facts we know about the Larry Householder corruption investigation

Larry Householder corruption investigation

We break down the Householder investigation.

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…”

There’s likely more to come in the case, with investigators urging anyone with any information to contact the FBI’s tip line at 614-849-1777.

“It has now changed from a secret investigation to an overt investigation,” DeVillers said. “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.”

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Company A: The company involved is not named but is obvious from reading the criminal complaint.

“Everyone in this room knows who Company A is,” DeVillers said. “I will not be mentioning the name today because of our regulations and rules. They have not, and no one from that company, has as of yet been charged.”

But the criminal complaint includes references to the company’s annual shareholders report in 2016, the grim outlook at the time for nuclear generation and its efforts to seek a “legislative solution” to continue operations of its two affiliated nuclear power plants in Ohio.

And it 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….”

In recorded conversations referenced court documents, Neil Clark, one of the five men included in Tuesday’s criminal complaint, noted the secret nature of the nonprofit setup, saying “Nobody knows the money goes to the Speaker’s account. It is controlled by his people, one of his people, and it’s not recorded.”

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.

According to court documents, 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. Ultimately, only one voted against HB 6.”

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, according to court documents.

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A total of $9.5 million was wired from the company to Generation Now in April and May 2019, after the legislation was introduced and pending before lawmakers, according to documents.

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.

Warnings: The investigation was under way prior to final passage of HB 6.

For example, one unnamed lawmaker, identified in documents as “Representative 7,” told investigators that Householder worked to secure his vote for passage of HB 6. That representative also relayed frequent contact with Clark, who “warned him not to vote against HB 6,” according to court documents. “Clark told Representative 7 that people who vote against Householder lose a lot, including committee chairmanships, caucus financial aid and that their legislation may not continue to legislative progress. Representative 7 … was unsure if the information from Clark was meant to be a threat from Householder… or if it was a warning from a friend.”

Cooperative: Chris Hoffman, special agent in charge of the FBI’s Cincinnati field office, said Householder was “very cooperative” when taken into custody Tuesday.

“Actually, a couple of the agents that were there said he acted as a gentleman and did not resist,” he said. “He was Mirandized. There was no statement….”

Campaign finance violations: Republican Secretary of State Frank LaRose submitted a complaint to the Ohio Elections Commission on Tuesday afternoon, alleging 19 violations of the state’s campaign finance laws connected to the federal case.

Named in the referral were Householder, his campaign committee, the Ohio House Republican Caucus/House Republican Campaign Committee, and others, alleging the illegal conversion of campaign funds for personal use, acceptance of direct corporate contributions, failure to file complete and accurate campaign finance statements and other violations.

“For those of us who answer the call to public service with a sincere desire to be good stewards of the public trust, today is deeply disappointing,” LaRose wrote in his letter to the commission. “Sadly, today’s criminal complaint serves as a reminder that some enter public life seeking to accumulate power and enrich themselves.”

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.