On June 29, 2023, former speaker of the Ohio House of Representatives Larry Householder, 64, was given a 20-year prison sentence by U.S. District Judge Timothy Black in a Cincinnati, OH, courtroom as a result of having been found guilty last March on charges of racketeering and bribery. Householder was immediately taken into custody and not allowed to remain free on bond pending an appeal.
The charges stem from the speaker’s role in passing legislation to provide FirstEnergy with $1.3 billion in bail out subsidies for the Davis-Besse and Perry nuclear plants in return for $60 million in bribes from the utility.
Judge Black rejected a recommendation by Householder’s lawyers for a more lenient sentence. Noting that Householder was unapologetic for his actions, the judge said, “You reap what you sow. You were not serving the people. You were serving yourself. You were a bully in your lust for power.”
Federal prosecutors called it the biggest public corruption case in Ohio’s history. U.S. Attorney Kenneth Parker said the government’s prosecution team showed that “Householder sold the Statehouse, and thus he ultimately betrayed the people of the great state of Ohio he was elected to serve.”
In their sentencing memorandum, federal prosecutors wrote, “the scope of the conspiracy was unprecedented. So was the damage it left in its wake, both in terms of its potential financial harm to Ohioans and its erosion of public trust.”
Others Who Were Part of the Dark Money Conspiracy
On June 30th, Matt Borges, the former chairman of the Ohio Republican Party, was given a five-year prison sentence for his role in the bribery scheme.
Neil Clark, a third member of the bribery scheme, died by suicide in 2021 after publishing a book detailing his life of backroom deals in state politics.
In October 2020 two others, Jeffrey Longstreth, 44, and Juan Cespedes, 41, of Columbus, each pleaded guilty to participating in a racketeering conspiracy involving the $60 million paid to a 501(c)(4) entity to pass and uphold a billion-dollar nuclear plant bailout. The two men were the arms and legs of the dark money group. Longstreth was a prosecution witness in Householder’s trial.
First Energy Fallout
First Energy fired Chuck Jones, its CEO, and also fired former Vice President for External Affairs Michael Dowling, whose texts, emails, and travel itineraries were used as evidence by federal prosecutors in the case against Householder.
The firm paid a fine of $234 million to the federal government and agreed to an additional payment of $115 million from its gains under the subsidy program. Several states are pursuing refunds from FirstEnergy related to the subsidies.
Dark Money Politics in Ohio
The bribery scandal had far reaching effects on Ohio politics. Starting in 2016, Householder spent some of the bribery money to help elect 21 candidates for legislative seats. In return for the campaign contributions, Householder elicited promises from the candidates that were elected, 14 in all, to vote for him to become House Speaker. Once in power, he pursued the bailout scheme. Also, he spent even more money, perhaps tens of millions, to undermine a ballot initiative that would, if successful, end the bailout payments.Â
Separately, the Department of Justice detailed that Householder spent more than half a million dollars of the dark money to pay off his credit card balances, repair his Florida home, and settle a business lawsuit. Borges used approximately $366,000 for his personal benefit. With no accountability to anyone, the two men freely used the bribery money slush fund as a personal piggy bank.
The money was funneled through a “dark money” group incorporated under 501(c)(4) of the federal tax code ensuring the campaign funds could not be traced to Householder or FirstEnergy.
In March 2017, Householder began receiving quarterly $250,000 payments from FirstEnergy into the bank account of his 501(c)(4) political action committee called Generation Now. Householder’s spending included $3 million on campaign contributions to other republican candidates and a $17 million public media campaign to promote the subsidies legislation.
Opposition to the energy subsidies from ratepayer and environmental groups quickly emerged not only over the nuclear energy subsidies, but because it also supported a giant coal fired power plant and it wiped out state financial support for renewable energy projects. FirstEnergy spent $38 million to defeat the planned ballot initiative. Some of the money paid for surveillance opponents and harassment of people soliciting signatures for the ballot initiative. The ballot issue failed and that ensured the successful passage of House Bill 6 in 2019.
As a result of the bribery scandal, the State of Ohio later eliminated surcharges for taxpayers in a partial repeal of the legislation. However, other parts of HR6 remain on the books including a subsidy for the coal fired power plant and the gutting of support for renewable energy projects in Ohio.
Not charged in the federal case, Samuel Randazzo, the now former chairman of the state’s public utilities commission (PUC), who confessed that prior to taking the post he accepted $4.3 million from FirstEnergy to “further its interests.”
Judge Black rejected a recommendation by Householder’s lawyers for a more lenient sentence. Noting that Householder was unapologetic for his actions, the judge said, “You reap what you sow. You were not serving the people. You were serving yourself. You were a bully in your lust for power.”
Federal prosecutors called it the biggest public corruption case in Ohio’s history. U.S. Attorney Kenneth Parker said the government’s prosecution team showed that “Householder sold the Statehouse, and thus he ultimately betrayed the people of the great state of Ohio he was elected to serve.”
In their sentencing memorandum, federal prosecutors wrote, “the scope of the conspiracy was unprecedented. So was the damage it left in its wake, both in terms of its potential financial harm to Ohioans and its erosion of public trust.”
Others Who Were Part of the Dark Money Conspiracy
On June 30th, Matt Borges, the former chairman of the Ohio Republican Party, was given a five-year prison sentence for his role in the bribery scheme.
Neil Clark, a third member of the bribery scheme, died by suicide in 2021 after publishing a book detailing his life of backroom deals in state politics.
In October 2020 two others, Jeffrey Longstreth, 44, and Juan Cespedes, 41, of Columbus, each pleaded guilty to participating in a racketeering conspiracy involving the $60 million paid to a 501(c)(4) entity to pass and uphold a billion-dollar nuclear plant bailout. The two men were the arms and legs of the dark money group. Longstreth was a prosecution witness in Householder’s trial.
First Energy Fallout
First Energy fired Chuck Jones, its CEO, and also fired former Vice President for External Affairs Michael Dowling, whose texts, emails, and travel itineraries were used as evidence by federal prosecutors in the case against Householder.
The firm paid a fine of $234 million to the federal government and agreed to an additional payment of $115 million from its gains under the subsidy program. Several states are pursuing refunds from FirstEnergy related to the subsidies.
Dark Money Politics in Ohio
The bribery scandal had far reaching effects on Ohio politics. Starting in 2016, Householder spent some of the bribery money to help elect 21 candidates for legislative seats. In return for the campaign contributions, Householder elicited promises from the candidates that were elected, 14 in all, to vote for him to become House Speaker. Once in power, he pursued the bailout scheme. Also, he spent even more money, perhaps tens of millions, to undermine a ballot initiative that would, if successful, end the bailout payments.Â
Separately, the Department of Justice detailed that Householder spent more than half a million dollars of the dark money to pay off his credit card balances, repair his Florida home, and settle a business lawsuit. Borges used approximately $366,000 for his personal benefit. With no accountability to anyone, the two men freely used the bribery money slush fund as a personal piggy bank.
The money was funneled through a “dark money” group incorporated under 501(c)(4) of the federal tax code ensuring the campaign funds could not be traced to Householder or FirstEnergy.
In March 2017, Householder began receiving quarterly $250,000 payments from FirstEnergy into the bank account of his 501(c)(4) political action committee called Generation Now. Householder’s spending included $3 million on campaign contributions to other republican candidates and a $17 million public media campaign to promote the subsidies legislation.
Opposition to the energy subsidies from ratepayer and environmental groups quickly emerged not only over the nuclear energy subsidies, but because it also supported a giant coal fired power plant and it wiped out state financial support for renewable energy projects. FirstEnergy spent $38 million to defeat the planned ballot initiative. Some of the money paid for surveillance opponents and harassment of people soliciting signatures for the ballot initiative. The ballot issue failed and that ensured the successful passage of House Bill 6 in 2019.
As a result of the bribery scandal, the State of Ohio later eliminated surcharges for taxpayers in a partial repeal of the legislation. However, other parts of HR6 remain on the books including a subsidy for the coal fired power plant and the gutting of support for renewable energy projects in Ohio.
Not charged in the federal case, Samuel Randazzo, the now former chairman of the state’s public utilities commission (PUC), who confessed that prior to taking the post he accepted $4.3 million from FirstEnergy to “further its interests.”
What’s Happened Since to FirstEnergy?Â
In March 2023 Vistra Corp (NYSE:VST) announced it will acquire Energy Harbor Corp, formerly FirstEnergy, which it intends to merge into a new zero-carbon generation and retail subsidiary called Vistra Vision.
The giant corporate acquisition is one of the largest nuclear energy deals of its kind in recent years putting a lot of energy eggs in one basket.Â
FirstEnergy, rebranded and reorganized as Energy Harbor (ENGH:OTC) operates the Beaver Valley nuclear power plant (2 reactors) in Pennsylvania and the Davis-Besse and Perry nuclear plants, both in Ohio. The two Beaver Valley units are 980 MW and 960 MW, Davis-Besse is 894 MW, and Perry is 1,256 MW for a total of 4,090 MW.
Vistra subsidiary Luminant operates the twin reactors at the Comanche Peak nuclear power plant in Texas. The companies anticipate closing the transaction in the second half of 2023, subject to regulatory approvals, which will include transfer of the current NRC licenses to the new owners.
Vistra Vision will combine Energy Harbor’s nuclear and retail businesses with Vistra’s nuclear and retail businesses and Vistra Zero renewables and storage projects. Energy Harbor’s legacy conventional fossil fuel generation fleet is not included in the sale. Energy Harbor has previously signed definitive agreements to sell these assets to third parties.Â
Vistra said the nuclear plants, and other Energy Harbor assets, will become part of Vistra Vision, a business unit that will have 7,800 MW of zero-carbon generation capacity, about five million customers across the country, and access to renewable energy projects for additional capacity.Â
It’s a fire sale deal for Vistra. Four new nuclear reactors could cost $8-10 billion each for a total of $32-$40 billion. By comparison, Vistra is paying $3 billion in cash (new debt), offering current investors a 15% equity stake equal to $1.4 billion, and assuming $0.43 billion in debt from Energy Harbor, for a total of $4.83 billion or roughly 12% of the cost of four brand new nuclear reactors.
In March 2023 Vistra Corp (NYSE:VST) announced it will acquire Energy Harbor Corp, formerly FirstEnergy, which it intends to merge into a new zero-carbon generation and retail subsidiary called Vistra Vision.
The giant corporate acquisition is one of the largest nuclear energy deals of its kind in recent years putting a lot of energy eggs in one basket.Â
FirstEnergy, rebranded and reorganized as Energy Harbor (ENGH:OTC) operates the Beaver Valley nuclear power plant (2 reactors) in Pennsylvania and the Davis-Besse and Perry nuclear plants, both in Ohio. The two Beaver Valley units are 980 MW and 960 MW, Davis-Besse is 894 MW, and Perry is 1,256 MW for a total of 4,090 MW.
Vistra subsidiary Luminant operates the twin reactors at the Comanche Peak nuclear power plant in Texas. The companies anticipate closing the transaction in the second half of 2023, subject to regulatory approvals, which will include transfer of the current NRC licenses to the new owners.
Vistra Vision will combine Energy Harbor’s nuclear and retail businesses with Vistra’s nuclear and retail businesses and Vistra Zero renewables and storage projects. Energy Harbor’s legacy conventional fossil fuel generation fleet is not included in the sale. Energy Harbor has previously signed definitive agreements to sell these assets to third parties.Â
Vistra said the nuclear plants, and other Energy Harbor assets, will become part of Vistra Vision, a business unit that will have 7,800 MW of zero-carbon generation capacity, about five million customers across the country, and access to renewable energy projects for additional capacity.Â
It’s a fire sale deal for Vistra. Four new nuclear reactors could cost $8-10 billion each for a total of $32-$40 billion. By comparison, Vistra is paying $3 billion in cash (new debt), offering current investors a 15% equity stake equal to $1.4 billion, and assuming $0.43 billion in debt from Energy Harbor, for a total of $4.83 billion or roughly 12% of the cost of four brand new nuclear reactors.
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