Bribery trial begins for former Ohio House speaker

CINCINNATI (CN) — Larry Householder, a former Republican state legislative leader, and the former chairman of the Ohio Republican Party stood trial Monday on a federal racketeering charge accusing the men of accepting more than $61 million in bribes to pass a $1 billion bailout for two of the state's failing nuclear power plants.

Householder and Matt Borges, alongside lobbyists and political consultants Jeffrey Longstreth, Neil Clark, and Juan Cespedes, were charged in 2020 with racketeering in what U.S. Attorney David DeVilliers called "likely the largest bribery and money laundering scheme ever perpetrated in the state of Ohio."

The men are accused of operating a "dark money" scheme to accept bribes from FirstEnergy Corporation, the then-owner of the nuclear power plants, via Generation Now, a 501(c)(4) nonprofit organization, and get Householder elected speaker of the Ohio House of Representatives to pass the taxpayer-funded bailout.

Longstreth and Cespedes pleaded guilty several months after the indictment and admitted to using Generation Now to accept bribes, ensure Householder was elected speaker and defeat a statewide ballot measure that would have prevented the bailout.

Clark died by suicide in March 2021. He was found in his Florida home wearing a "DeWine for Governor" T-shirt. Ohio's governor is Republican Mike DeWine.

Householder was removed from his position as speaker just over a week after being arrested in July 2020 and was formally removed from office in June 2021, but has since maintained his innocence and claims the operation was merely politics as usual.

Along those lines, Senior U.S. District Judge Timothy Black in December granted a portion of the government's motion to limit the testimony of Householder's expert witness, Caleb Burns, and ruled he "will not permit the argument that 'the alleged conduct is common practice and should therefore be excused.'"

The government claims Householder used money obtained via donations to Generation Now for personal use -- including repairs to a Florida property and paying off lawsuit expenses -- and to campaign against the referendum that would have repealed House Bill 6, the bill allowing the FirstEnergy bailout.

Assistant U.S. Attorney Emily Glatfelter heads the prosecution and outlined the government's case in Monday's opening arguments.

Technical difficulties with the courtroom computer system caused a 15-minute delay in proceedings, during which Black offered to sing "Edelweiss," his favorite song, although the attorneys declined.

Glatfelter spoke to the jury for just over an hour and began her outline of the case with a simple declaration: "Larry Householder sold the statehouse."

She detailed the genesis of the corruption scheme, which began when Householder flew with FirstEnergy executives to Washington, D.C., in January 2017 on the company's private jet.

Once in the nation's capital, Glatfelter said Householder was taken to "fancy steakhouses" where he discussed potential legislation to bail out the failing power company.

Just weeks after Householder's return to Ohio, Longstreth opened a bank account for Generation Now and the money started pouring in, according to the prosecution.

The nonprofit received quarterly payments of $250,000, amidst other one-time payments, most of which coincided with Householder's trips to meet with FirstEnergy executives.

Once the state representative from Perry County was elected speaker of the House, Glatfelter said he "used his power to ram this legislation through the house in just six weeks."

The politicians and consultants affiliated with Householder were dubbed "Team Householder" or referred to as being "on the farm," according the government, a reference to the former speaker's 100-acre homestead.

Borges entered the frame when a group of Ohioans sought to repeal HB 6 through a referendum, the government's attorney said.

Described as a "manager of sorts" by Glatfelter, Borges allegedly gave a $15,000 check to a ballot campaign employee for inside information about the recall effort, which was eventually turned over to the FBI.

In closing her opening statement, Glatfelter reminded the jury the case against Householder and Borges is not about campaign finance, party affiliation, or the subject of the legislation itself.

"It doesn't matter whether HB 6 was good legislation or bad legislation," she said. "What matters is that it was corrupt legislation."

Black admonished defense counsel at one point during Glatfelter's arguments, after the government's attorney commented about noise from their desk.

"Stop the facial expressions and proceed professionally," the judge told Householder's attorneys.

Black reiterated his disgust with the attorneys' actions shortly before the jury returned from it lunch break.

"I was appalled by the behavior of defense counsel during the prosecution's opening arguments," he said. "A bunch of facial expressions and clicking of pens. It's bush league."

Householder's legal team presented its opening statement first, and attorney Steven Bradley of the Cleveland firm Marein and Bradley made it clear from the outset he would focus on the character of his client.

Bradley gave the jury a lengthy and far-reaching retelling of Householder's personal history, starting with his graduation from Ohio University in 1982, his founding of a State Farm insurance office shortly thereafter, and through his first foray into politics, which resulted in his first stint as speaker from 2001 to 2004.

Black gave the attorney some leeway but urged him to move to what the evidence of the case will show after 15 minutes of exposition.

"You're going to see that the government's got it wrong here," Bradley said. "These are ordinary political contributions ... and, by definition, not part of some illicit bribery scheme."

The attorney repeatedly described his client as an "outsider" who ascended to the pinnacle of the Ohio political world only through hard work and the relationships he forged along the way.

He emphasized more than 25 individuals and corporations made contributions to Generation Now, and that Householder supported HB 6 on the merits of the legislation.

"What motivated Larry to support House Bill 6 was that he believed in many of the things contained in House Bill 6," Bradley said. "He believed it benefitted all Ohioans, and that's the only reason he supported and advanced the bill."

Attorney Todd Long of McNeese, Wallace, and Nurick LLC, made opening arguments for Borges and immediately attempted to distance his client from his co-defendant.

"There is a universe of difference between Matt Borges and everyone else in this case," Long told the jury. "What makes him different? Everything."

"Matt's not on Team Householder. He was never 'on the farm," the attorney continued. "He's not an insider at FirstEnergy either, and it sought to undermine his career time and time again."

Long said his client backed several of Householder's primary opponents through the years and described Borges' actions as "just normal legislative lobbying stuff," while the $15,000 check was written off as a "front-loaded" payment for consulting work on "entirely unrelated projects."

FirstEnergy fired several executives in the wake of the scandal and was sued in a class action brought by Ohioans whose utility bills would have increased under HB 6. A motion to approve a settlement in that case was granted by a federal judge in December.

The company also agreed to pay a $230 million fine to the federal government in July 2021 as part of a deferred prosecution agreement related to federal wire fraud charges.

Householder, accompanied by his wife, spoke freely to reporters in the lead-up to Monday's opening arguments and seemed relaxed and confident.

"I've been waiting two and a half years to tell my story," he said. "It feels good."

He admitted the saga has been difficult on his family, but that the intervening time between his indictment and trial gave him time to work on his farm and spend time with his 4-year-old granddaughter, Scarlet.

"For two and a half years, I have not been nervous, no anxiety," he told reporters. "This next six weeks should be a very good six weeks for me."

Although a witness list has not been released, Longstreth, Cespedes, legislators and political candidates are expected to testify over the next four to six weeks, along with Householder himself.

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Categories / Criminal, Government, Politics, Regional, Trials

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Bribery trial begins for former Ohio House speaker

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