“The only disinfectant that works is transparency,’’ – Householder Trial Update #4
By Sandy Theis, former reporter and political analyst
CINCINNATI — FBI Special Agent Blane Wetzel has been in the witness chair detailing the FBI’s investigation and on Feb. 6, the focus was on former Chair of the Ohio Republican Party Matt Borges. Unfortunately, the trial has been delayed due to COVID and there isn’t a hearing today. Wetzel has not yet been questioned by the defense.
What did we learn?
They knew their scheme was wrong, vowed to punish those who stood in their way, and worked exceedingly hard to try and cover their tracks.
That’s the picture federal prosecutors are painting as they try and convince a jury to convict former House Speaker Larry Householder and ex-Ohio Republican Party Chairman Matt Borges of racketeering conspiracy. The two are charged in connection with an alleged scheme to use $60 million from FirstEnergy and its allies to solidify Householder’s power, pass a ratepayer-funded bill to bail out aging nuclear power plants, and stop a planned referendum of the legislation. Both maintain their innocence.
Retired law professor Lewis Katz said the complex case gives prosecutors a tough—but not impossible—task.
“They need to prove that Householder, in some way—and it does not have to be through words—indicated that he would do something official if they provide him with these enormous sums of money,’’ said Katz, Professor Emeritus at Case Western Reserve University School of Law.
Even without such proof, one thing is clear: “The only disinfectant that works is transparency,’’ according to Ned Hill, a Professor of Economic Development at The Ohio State University’s John Glenn College of Public Affairs.
Hill repeated calls for Ohio to improve accountability by demanding better transparency. He has endorsed a Common Cause Ohio proposal to require nonprofits—often used to hide donors—to disclose the source of their funding.
In the trial’s first three weeks, prosecutors showed that Householder and Borges helped the scheme by insisting on secrecy. They deleted public records and urged allies and enemies to keep their secrets. At one point, Householder talked of blistering an interest group that opposed the bailout to prove that nobody messes with his members.
Although Householder had been prosecutors’ initial focus, details about Borges began to emerge on Monday. Jurors learned details of how he recruited a friend to provide inside information on the bailout—a friend who initially turned him down, then tipped off the FBI and agreed to secretly record Borges.
Jurors previously learned that Borges was paid for his help—mainly because of his ties to Attorney General Dave Yost.
On Monday, the FBI showed jurors a Borges text message that boasts Yost once called the bailout “bad policy’’ but said, “I would be out front opposing this if it wasn’t for FirstEnergy’s support and your involvement.’’
Householder Deleted Messages Showing Calls With AG Yost
Prosecutors have called Yost as a witness, and are expected to ask about his communications with Householder. New testimony showed that Householder deleted calls to and from Attorney General Yost—despite a law against quickly disposing of public records.
On Monday jurors also learned that Householder urged former State Rep. Dave Greenspan, a Republican who voted ‘no’ on the bailout bill, to delete a text in which he tried to pressure Greenspan to support the bill.
Greenspan received the text as he was meeting with the FBI–a timely coincidence that apparently sparked the entire HB 6 investigation. Despite his integrity, Greenspan was the lone House incumbent who was defeated in the next election. The FBI has subpoenaed him to testify.
Borges, too, valued secrecy and feared sunshine. Jurors learned more at the trial.
“We would need to fight discovery if it ever got to the point where they followed the Gen Now $,’’ Borges wrote to a colleague in an October 2019 text. Generation Now is the dark money group created to hide bribes.
FirstEnergy poured $15 million into the dark money group for Householder’s use between the time of the bill’s introduction in April 2019 and its final passage that July. The nonprofit spent the money on radio and TV ads, polling, staff, and mailers, all without ever disclosing its ties to FirstEnergy or control by Householder. It entered a guilty plea about two years after Borges’ comments.
Borges’ quest for secrecy extended to dealings with Tyler Fehrman. Fehrman was working for the referendum against HB 6; Borges was working to block the referendum at all costs. Borges offered to pay Fehrman for inside information about his side’s progress. Fehrman initially turned Borges down—then alerted the FBI and told Borges that he wanted the money after all. The FBI listened in.
“Don’t Tell Anyone About Our Conversation”
Initially, Borges was skeptical of Fehrman’s sudden change of heart. “You’re not trying to set me up here, are you?” Borges asked him, expressing fears that Fehrman would collect damaging information, then leak it to the press. “It would be bad for both of us if a story like that came out, but it would be worse for you,’’ Borges said, according to a conversation secretly recorded by the FBI.
The FBI also recorded Borges and Fehrman discussing the $15,000 check. “No matter what—don’t ever tell anyone about our conversation from earlier,” Borges told him.
Secretary of State Frank LaRose in the Mix
New information emerged at Monday’s session involving Secretary of State Frank LaRose. As he urged discretion from others, Borges freely shared information that could be damaging to Attorney General Yost and Secretary of State Frank LaRose—state offices that can use their discretion to help or hurt referendum campaigns.
At the time referendum supporters were hard at work, they grumbled that LaRose’s office immediately supplied referendum opponents with records they needed to undermine the effort. Although the quick release of records’ was not part of the testimony, the efforts to curry favor with the Secretary of State were on full display during Monday’s trial..
‘’LaRose is expecting us to be publicly supportive of him,’’ Borges wrote in a text message shown to jurors. ‘’He can be our friend in this … so let’s be supportive of him.’’
LaRose later asked for, and received, a meeting with John Kiani, board chairman of FirstEnergy Solutions, the FirstEnergy subsidiary that owned the nuclear plants, according to a November 2019 text conversation between Borges and FirstEnergy Solutions lobbyist Juan Cespedes.
“ ‘Are you sure about that?’” Cespedes replied, “He will live to regret that.”
Cespedes has pleaded guilty and is expected to testify this week.
Yost’s office was involved in another way. The AG was tasked with reviewing the referendum to confirm the summary language that would appear on petitions and on the ballot accurately described the bill. He initially rejected the summary language in mid-August, but accepted it 18 days later, helping Borges by shrinking the time available to collect signatures.
Prosecutors made it clear that Borges was hired because of his close ties to Yost.
Householder Wants to Keep Troubling Image from Jurors
The case is before U.S. District Court Judge Timothy Black. He has not yet ruled on whether to show jurors a photo of the Ohio Statehouse with the FirstEnergy Stadium logo superimposed on it. Utility executives passed around the photo-shopped image on the day the bailout passed, and former FirstEnergy consultant Mike Dawson shared it on Twitter.
“It shows a recognition that FirstEnergy had control over the Statehouse,” Assistant U.S. Attorney Matthew Singer told Judge Black.
OSU’s Ned Hill embraced the same theme.
“The motto on Ohio’s license plates should not be ‘Ohio, the Heart of it All.’” Hill said. “It should be, ‘Let’s Make a Deal.’ “