The U.S. Attorney’s Office and FBI last week charged the speaker of the Ohio House of Representative and four others in a $61 million scheme to use $1 billion in ratepayers money to keep two decrepit nuclear power plants operating.
And, said the U.S. Attorney for the Southern District of Ohio, David DeVillers, at a press conference after the arrests on July 21: “This is by no means over. We are going to continue with this investigation.”
Those charged were involved in a “Conspiracy to Participate, Directly or Indirectly” in the scheme “through a Pattern of Racketeering Activity,” declared the “Offense Description” that headed an 81-page federal “Criminal Complaint.”
As DeVillers described it at a press conference as the “largest bribery, money laundering scheme ever perpetrated against the people of Ohio.”
FirstEnergy Corp., whose former subsidiaries owned the Davis-Besse nuclear power plant 21 miles from Toledo and the Perry nuclear power plant 40 miles from Cleveland, funneled “dark money,” he said, through a social welfare non-profit corporation to help Larry Householder become speaker of the Ohio House and get other legislators elected. Together, they then got a $1 billion bailout passed that places a fee on every electricity bill in the state through 2026 for the plants.
Arrested with Ohio House Speaker Larry Householder was former Ohio Republican Chairman Matt Borges, lobbyists Neil Clark and Juan Cespedes and political consultant Jeff Longstreth.
Atttorney DeVillers said that those involved in the scheme “were able to line their pockets.” Householder took in “a half a million dollars for his personal benefit.”
The “Criminal Complaint” speaks of how in 2016 “Company A Corp.’s [referring to FirstEnergy Corp.] “nuclear generation looked grim.” It and “its affiliates reported a weak energy market, poor forecast demands, and hundreds of millions of dollars in losses.” So, the company “actively sought a ‘legislative solution’ for its two-affiliated nuclear power plants in Ohio.” There are then pages and pages of details about the investigation.
The “Criminal Complaint” can be viewed online here.
The year-long federal investigation involved recordings, and conversations of the defendants are rough, some laced with obscenities. For example, the “Criminal Complaint” speaks about some legislative opposition to Householder’s seeking the speakership and Householder allegedly declaring: “Yeah, we can fuck them over later.”
Or, when a voter referendum was organized to challenge the bailout, the “Criminal Complaint” cites a “dinner club meeting on September 23, 2019, in the context of a discussion about the [referendum] Ballot Campaign. Householder told Clark in a recorded meeting: ‘It is so important, it is so important, that they are not successful, because when the legislature votes on something it needs to stay law.’ Staffer followed up, ‘it’s the beginning of your Speakership; it sets a bad precedent for the next six year, what we need to make them realize is that you (Householder) can’t be fucked with.’ Clark then agreed, ‘it sends the message to everyone else…if you attack a member, we’re going to fucking rip your dick off.’ Enterprise members thus made clear that preserving their legislative victory was necessary to proving the strength of the [Householder] Enterprise going forward.”
The “Householder Enterprise” backed 15 candidates in primaries in 2018, including Householder himself, and six additional ones in the general election, with most candidates winning and the voting for Householder to become speaker, and most voting for the bailout.
The ”Conclusion” of the “Criminal Complaint” states: “The above facts establish probable cause that Householder’s Enterprise is an association-in-fact enterprise affecting interstate commerce, and the Defendants conspired to participate in the conduct of affairs of the enterprise by agreeing that a co-conspirator would commit a pattern of racketeering activity. To summarize, while operating together—and functioning as Householder’s ‘team’—the Defendants enriched themselves and increased Householder’s political power by: engaging in a scheme to defraud the public…involving the receipt of millions of dollars in secret bribe payments through Householder’s 501(c) (4) account in return for Householder taking official action to help pass a legislative bailout for two nuclear power plants; bribing and attempting to bribe individuals working on behalf of the Ballot Campaign in an attempt to receive inside information and defeat the Ballot Campaign; and concealing the scheme, their illegal activity; and the source of the funds transferring the Company A-to-Generation-Now payments through other controlled entities and knowingly engaging in monetary transactions with the proceeds.”
Earlier, the Columbus Free Press ran an article by Bob Fitrakis and Harvey Wasserman headlined “Ohio’s Pro-Nuke Assault Threatens American Democracy with Violence & More.”
The November 2019 article began: “The nuclear industry’s violent assault on democracy in Ohio has taken a surreal leap. Ohio’s GOP secretary of state has now asked the Ohio Supreme Court NOT to provide a federal judge with answers about key procedural questions surrounding the state’s referendum process. The short-term issue is about a billion-dollar bailout for two nuke reactors and two coal burners. Long-term it asks whether targeted violence perpetrated by paid thugs will now define our election process. And whether the public referendum will remain a workable part of our democracy.”
“The battle starts,” it continued, “with House Bill 6, the now-infamous billion-dollar nuke bailout approved by the corrupt, gerrymandered Ohio legislature in late July. HB 6 forces all Ohio ratepayers to subsidize two crumbling nukes on Lake Erie, along with two decrepit coal burners, one of them in Indiana. It helps underwrite ten small solar farms, but undercuts much larger subsidies for other wind and solar facilities.”
“The Perry reactor east of Cleveland, and Davis-Besse near Toledo, are among the world’s most dangerous, decrepit reactors. Both were set to shut because they cannot compete with wind and solar, as well as fracked gas. But Akron-based FirstEnergy spent millions to ‘persuade’ the legislature to hand them a billion dollars to keep their uncompetitive, uninsured and essentially unregulated reactors on line.”
“When the bailout passed, a statewide group called Ohioans Against Corporate Bailouts turned in a petition for a repeal referendum on the 2020 ballot. The law allows 90 days for referendum sponsors to gather signatures to get on the ballot. In this case 265,711 would be required. Ohio’s Attorney General David Yost sat on the request for 19 days, then rejected it. OACB filed a second application, which the AG sat on for another 19 days before approving it. That left the petitioners just 52 days to gather signatures.”
“But signature gatherers were immediately attacked with violent threats and bribery offers. In the field, they (and potential signatories) were physically assaulted by ‘blockers’ hired by the nuclear industry.”
“And now Ohio’s Republican secretary of state has asked that Court NOT to comply, in a direct attempt to prevent Ohioans from voting on whether they’re to be forced to pay a billion dollar subsidy for two lethal, money losing atomic reactors,” the article went on. “This shocking combination of overt threats, bribery and outright physical violence, combined with judicial stall tactics by elected Ohio officials, breaks new ground in the assault on democracy itself in the American heartland.”
“From the rise in violent white supremacist bigotry, to unaccountable police murders, to Charlottesville, to the recent attack on Code Pink’s Medea Benjamin to the concerted Republican assault on paper ballots and fair, inclusive voting practices, it’s clear the GOP intends to gut democracy in 2020 and beyond,” said the article.
There was the piece by Kathiann M. Kowalski in the newsletter of the Energy News Network this March headlined “Dark money dominated Ohio’s nuclear subsidy saga.” It began: “After-the-fact filings show that First Energy’s generation subsidiary paid nearly $2 million to Generation Now, one of the special interest groups that orchestrated ads, political donations and other efforts behind Ohio’s nuclear and coal bailout.”
“House Bill 6 gutted Ohio’s renewable energy and energy efficiency standards while putting ratepayers on the book for nearly $1 billion in subsidies for nuclear power plants, plus an additional amount for aging coal plants. Multiple groups spent heavily to promote HB 6 and prevent a referendum on the law following its passage,” said the piece.
“In some cases, nonprofit and for-profit organizations funded each other or shared the same spokesperson. Groups active in the HB 6 campaign also had links to some of the same lobbyists and consultants who acted for companies that stood to benefit from HB 6…But only limited amounts of funding could be traced.”
“As First Energy Solutions’ bankruptcy case wrapped up in February and the company began doing business as Energy Harbor, a filing posted to the company’s investor relations page shows a wire payment of $1,859,457 from First Energy Solutions to Generation Now, Inc. on July 5, 2019.”
The article quoted Dave Anderson, policy and communications manager at the San Francisco-based Energy and Policy Institute, “who first spotted the Energy Harbor filing,” as saying this funding “proves that House Bill 6 was always primarily a bailout for the bankrupt utility and its wealthy investors…Powerful corporations, and utilities in particular, often fund groups to do their dirty work in an attempt to avoid accountability. In the case of Generation Now, that dirty work included millions of dollars in misleading ads and hiring petition blockers…”
The article said, “The rise of so-called ‘dark money’ groups, which don’t have to disclose their donors, follows a 2010 Supreme Court case, Citizens United, that held corporations have a constitutional right to unlimited spending.”
The piece noted how Generation Now was “formed in 2017 as a tax-exempt organization under Section 501(c) (4) of the Internal Revenue Code. That code section covers a broad range of civic and ‘social welfare’ organizations.”
With the arrest of the Ohio House speaker and his co-defendants, the organization Beyond Nuclear issued a statement by Kevin Kamps, its radioactive waste specialist, long involved in challenging Davis-Besse and Perry.
“What’s really scary is that the corruption is not just monetary, or legislative. Davis-Besse’s containment structure is corrupted, in the sense that the Shield Building is severely cracked, even to the point of potential collapse,” said Kamps. “The reactor pressure vessel is corrupted, in the sense of neutron embrittlement risking pressurized thermal shock through-wall fracture, as well as boric acid corrosion. The high-level radioactive waste storage pool is corrupted, in the sense that it is leaking. The replacement steam generators are corrupted, in the sense that they are experimental, maximizing profits at the expense of safety.”
“The physical corruption of the Davis-Besse nuclear power plant is what really worries me, regarding the health, safety, and environment for countless Ohioans—and Great Lakes residents beyond—downwind, downstream, up the food chain, and down the generations, in terms of the worsening risks of a catastrophic release of long-lasting hazardous radioactivity,” said Kamps.
“Davis-Besse should have been retired a long time ago, for the sake of safety alone. And yet the reactor sails ever deeper into the uncharted waters of reactor meltdown risk, while churning out ever more high-level radioactive waste, for which we have no good solution.
Perry, for its part, is infamous for worker over exposures to hazardous radioactivity. It was also the first U.S. atomic reactor to suffer damage from earthquake activity, a risk that only worsens with Perry’s age-related degradation,” said Kamps.
“Both atomic reactors should be shut down ASAP,” said Kamps. “Just consider the Nuclear Regulatory Commission CRAC-II study, short for Calculation of Reactor Accident Consequences, also known as the 1982 Sandia Siting Study, or as NUREG/CR-2239. For Davis-Besse, the report predicted 1,400 peak early fatalities, 73,000 peak early injuries, 10,000 peak cancer deaths, and $84 billion in property damage, in the event of a reactor core meltdown and catastrophic radiation release onto the winds and waves. Perry’s CRAC-II figures are 5,500 acute radiation deaths, 180,000 radiation injuries, 14,000 latent cancer fatalities, and $102 billion in property damage.”
“But as AP investigative reporter Jeff Donn reported in June 2011, in his series ‘Aging Nukes,’” said Kamps, “populations have soared around atomic reactors like Davis-Besse and Perry since 1982, so casualties would now be significantly higher. And when adjusted for inflation alone, Davis-Besse and Perry’s property damage figures would be $225 billion, and $273 billion, respectively. Given such risks, and now given the apparent corruption associated with their ongoing operations, both reactors should be shut down as soon as possible.”
“From 2010 to 2016,” Takoma Park, Maryland-based “Beyond Nuclear helped lead a coalition of environmental groups, including Don’t Waste Michigan, the Ohio Green Party, and Citizen Environmental Alliance of Southwestern Ontario, that unsuccessfully challenged Davis-Besse’s 20-year license extension,” he said. “From 2013 to 2014, Beyond Nuclear joined with that same coalition, as well as the Sierra Club Ohio Chapter, to challenge Davis-Besse’s experimental steam generator replacements; Fairewinds Energy Education chief engineer, Arnie Gundersen, served as expert witness for the coalition. In both proceedings, Toledo, Ohio attorney Terry Lodge served as the coalition’s legal counsel.”
At the press conference the day of the arrests, U.S. Atttorney DeVillers thanked the “brave people who came forward” with information on the scheme. And now, he said the investigation can move from “covert”—done to avoid having the targets know they were being probed—to “overt.” He said: “As of this morning there are a lot of FBI agents knocking on doors, there are a lot of FBI agents asking questions, fulfilling subpoenas.”
Chris Hoffman, special agent in charge of the Cincinnati office of the FBI, at the press conference described “public corruption” as the “top priority of the FBI.”
Ohio Governor Mike DeWine signed the bailout into law in July 2019.
There’s an effort underway to void the Ohio nuclear bailout because of it being a product of corruption. DeWine opposes voiding the bailout. “There was no indication that anything illegal was going on,” said the governor in an Associated Press report on the scandal.