[EDITOR'S NOTE: This story has been updated to represent the proper party affiliation and district of state Rep. Mike O'Brien of Warren, D-64th, and to include new data on donations to Valley elected officials and an explanation from state Rep. Michele Lepore-Hagan about a check from FirstEnergy Corp. that was mistakenly sent to her.]
COLUMBUS — Several local politicians heading into the November general election have, in the past several years, received at least some campaign money from individuals and entities named in a federal racketeering affidavit or FirstEnergy Corp., which prosecutors allege gave $61 million in “dark money” in exchange for a billion-dollar nuclear energy bailout.
So, too, did Gov. Mike DeWine.
Mahoning Matters began looking at local campaign finance reports following a call for campaign finance reform in the state. State lawmakers on Wednesday said beneath the alleged corruption exposed in the case against House Speaker Larry Householder and his four associates lies a deeper problem with campaign financing in Ohio.
Householder and his four alleged conspirators were federally charged with running the largest bribery scheme the state has ever seen — taking bribes from a company presumed to be FirstEnergy Corp. in exchange for passing a more than $1 billion bailout bill to save its two failing nuclear power plants. Prosecutors said the conspirators’ enterprise passed that money through “dark” entities to politicians in Householder's camp to stack the legislature in favor of the bill.
"This type of illegal activity is one of the greatest threats to our state. It erodes public confidence in our system of government. It casts a shadow on thousands of elected officials and public officials," said state Sen. Sean O'Brien of Bazetta, D-32nd, who announced Wednesday he's introducing legislation next week to immediately repeal House Bill 6.
"The complaint against Householder is really an indictment against campaign financing in Ohio. ... It is not until we have real finance reform that we get away from these types of systems — that 'dark money' will no longer be able to influence elections," he said.
O'Brien, joined at the Wednesday morning media conference by state Reps. Mike O'Brien of Warren, D-64th, and Gil Blair of Weathersfield, D-63rd, suggested the measure would have strong bipartisan support, as well as unanimous support from House Democrats.
"It's really not a Democrat/Republican issue — it's a right and wrong issue," Sean O'Brien said.
Mike O'Brien, who’s introducing a companion House bill, said the new legislation would mean HB 6 "never existed" and FirstEnergy customers who were expected to bear the more than $1 billion subsidy through hiked utility bills over the next seven years wouldn't have to pay.
State Rep. Michele Lepore-Hagan of Youngstown, D-58th, said in a Wednesday statement she’s signing onto O’Brien’s House bill. State Rep. Al Cutrona of Canfield, R-59th, also said he’s joining a similar House bill alongside Republican majority leadership. It’s unclear if these measures are the same bill.
Gov. Mike DeWine, during a Wednesday briefing on the state’s coronavirus response, said he’s opposed to repealing HB 6, which he called “good policy” based on its potential to reduce carbon emissions in the state.
“For a long time I’ve advocated [and] the lieutenant governor has advocated for a balanced energy policy in the state of Ohio. We think having a nuclear plant is part of that balanced policy,” he said.
Without the two former FirstEnergy nuclear plants in Perry and Oak Harbor, Ohio would have “virtually” no non-carbon-generating energy resources, DeWine said.
Lt. Gov. Jon Husted echoed the governor, adding Ohio “needs clean energy” to reach goals for reducing carbon emissions in the state.
Though Householder and his associates have not been indicted, only charged in an affidavit of probable cause, Sean O’Brien later told Mahoning Matters he feels the decision to repeal HB 6 is simple — its legislative process was tainted.
“Any legislation that is derived through bribery or conspiracy or illegal means must be rescinded and reevalutated,” he said. “Not doing that erodes public trust and rewards pay-to-play in Ohio.”
Blair said Wednesday the nuclear bailout bill "had an impact on the Mahoning Valley," as it served to delay construction on a second natural gas power plant in Lordstown.
SURPRISE IN THE STATEHOUSE?
Sean O'Brien said FirstEnergy's financial support for Householder and other lawmakers who supported the company's initiatives was no secret in the statehouse, but Tuesday's federal racketeering complaint caught legislators by surprise.
"There's always been talk about the money. I was not party to that, and it was never brought to my attention that it was illegal," he said. "Everyone knew there was a massive amount of support from FirstEnergy to Householder and Republicans in the House. I never knew this indictment was coming. Most of the people I talked to in Columbus ... had no idea this was coming."
DeWine also told reporters he was “surprised as everyone else” when he learned about the case against Householder on Tuesday morning. He said his administration is not involved and, to his knowledge, has not had contact with federal prosecutors.
DeWine, like other statehouse denizens, said Wednesday he was unaware HB 6 and Householder’s camp were being eyed by prosecutors, though he noticed the deep-pocketed political overtures backing the bill and working to derail a ballot initiative to reverse it. He was later pressed by a Cleveland.com reporter, who cited months of editorials on “how this bailout stunk.”
“Was it clear that a lot of money — a lot of money — was being spent on TV ads? Yes, that was clear. Was it clear there was an effort going on to first pass it, then … push back on the petition process [to defeat it]? All of that was reported by you and by others. So, sure, we were certainly aware of that.
“Certainly there was talk the speaker was involved in that, but beyond that, there was no indication anything illegal was going on,” DeWine said. Fundraising for or against a political cause is common practice — but “by and large, most times, they follow the law.”
Householder and others are accused in the federal complaint of laundering tens of millions in FirstEnergy funds through a 501(c)(4) corporation called Generation Now. Those tax-exempt corporations do not have to disclose their contributions for election oversight.
Though those entities are intended for social welfare programs, prosecutors say Householder and other alleged conspirators instead used it as a political action committee, funneling campaign funds to running candidates who would help Householder in his bid for House speaker and support HB 6.
Ohio Secretary of State records show former State Rep. Don Manning — who died in March — received $46,949 in in-kind contributions from the Ohio Republican State and Central Executive Committee on Oct. 30, effectively tripling Manning’s own fundraising efforts, just a week before the November 2018 general election, when Manning faced Poland Township trustee Eric Ungaro.
Up until that point, Manning had raised just over $17,000 for his 2018 campaign, records show. The Business Journal was first to report the connection Thursday, crediting an undisclosed source with close knowledge of the 59th district House race.
Though “dark money” funneled to Ohio political campaigns through House Speaker Larry Householder’s alleged racketeering enterprise was funneled through a secret organization and not publicly disclosed, public records show Householder’s political committee had given $230,000 to the executive committee’s candidate fund in the five weeks before it boosted Manning’s campaign.
In-kind contributions are classified as non-monetary contributions when an individual or organization pays for services on behalf of a candidate’s committee. In Manning’s case, those funds were used for printing and postage costs, according to state records.
A series of attack mailers against Ungaro, a Poland Township trustee, started hitting mailboxes just a few days before the election, Ungaro told Mahoning Matters Thursday. The advertisements claimed his family was connected to the “corrupt, rigged system that has failed the Mahoning Valley for decades.”
Manning won the election by 375 votes, or little more than a third of a percent.
"The honest to God truth is I believe things work out for a reason,” said Ungaro.
Following the election, he was able to spend more time with his father — Pat Ungaro, a longtime Liberty Township official who died in March 2019 of cancer — rather than split his time in the capital.
"I guess it was meant to work out that way,” Eric Ungaro said.
Following Manning’s primary win, he received more than $6,000 in donations from FirstEnergy, Householder’s political committee and another person charged in the federal affidavit after Manning. Those donations were, however, publicly disclosed in Ohio Secretary of State campaign finance records.
Mike O’Brien on Wednesday accused the November general election opponents of he and the other two lawmakers — as well as Democrat Chris Stanley, running for the House 59th District, who attended the Wednesday media briefing but did not speak — of also being on the receiving end of “dark money,” some of which was expected to be funneled through Householder.
Ohio secretary of state campaign finance records, however, do not show evidence of any major donations so far to their November opponents. You can see the summary below.
Sean O’Brien later clarified to Mahoning Matters the claim that local Republican candidates could get “dark money” was based on statehouse word-of-mouth.
“I guarantee my opponent’s going to get a boatload of money. How are they raising, in three months, hundreds of thousands of dollars?” he said.
When HB 6 reached the Senate, Sean O'Brien said he "was warned" if he did not back the bill, lobbyists would "spend a great deal of money" to oppose him in future elections.
"They're able to use this unfettered money, this slush fund, to plan for the future, to get their proponents, the people that support them," Sean O'Brien said. "Until we have real campaign finance reform, things like this can pop up again. ... That money needs to be transparent.
"Until you have that, we're going to continue to see problems like we've been seeing, and it's Ohioans who are going to continue to suffer."
On Wednesday, Secretary of State Frank LaRose referred 19 alleged violations of Ohio campaign finance laws, based on the federal affidavit, to the Ohio Elections Commission.
Democrat Chris Stanley, running for the House 59th District, and State Rep. Michele Lepore-Hagan of Youngstown, D-58th, in a joint statement Wednesday called for Householder to resign immediately and donate "every dollar in his campaign account and any other account he controls" to charity. They also called for every politician whom the speaker has supported financially to give those funds to charity as well.
"His dirty money, accumulated through egregious violations of our state's campaign finance laws and every applicable ethical standard, must not be used to buy the 2020 election as it did contests in 2018," the statement reads. "The first step in restoring the public trust Householder and his co-conspirators have destroyed is to ensure that money from his conspiracy will not further pervert democracy in our state."
DeWine said Wednesday if he discovers any of what Lepore-Hagan called “dirty money” was donated to his campaign, he’d consider donating it to food banks.
He and Attorney General Dave Yost on Tuesday called for Householder’s immediate resignation. DeWine told reporters Wednesday he would consider calling legislators back to the capital for a special session to vote on his removal, if necessary.
Lepore-Hagan told Mahoning Matters Friday one of the two $2,000 checks her campaign received from FirstEnergy in 2015 was actually intended for State Rep. Christina Hagan of Alliance, R-50th.
The check, however, was addressed to Lepore-Hagan's campaign — presumably a surname mixup — and she inadvertently cashed it. The money was later returned, she said.
Lepore-Hagan did say her campaign received $500 from FirstEnergy in 2019, but it was not connected to Householder's alleged scheme.
"There was no conversation ever with me because they know I was heavily supporting renewables," Lepore-Hagan said Friday.
LIST OF CONTRIBUTIONS
Below is a summary of political contributions made since 2009 to Mahoning Valley politicians running in the 2020 general election, as well as two DeWine-Husted political committees by FirstEnergy, Householder and others facing federal racketeering charges and their associated entities, according to state campaign finance records.
It should be noted the federal racketeering charges reference a period between March 2017 and March 2020, and a large portion of the contributions below occurred outside of this period.
The next state deadline for campaign finance reports is July 31. Due to this timing, campaign finance information for appointed Republican state Rep. Al Cutrona of Canfield, who is facing Stanley in November, was unavailable for this report.
For a summary of the alleged conspirators’ roles, read our previous report on the federal affidavit:
DeWine Husted for Ohio
- $69,457.79 from FirstEnergy PAC between December 2009 and May 2018
- $500 from Juan Cespedes on Nov. 16, 2016
- $500 from Juan Cespedes on Dec. 29, 2017
- $250 from Matthew Borges on March 12, 2018
- $500 from Jeff Longstreth on April 4, 2018
- $5,000 from Juan Cespedes on Nov. 14, 2019
- $13,000 from Matthew Borges on Dec. 12, 2019
Mike DeWine and Jon Husted Transition Fund 2018
- $20,000 from FirstEnergy and the FirstEnergy PAC on Dec. 19, 2018
- $650 from Jeff Longstreth on Dec. 27, 2018; Longstreth's employer is listed as Generation Now
- $400 from Larry Householder on Jan. 2, 2019
- $2,500 from Matthew Borges on Jan. 8, 2019
- $2,500 from Juan Cespedes on Jan. 11, 2019
State Sen. Sean O’Brien of Bazetta, D-32nd
- $15,500 from FirstEnergy PAC FSL between 2011 and 2016
Former State Rep. Don Manning of New Middletown, R-59th
- $1,000 from Friends of Larry Householder on Nov. 23, 2018
- $250 from Neil Clark on April 12, 2019
- $5,000 from FirstEnergy PAC on March 12, 2020
State Rep. Michele Lepore-Hagan of Youngstown, D-58th
- $4,000 from FirstEnergy PAC in October 2015 and December 2015
- $500 from FirstEnergy PAC on April 29, 2020
Republican David Simon, who faces Lepore-Hagan in November
- $560 from JPL and Associates on March 3, 2020; JPL is Longstreth's consulting firm
State Sen. Mike Rulli of Salem, R-33rd
- $1,000 from FirstEnergy PAC on March 5, 2020
State Rep. Mike O’Brien of Warren, D-64th
- $500 from FirstEnergy PAC on Oct. 14, 2018
Source: Ohio Department of State