Bribes, “Black ops” and Bailouts — Householder Trial Update # 7

By Sandy Theis, former reporter and political analyst

CINCINNATI — Inside the campaign, they called it “black ops.’’ That was code for their plan to bribe a man who was working on a rival campaign for inside information.

Juan Cespedes testified about how he and Matt Borges had spent months getting state legislators to pass a law to bailout two nuclear power plants. Now, opponents were trying to collect the signatures needed to ask voters to repeal it. Part of their plan to infiltrate the other campaign was so secretive that Cespedes didn’t even tell his boss, FirstEnergy Solutions executive John Kiani.

“…do whatever it takes for us to get this done”

When Kiani got wind of the plan and asked for an update, Cespedes was relieved by his response. “He reiterated for us to do whatever it takes for us to get this done,” Cespedes said. And they did, giving Borges’ friend Tyler Fehrman a $15,000 check for information on the signature gathers’ progress and locations.

“The idea was we would compensate Mr. Fehrman for giving us information that was helpful,” Cespedes testified, directly contradicting statements from lawyers representing Borges.

Cespedes made his comments during his second day as a prosecution witness in the racketeering trials for former Ohio House speaker Larry Householder and Borges, a lobbyist and former chairman of the Ohio Republican Party. They are accused of participating in a scheme to use $61 million—most of it from FirstEnergy—to make Householder speaker and then pass a $1.3 billion bailout of failing nuclear power plants owned at the time by a FirstEnergy subsidiary.

Cespedes is one of two co-defendants who pleaded guilty and agreed to cooperate with federal prosecutors. He became the first to testify Monday and Tuesday and is expected to return to the stand Wednesday.

Lawyers for Borges have said the Fehrman payment was not a bribe, but an advance for future work and intended only to help Fehrman navigate a costly divorce. Fehrman took the check to the FBI, wore a wire, and is expected to testify for the prosecution.

Concealing payments

Cespedes did further damage by suggesting that Borges tried to conceal the Fehrman payment by not including it on a spreadsheet that listed other expenses.

When Cespedes asked Borges about the omission, “He (Borges) said it wasn’t something he wanted to write down.’’

On Monday, Cespedes recalled a 2018 meeting during which a FirstEnergy Solutions lobbyist gave Householder a $400,000 check made out to Generation Now, a dark money group that the FBI said that Householder controlled and was used to conceal the bribes.

Householder’s lawyers testified that the money flowing from the utilities to Householder is just business as usual at the Ohio Statehouse, and Householder’s support for the bailout was motivated not by political giving but rather a desire to preserve good-paying jobs at the two nuclear plants.

FirstEnergy Solutions was a subsidiary of Akron-based FirstEnergy Corp. It declared bankruptcy in 2018 , then spun off into a separate company, Energy Harbor, where Kiani is now executive chairman. 

Cespedes described Kiani as an “activist investor” who—with a hedge fund he operates—purchased a stake in FirstEnergy Solutions and needed the bailout to entice buyers to purchase the troubled nukes. Then Cespedes dropped another bombshell: He said Kiani stood to personally gain $100 million from the sale of nuclear plants.

The trial is expected to last for several more weeks.

Some recent articles:

‘I am guilty’: Co-conspirator testifies against former Ohio Speaker Larry Householder in corruption trial, WEWS, February 14, 2023

House Bill 6 corruption case: Who is John Kiani?, Columbus Dispatch, February 14, 2023

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