By Sandy Theis, former reporter and political analyst

CINCINNATI — This week, federal prosecutor Matt Singer summed up Ohio’s complex racketeering case this way: FirstEnergy and former Speaker Larry Householder needed each other. FirstEnergy had what Householder needed—unlimited cash. Householder had what the utility needed—the ability to give it a ratepayer-funded bailout for its money-losing nukes.

Then he explained how the Akron utility intentionally hid about $60 million, most of it from FirstEnergy and a subsidiary, by funneling it through a series of non-profits called “dark money’’ organizations because they don’t have to list their donors.

Singer reminded jurors that a conviction does not require an explicit agreement to pass legislation in exchange for money. Such deals can be vague and achieved through a wink or a nod, he said.

If it walks like a duck…

“Use your common sense,’’ federal prosecutor Matt Singer told jurors. “Look at the volume of money and the timing of it.’’ He told the jury to ask why evidence showed that both men on trial worked hard to hide what they had done.

Householder and former Ohio Republican Party Chairman Matt Borges are charged with conspiracy to participate in a racketeering enterprise involving bribery and money laundering. Each faces up to 20 years. Both pleaded not guilty.

“Mr. Householder did not act alone but he was at the top,” Singer said in his closing argument. “He benefited the most‘’ because the scheme was designed to benefit his political machine.

Borges arrived late to the conspiracy but Singer said he arrived “with his eyes wide open’’ and he knew that the dark money group, Generation Now, was primarily funded by FirstEnergy and knew its purpose.

Nothing to see here!

Defense lawyers offered a different point of view, insisting that Householder worked hard to pass House Bill 6 out of a desire to keep the carbon-free nuclear power plants operating right here in Ohio. He was not asked to explain why the bill also included subsidies for coal-fired power plants, including one in Indiana.

Borges’ defense lawyers said, Borges didn’t know Householder very well and didn’t much like him.

The defense called prosecutors’ case “a nothing burger” and chastised the FBI for what it did not do: secure certain utility records they say help Householder, call as a witness Gov. Mike DeWine who signed the bailout bill into law, subpoena or interview lawyers who drafted an agreement they said would prove that Householder had no intention of personally enriching himself. It was a loan, they said.

“That’s evidence of an incomplete investigation,’’ said Householder attorney Steve Bradley. “If it doesn’t fit their narrative they don’t want it…. The bottom line is that Larry Householder was engaged in political activity, not criminal activity.” 

Singer, however, insisted jurors now have a “mountain of evidence” that proves the government’s case. Jurors saw bank statements, heard recordings of conversations secured through wiretaps, saw text messages and emails and heard from witnesses—including two men who signed plea agreements and testified for the government.

After Householder testified in his own defense last week, another prosecutor presented evidence that disputed key parts of his testimony. As Singer said, “Householder lied.’’

A $60 million dollar bargain

Prosecutors’ evidence included one text in which Householder called himself “cheap” but a FirstEnergy executive called Householder a “bargain.’’

“Millions of (utility) dollars for a billion-dollar bailout,’’ Singer sarcastically said. “That’s a bargain!’’

Borges is accused of paying $15,000 to Tyler Fehrman for inside information on the campaign to repeal HB 6. Fehrman notified the FBI, then agreed to wear a wire.

Singer pointed to a recording in which Borges tells Fehrman, “People are getting fat off this. Why not us?’’

The trial gave the public a rare glimpse into how business is sometimes transacted at the Ohio Statehouse and how politicians talk when they think the public isn’t listening.

Borges made it clear to Fehrman that their conversation about the $15,000 must remain between them. If a reporter called and asked about the payment, Fehrman testified that Borges said, “I’m going to blow up your house.’’

And there’s more: What the jurors didn’t know

Under a prior agreement between the parties, jurors did not know that FirstEnergy admitted in a deferred prosecution agreement to the bribes and agreed to pay a $230 million penalty. This means that the jurors may not know what court watchers do. This information was considered “too prejudicial.” 

They also were prohibited from learning that co-defendant Neil Clark, a lobbyist and Householder adviser, died by suicide. Jurors also did not learn that Borges pleaded guilty in 2004 to his role in an unrelated pay-to-play scheme when he served as chief of staff to then-Ohio Treasurer Joe Deters.

Borges got his record expunged and repeatedly claimed he was the victim of a political prosecution. Gov. Mike DeWine recently appointed Deters to the Ohio Supreme Court, which has jurisdiction over utility rate cases. DeWine also appointed Deters’ brother, Dennis, to the Public Utilities Commission of Ohio. The five-member PUCO sets utility rates.

Jurors also did not learn that FirstEnergy has admitted to bribing Sam Randazzo, the man Gov. DeWine appointed as PUCO chairman. Randazzo, who has since resigned from the panel, has not been charged and maintains his innocence.

The Ripple Effect

The outcome of this trial will have national consequences. According to the Boston Globe, a Householder conviction could send a message to the campaign finance world about the consequences of misusing dark-money groups. An acquittal, however, could open the floodgates even more for the political use of such secret donation groups. 

While it is legal for such groups to raise and spend money around the advocacy of particular issues, though not explicitly for candidates, public interest advocates have long decried the explosion of such groups as a way around campaign finance laws.

In Ohio and in federal elections, corporations such as FirstEnergy cannot legally donate directly to candidates. Throughout the trial, however, witnesses showed how when Householder asked for money, FirstEnergy provided it. Initially, the money helped elect House Republicans who would support Householder for Speaker. Once installed, Householder made passage of the bailout a top legislative priority.

The trial is expected to end Wednesday, then go to the jury for a verdict. The racketeering investigation is ongoing.

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