Former Ohio House speaker, lobbyist convicted in $60M bribery scheme
Larry Householder, former speaker of the Ohio House of Representatives, speaks during the Republican National Convention (RNC) in Cleveland, Ohio, U.S., on Monday, July 18, 2016. Photographer: David Paul Morris/Bloomberg via Getty Images
CINCINNATI, Ohio - Ohio House Speaker Larry Householder and former state Republican Party Chair Matt Borges were convicted Thursday in a $60 million bribery scheme that federal prosecutors have called the largest corruption case in state history.
A jury in Cincinnati found the two guilty of conspiracy to participate in a racketeering enterprise involving bribery and money laundering. Each faces up to 20 years in prison.
The government’s prosecution team was able to show that "Householder sold the Statehouse" and betrayed the people he was elected to serve, and that Borges was "a willing co-conspirator," U.S. Attorney for the Southern District of Ohio Kenneth Parker said in a statement.
"Through its verdict today, the jury reaffirmed that the illegal acts committed by both men will not be tolerated and that they should be held accountable," Parker said.
The man who brought the case, Parker's predecessor David DeVillers, tweeted: "The line between influence peddling and bribery will now be drawn by the rule of law and not by politicians, lobbyists and corporations."
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"We are incredibly disappointed in the verdict," Householder's attorney Steven Bradley said in an email. "We will take some time to evaluate all of our legal options and will most certainly pursue an appeal. Our client is looking forward to going home to be with his wife and family during this very difficult time."
The attorney representing Borges, 50, did not immediately respond to messages left by The Associated Press on Thursday. The verdict comes two-and-a-half years after Borges, Householder and three others were arrested.
Prosecutors alleged that Householder, 63, orchestrated a scheme secretly funded by FirstEnergy Corp. to secure his power in the Legislature, elect his allies — and then to pass and defend legislation that delivered a $1 billion nuclear power plant bailout to the Akron-based electric utility. They alleged that Borges, then a lobbyist, sought to bribe Tyler Fehrman, an operative, for inside information on the referendum to overturn the bailout law.
Electrical transmission towers stand on the grounds of the FirstEnergy Corp. Eastlake Generating Plant in Eastlake, Ohio, U.S., on Thursday, Feb. 11, 2010. Photographer: David Maxwell/Bloomberg via Getty Images
"Justice," Fehrman tweeted after the verdicts came down.
In a phone interview, Fehrman said that the outcome proved the risk he took wearing a wire for the FBI as part of the government’s investigation was worth it.
"For them to come back and find both of them guilty, and after not too long, is just such a relief," he said. "It is a good day for Ohioans. This stuff just can’t continue to happen."
Householder had been one of Ohio’s most powerful politicians — an historically twice-elected speaker before his indictment. After his arrest, the Republican-controlled House ousted him from his leadership post, but he refused to resign for months on grounds he was innocent until proven guilty. In a bipartisan vote, representatives ultimately ousted him from the chamber, the first such expulsion in Ohio in 150 years.
In a move that may have been pivotal in the trial's outcome, Householder took the stand in his own defense. Appearing confident and relaxed, he spent a day contradicting FBI testimony, defending his support for the bailout bill — known as House Bill 6 — and denying that he attended swanky Washington dinners where prosecutors alleged he and FirstEnergy executives hatched the scheme in 2017. But prosecutors eviscerated his claims on cross-examination the next day.
Rachael Belz, CEO of the government watchdog group Ohio Citizen Action, said she hopes that the trial and guilty verdicts turn the tide in Ohio politics.
"We don’t believe that utilities funneling millions of dollars through shell corporations to drive state policy is how our state government should work, nor do Ohio voters," she said in a statement. Belz held the decision up as evidence that Ohioans expect and deserve better.
"After so many years of utility-controlled energy policy that favored fossil fuels, Ohio must now move toward equitable, forward-looking solutions that will protect our air and water, the health of Ohioans, and provide clean energy jobs to keep Ohio competitive in the 21st-century economy," Belz said.
Borges did not testify at trial but has insisted that he’s innocent. His attorneys argued that he was entirely uninvolved with the pay-to-play scheme, while Householder's team portrayed his actions as nothing more than hardball politics.
"The bottom line is that Larry Householder was engaged in political activity, not criminal activity," his attorney Steven Bradley told jurors during closing statements. He said the government's investigation was flimsy and full of holes, calling it "a nothing burger."
But over the previous six weeks, jurors had been presented with firsthand accounts of the alleged scheme, as well as reams of financial documents, emails, texts and wire-tap audio.
The prosecution called two of the people arrested — Juan Cespedes and Jeff Longstreth — to testify about political contributions that they said are not ordinary, but bribes intended to secure passage of the bailout legislation.
Householder’s attorneys pushed back on arguments about their recollections, as well as their motivations. Both have pleaded guilty and are cooperating in hopes of a deal with the government.
Jurors also heard taped phone calls in which Householder and another co-defendant, the late Statehouse superlobbyist Neil Clark, plotted a nasty attack ad — and, in expletive-laced fashion, contemplated revenge against lawmakers who had crossed Householder.
Clark, who died by suicide in March 2021, was also heard describing to undercover FBI agents posing as developers how he was directing cash through Generation Now, a dark money group that has also pleaded guilty, to keep it secret.
Householder testified that he never retaliated against those who voted counter to his wishes or who donated to his rivals. He told jurors that the set-up advanced his interests, which were the same as Ohio's interests, because they involved good policy.
Under a deal to avoid prosecution, FirstEnergy admitted using a network of dark money groups to fund the bribery scheme and even bribing the state’s top utility regulator, Sam Randazzo.
Randazzo resigned as chair of the Public Utilities Commission of Ohio after an FBI search of his home, but he has not been charged and denies wrongdoing. The government has asked the PUCO to delay its own internal investigation into FirstEnergy while their probe continues.