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In his testimony in Ohio’s House Bill 6 corruption trial, former House Speaker Larry Householder challenged details of the government’s story and leaned on the argument that he engaged in normal political conduct that didn’t cross the line into criminal behavior.
“Absolutely you have to raise money” in order to become speaker of the House, Householder said. “You need lots of donors.”
Yet he said there were no promises to pass any specific legislation in return for funds from FirstEnergy and its affiliates.
Cross-examination by lawyers for lobbyist and former Ohio Republican Party chair Matt Borges has likewise been geared toward countering potentially damaging testimony by government witnesses while presenting his actions as aggressive but effective politics that didn’t rise to the level of a crime.
Between an explicit quid pro quo and outsized campaign contributions, “there’s a whole lot of gray area,” said Catherine Turcer, executive director of Common Cause Ohio.
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Government lawyers rested their case on Feb. 27 after five weeks of testimony and exhibits supporting their claims that Householder, Borges, three other individuals and the nonprofit corporation Generation Now took part in an alleged racketeering conspiracy centered around HB 6, Ohio’s nuclear and coal bailout law.
Evidence introduced during the prosecution’s case told a story of fraudulent conduct, bribery, money laundering, and abuse of public office. The government claims an enterprise, allegedly led by Householder and assisted by others, funneled roughly $60 million from FirstEnergy and its affiliates to Generation Now and other dark money groups. In return, the enterprise allegedly made sure Ohio enacted HB 6 and protected the bill from a voter referendum.
Co-defendant and former Generation Now president Jeff Longstreth pled guilty and testified as part of the government’s case, as did co-defendant Juan Cespedes, who acted as a lobbyist for FirstEnergy Solutions.
FirstEnergy also admitted in July 2021 that it used nonprofit entities known as 501(c)(4) corporations to conceal payments and secure favorable treatment from the former House speaker. The company also said it paid $4.3 million to a company linked to Sam Randazzo shortly before he became chair of the Public Utilities Commission of Ohio.
At the end of the government’s case, Judge Timothy Black denied Householder and Borges’ motions for acquittal. The evidence viewed most favorably to the prosecution could support a guilty verdict under relevant federal law, he said. That law is the Racketeer Influenced and Corrupt Organizations Act, also known as RICO.
Elements of the crime
Under federal law, the jury can only render a guilty verdict if it finds proof beyond a reasonable doubt for all elements of the alleged crime. The judge will tell jurors what those elements are. Both sides filed proposed jury instructions with the court before the trial began.
Proposed jury instructions in the HB 6 case
|1. Defendants engaged in an enterprise, or joint undertaking||Same as prosecution|
|2. Enterprise engaged in or affected interstate commerce||Same as prosecution|
|3. Defendant employed by or associated with enterprise||Same as prosecution|
|4. Knowingly conspired to conduct or take part in the enterprise’s affairs through a pattern of racketeering activity||4a. An agreement to take part in the enterprise through racketeering|
4b. Defendant must have knowingly and willfully joined in the conspiracy
4c. Specific intent to either take part in at least two other acts of racketeering or help others commit two such acts
The government’s proposed jury instructions call for jurors to find four elements of the crime. First, the defendants must have engaged in an enterprise, or joint undertaking. Second, that enterprise must have engaged in or affected interstate or foreign commerce.
Third, a defendant must have been employed by or otherwise associated with the enterprise. And fourth, evidence would have to prove that each defendant knowingly conspired to conduct or take part in the enterprise’s affairs through a pattern of racketeering activity.
The defendants’ proposed jury instructions are similar for the first three elements, but they break down the fourth element into three pieces. Under their view, there must have been an agreement to take part in the enterprise through racketeering. The defendant must have “knowingly and willfully joined in the conspiracy.” And there must have been a specific intent to either take part in at least two other acts of racketeering or help others commit two such acts.
Under the RICO statute, racketeering activity includes any of nearly three dozen criminal offenses, such as bribery and money laundering. Several of those offenses are referenced in the government’s indictment.
The jury does not have to find that the evidence proves every one of those racketeering offenses. But, even under the defense instructions, they must find at least two incidents in order to convict a defendant.
One of the listed racketeering offenses is honest services wire fraud. That crime deals with interference with someone’s fiduciary duty, such as a public official’s responsibility to act in the public’s best interest rather than that of a private company.
The Householder case deals with alleged actions swaying legislation, which falls within the official duties of a lawmaker, as well as activities relating to the House Speaker’s responsibilities.
Acts of bribery fall within the indictment’s alleged racketeering activity, including acts that qualify under Ohio law. In Householder’s case, evidence could support the finding of an explicit quid pro quo to bail out FirstEnergy’s former nuclear plants, said Ashley Brown, who headed the Harvard Electricity Policy Group and is a former PUCO commissioner.
As he sees it, FirstEnergy “wanted something very tangible in the form of major legislation.”
Other actions could also be found to constitute bribery, such as a $15,000 payment Borges allegedly arranged for former referendum worker Tyler Fehrman. He testified on Feb. 27.
Money laundering is also among the possible racketeering offenses. In the Householder case, that can include various payments to dark money groups. Those organizations generally don’t have to disclose who their donors are, so the public can’t readily track who pays for their activities.
The government built a case to show that dark money groups, including Generation Now, were used to conceal payments from FirstEnergy and others and to let them give money beyond lawful campaign finance limits.
An exception to spending limits can apply if political organizations are independent of any candidate and their campaign. However, some evidence in the Householder case suggests Householder controlled or coordinated with Generation Now or other groups, Turcer said. Other actions might also qualify as money laundering.
Interference with commerce through threats or violence also falls within the scope of the indictment. Former lawmaker David Greenspan claimed Householder threatened to hold up bills and take other action if Greenspan wouldn’t support HB 6.
Other lawmakers testified they also felt undue pressure from Householder to support the bill. And Fehrman said he felt threatened by some of Borges’ statements.
Transactions in property from unlawful activity also can be racketeering activity under the indictment. Along those lines, the government aimed to show how money flowed to individual conspirators or for their benefit, including roughly half a million dollars in alleged benefits to Householder, payments to a company set up by Borges, and more.
Taking the stand on March 1, Householder talked about his devotion to public education, transportation and energy issues, as well as the challenges of raising money for political campaigns and his relationship with FirstEnergy.
Householder admitted flying to Washington, D.C. on a FirstEnergy plane for the Trump inauguration, but denied meeting at any steakhouses with company executives during that trip, as government trial evidence appears to show.
Householder also said Longstreth set up Generation Now. Householder said he did not direct payments by Generation Now, although he did some fundraising for the group.
“It was important for Ohio. It was important to me,” Householder said.
Householder has taken the position that he supported HB 6 from the start and had the idea for it. Neither nuclear subsidies nor gutting of Ohio’s clean energy standards had previously passed.
“It seemed to me that the best thing we could do was put those two pieces of legislation together,” Householder said.
Judge Black has said the merits of the law are not relevant. However, the testimony arguably calls into question the idea that Householder took a bribe or violated his duties as a public official.
“I’ve always believed Ohio ought to be generating enough electricity in Ohio for Ohio,” Householder testified.
Questions put to current and former lawmakers Bill Seitz, Jim Trakas, Nino Vitale and Brett Hillyer apparently aimed to show others supported HB 6 or Householder’s bid for speaker. Black warned that any testimony about why people voted for HB 6 should be limited and said he would not let any witness “wax poetic” about the law’s merits.
Seitz voted against Householder for speaker in 2019. However, he has long opposed Ohio’s energy efficiency and renewable energy standards. His reasons included a fiscal analysis that claimed HB 6 would save more than $2 billion over time by gutting the clean energy standards. Various critics have challenged that analysis.
Seitz said he also wanted to safeguard the diversity of Ohio’s electricity generation, and that HB 6 protected nuclear and coal plants.
“Some of us were visionary at the time,” he added. Black then cut him off.
Seitz also testified about an event he attended with FirstEnergy executives in early 2017, arguably presenting the impression that such meetings weren’t inherently nefarious. And he said he didn’t see Householder threaten other lawmakers to support HB 6. Cross-examination drew out the admission that Seitz didn’t witness all of Householder’s conduct or attend all his meetings with FirstEnergy people.
Other lawmaker defense witnesses also said they did not feel unduly pressured to support Householder for speaker or to vote for HB 6. And those who got support as members of “Team Householder” claimed they didn’t understand it to be conditioned on voting for him as speaker or supporting any particular legislation.
Cross-examination by government lawyers sought to reinforce that money from the alleged enterprise paid for Team Householder support.
Householder’s lawyers also tried to counter government arguments that he profited financially from the Generation Now arrangement to the tune of roughly half a million dollars.
Lawyer Caryn Kaufman Boyer testified about legal documents she prepared for an agreement between Longstreth and Householder dealing with his Florida property. Presumably, that could show another explanation for money going to fix up the property.
On cross-examination, Boyer admitted that as of May 2020, the documents had never been signed and finalized. And while she said Householder was her firm’s client, her dealings were with Longstreth, whom she viewed as Householder’s representative.
If what the government alleged is true, however, “the real benefit was all about power,” Turcer said — setting Householder up to become House speaker and then initial steps that could have let him stay in that position for up to 16 years.
Robert Klaffky, who was a FirstEnergy Solutions lobbyist, testified it wasn’t him but FirstEnergy Solutions vice president David Griffing who gave a $400,000 company check to Householder in October 2018. Klaffky also said no promises were made at that meeting.
Cross-examination got Klaffky to admit he didn’t recall exactly what was said, and he knew the company’s big issue was the financial situation of its nuclear plants.
Borges’ lawyers will present their case after Householder’s team wraps up. Their cross-examination so far has aimed to distance him from Householder. Cross-examination of Fehrman also aimed to question his credibility and referenced statements by Borges indicating an attempt to avoid having Fehrman violate his employment contract.