FBI Arrests Ohio Republicans in Alleged $60 Million Bribery Case for Coal and Nuclear Bailout

Here is Ohio State Rep. Larry Householder, whom the FBI arrested Tuesday. If you do the crime, you gotta do the time, man.
Here is Ohio State Rep. Larry Householder, whom the FBI arrested Tuesday. If you do the crime, you gotta do the time, man.
Photo: John Minchillo (AP)

The FBI arrested Ohio House Speaker Larry Householder and a number of Republicans on Tuesday on charges of bribery tied to the state’s passage of a nuclear and coal bailout bill last year.

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Along with Householder, former Ohio Republican Party Chairman Matt Borges, lobbyist Neil Clark, political consultant and Householder adviser Jeff Longstreth, and lobbyist Juan Cespedes were also arrested for accepting $60 million in bribes from an unnamed company, according to suit. The Toledo Blade first reported the possible connection between the bill and the arrests. They may be facing up to 20 years in prison, per the Department of Justice.

Householder helped shepherd 2019 bill, known as HB 6, through the Ohio House of Representatives and it has since become law in the state. It focused on subsidizing dirty energy and killing energy efficiency initiatives—all on the taxpayer’s dime. This year, utility customers began paying an additional $1.50 monthly to keep the state’s dying coal industry in business. The bill was also set to increase homeowners’ monthly bills 85 cents while industry would see bills rise by up to $2,400 per month higher next year. That would bring in a total of $170 million a year, $150 million of which would go toward bailing out two nuclear plants owned by FirstEnergy Solutions, which is now Energy Harbor.

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There was little oversight in the bill for how FirstEnergy could use the money as well as funds for coal plants that were projected to lose $5.3 billion between now and their planned retirement in 2040 before the bailout. Along with all this, the bill cut the state’s energy efficiency and renewable energy standards. State legislators tried to argue that ratepayers would be saving money but, um, hello? Climate change? Staving off a lifetime of environmental ruin seems like a pretty good idea in my book. The efficiency standards also saved ratepayers an estimated $5.1 billion over a decade before the repeal as part of HB 6. Less efficiency means more energy use, which benefits utilities looking to make a buck.

Anyway, the whole bill created turmoil and dissatisfaction. Now, it appears that state leaders didn’t pass this bill because they thought it would be good for their constituents. Nope, they allegedly passed it because they were being paid to. The money was funneled from the unnamed company through Generation Now—a dark money group that supported HB 6 and according to the complaint, was secretly run by Householder—to Householder and others arrested on Tuesday.

The criminal complaint likens the $60 million in payments to “bags of cash” and Borges, the former party chairman, described it as “Monopoly money” in recorded conversation referenced in the complaint. In addition, the FBI document goes on to note that the “combination of phone records, bank records, and text messages paint a clear picture of the partnership” between the company and the arrested Republicans trying to get HB 6 passed. Householder, in particular, benefited tremendously from the money. He used it to pay off credit card debt, settle a personal lawsuit, and help cover costs at his Florida residence.

“We knew for quite a while that Larry Householder was doing the bidding of FirstEnergy,” Leah Stokes, an energy expert at the University of California, Santa Barbara who wrote a book that in part chronicles the shadiness of HB 6, told Earther. “Today’s arrest just makes it even clearer how deep the corruption has gone in Ohio. The legislature should repeal HB 6, which was passed at the direction of a leader who was taking direct bribes from an electric utility with financial stakes in the bill.”

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In her book, Stokes notes the utility took to backing Householder in his race to be state House speaker. It also took what she calls the “unusual approach” of backing other state representative candidates who supported his bid.

Since the arrests, FirstEnergy’s stocks have dropped dramatically. It’s still unclear whether these arrests and federal investigation will affect the company or the future of the bill, though.

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Updated, 7/21/20, 3:10 p.m. ET: This post has more details from the case, as well as additional quotes from Leah Stokes.

Updated, 7/21/20, 4:21 p.m. ET: This post has been updated with more details on Householder’s personal benefit and potential sentence.

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This is a developing story, and Earther will update as more information becomes available.

Yessenia Funes is climate editor at Atmos Magazine. She loves Earther forever.

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