.”
According to the FBI, Clark said “in a 2019 recorded conversation” that the organization was Householder’s bank. “Generation Now is the speaker’s (c)(4)” and access to FirstEnergy’s money was “unlimited.”
The FBI said Householder used FirstEnergy money to “help enact the bailout legislation. Additionally, the Enterprise used millions of dollars” of the company’s “bribe money to further Householder’s political ambitions by funding his own campaign, and the campaigns of members and candidates would eventually support Householder’s election for Speaker….The defendants also paid themselves personally millions of dollars” in FirstEnergy “bribe payments, funneled through Generation Now and other entities controlled by the Enterprise.”
As part of the scheme, according to the feds, the conspirators created a number of other organizations to obscure the money laundering.
These include:
* JPL & Associates LLC, Longstreth’s firm. “Bank records show numerous internal money transfers of Generation Now money among Longstreth-controlled accounts,” including one personal account.
* PAC, a political action committee, used “during the May 2018 primary as a way to conceal the source of media buys for Team Householder candidates.”
* Dark Money Group 1, used to “conceal the source of media buys during the 2018 general election,” similar to PAC.
* Front Company, “a pass-through entity” to fund the campaign against the referrendum.
The detailed nature of the FBI complaint leads to several questions.
* Will Republican Gov. Mike DeWine, who supported the bailout and signed it into law, try to get it repealed? While he has called from Householder to resign or be kicked out, he’s not said anything about the bailout itself.
* Will FirstEnergy and its subsidiaries and controlled companies be charged? That seems likely but nothing has happened so far. It is possible that FirstEnergy is cooperating with the government in return for legal favors.
*What’s rotten with the nation’s largest investor-owned utilities? As this blog reported a day before the Householder et al arrests, Chicago’s Commonwealth Edison admitted it had bribed the Democratic Speaker of the Illinois House, Michael Madigan, and would pay a $200 million fine.
— Kennedy Maize