Householder trial: 'He was at the top' of pay-to-play scheme, federal prosecutor says

Former Ohio House Speaker Larry Householder led a criminal enterprise to sell legislation for political power and nearly $61 million, a federal prosecutor said in closing arguments of the state’s largest corruption trial Tuesday.

“Mr. Householder did not act alone but he was at the top,” Assistant U.S. Attorney Matt Singer said. “He benefited the most because the enterprise was set up to benefit his political machine.”

Householder and ex-Ohio Republican Party Chairman Matt Borges are accused of participating in a pay-to-play scheme to pass House Bill 6, a $1.3 billion bailout for two nuclear plants then-owned by FirstEnergy Solutions and defend the law against a ballot initiative to block it.

Borges participated in Householder’s conspiracy by paying a $15,000 bribe for insider information about the anti-House Bill 6 referendum, Singer said.

“Matthew Borges entered the criminal conspiracy with his eyes wide open,” Singer said. “Matt Borges knows this agreement is corrupt.”

What is racketeering conspiracy?

Householder and Borges are accused of racketeering conspiracy, punishable by up to 20 years in prison. They have pleaded not guilty. Jurors must determine whether prosecutors proved four elements beyond a reasonable doubt:

• A criminal enterprise existed.
• The enterprise engaged in interstate commerce.
• Householder and/or Borges were associated with or employed by the enterprise.
• They conspired to participate in the enterprise through a pattern of racketeering activity. That means at least two offenses, such as bribery, honest service fraud, extortion and money laundering.

The law doesn't require that the agreement be explicit. It can be expressed through winks and nods.

'Concealment shows corrupt intent'

That enterprise was hatched between Householder and executives for FirstEnergy over steakhouse dinners in Washington, D.C., during former President Donald Trump’s inauguration in 2017, Singer said.

FirstEnergy needed a bailout and Householder needed cash to fuel his quest for more political power. "They needed each other," Singer said.

Householder told jurors on the witness stand that he never attended those dinners. Instead he ate pizza, attended a country concert and a gala. But Singer told jurors that they shouldn’t buy that story: "Mr. Householder's testimony was not true."

Singer pointed to the testimony of Householder’s political adviser Jeff Longstreth, who said Householder was at the dinners, and a picture of FirstEnergy’s top lobbyist Michael Dowling, Householder’s son and Householder’s knee outside of the steakhouse.

Lying on the witness stand was one way Householder tried to conceal the enterprise, but it wasn't the only one, Singer argued.

The intentionally complex web of dark money groups made it impossible for the public to learn that FirstEnergy and its subsidiary were funding pro-Householder and pro-House Bill 6 ads, Singer said. Householder deleted text messages and phone logs. Members of Team Householder deleted paperwork related to the ballot battle to preserve House Bill 6.

“Concealment shows corrupt intent,” Singer said.

Was Householder bribed?

Singer argued that Householder knew that FirstEnergy’s millions came with an expectation to pass a bailout for FirstEnergy Solutions’ nuclear plants and to defend that law against a ballot initiative to block it in 2019.

“The evidence is clear: Mr. Householder received that money knowing what it was for," Singer said.

In October 2018, FirstEnergy Solutions’ lobbyists hand-delivered a $400,000 check to Householder for Generation Now, the dark money group at the center of the alleged scheme, to help Householder win control of the Ohio House of Representatives.

Former FirstEnergy Solutions lobbyist Juan Cespedes testified that fellow lobbyist Bob Klaffky gave Householder the check and said: "Our client cares very much about this issue.”

Householder upon opening the check replied: “Well, yes they do.”

Householder said that verbal exchange never happened and Klaffky testified that he couldn’t recall the exact wording, but it wasn’t pay-to-play. Singer said Klaffky, as a powerful lobbyist in Ohio, “had an interest in distancing himself from the exchange.”

After Householder won the speakership, passed House Bill 6 and successfully defended it, Householder shifted his attention to a constitutional amendment that could give him another 16 years as House speaker. Once again, FirstEnergy and FirstEnergy Solutions were ready to bankroll Householder's plan.

"They wanted Householder in charge. They knew that it was in their best interests to do that," Singer said.

What was Borges' role?

Borges was tasked with influencing Ohio Attorney General Dave Yost and convincing him that House Bill 6 was a tax that couldn't be challenged at the ballot box. Borges also gave $15,000 to political operative Tyler Fehrman who was working on the anti-House Bill 6 referendum.

Singer said Borges knew about the larger enterprise and bribed Fehrman for insider information, such as how many signatures the anti-House Bill 6 effort had collected to make the ballot. As Borges told Fehrman in a recorded call: “Everyone’s getting fat on this. Why not us?”

The arguments came at the end of a seven-week trial in U.S. District Court in Cincinnati. Attorneys for Householder and Borges will present their closing arguments after a lunch break.

The case came two-and-a-half years after the arrests of Householder, Borges and three others − lobbyist Neil Clark, Cespedes and Longstreth. Clark died by suicide two years ago. Cespedes and Longstreth signed guilty pleas in October 2020 and provided damaging testimony against Householder and Borges.

Ohio Statehouse CaseWho you need to know in public corruption case

The case has already had a big impact. The bailout law was partially repealed. Householder was arrested and expelled from the Ohio House. FirstEnergy paid a $230 million fine, fired top executives, replaced board members and signed a deferred prosecution agreement.

Householder took the stand in his own defense and also subpoenaed multiple witnesses. Borges opted not to bring witnesses or take the stand. Instead, his lawyers drew attention to scenes, meetings, and text messages in which he was absent.

This story will be updated with closing arguments from the defense.

USA TODAY Network Ohio bureau reporters Jessie Balmert and Laura Bischoff have been following the House Bill 6 scandal since the story broke. They will continue to follow developments and the trial. Follow them on Twitter at @lbischoff and @jbalmert for updates.

The USA TODAY Network Ohio bureau serves the Akron Beacon Journal, the Columbus Dispatch, the Cincinnati Enquirer and other network news organizations across the state.

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