An Ohio jury is about to decide whether politicians enlisted by an energy company to seek a $1.3 billion state bailout of its two failing nuclear plants pushed the bounds of campaign spending too far.
Akron-based FirstEnergy Corp. secretly spent more than $60 million beginning in 2018 to help then-Republican state Rep. Larry Householder win the Ohio House speakership and secure the bailout. Federal prosecutors called the arrangement an illegal pay-to-play bribery scheme.
Much of the company’s donations flowed through an organization called Generation Now and other nonprofit groups organized under 501(c) (4) of the tax code that aren’t required to disclose their donors.
Mr. Householder, former Ohio Republican Party Chairman Matt Borges, several other political aides and Generation Now all were charged in 2020 with participating in a racketeering conspiracy in what officials say is the largest political corruption case in Ohio history. Closing arguments in the trial in U.S. District Court in Cincinnati are scheduled to begin Tuesday. The two men now on trial—Messrs. Householder and Borges—both pleaded not guilty. The other defendants pleaded guilty.
FirstEnergy admitted as part of a deferred prosecution agreement that it used nonprofit groups “to conceal payments for the benefit of public officials and in return for official action.” The company paid a $230 million fine and agreed to cooperate with investigators.
Supreme Court decisions, including in the 2010 Citizens United case, have allowed companies, trade groups and unions to spend unlimited sums supporting political candidates. That has meant more big money in politics, including through nonprofits that aren’t legally required to disclose their donors.
Republicans and Democrats deride opponents who make use of such groups as accepting “dark money,” but the organizations have become ubiquitous in local, state and federal politics.
“The law is already very permissive, and still every day we see candidates and their donors stretching those limits—to the point, as in Ohio, where it triggers an FBI investigation,” said Adam Bozzi, a spokesman for End Citizens United, a Washington organization that pushes for less corporate and big donor money in politics.
Supporters of politically active nonprofits contend that the privacy of donors should be protected so that they don’t face the risk of retaliation from people who don’t agree with them.
Generation Now described its mission in tax documents as promoting energy independence and economic development. The group, which was led by Mr. Householder’s top political aide, pleaded guilty and acknowledged its real purpose was to take undisclosed donations from FirstEnergy and use them to benefit Mr. Householder and others.
Attorneys for Mr. Householder and Mr. Borges say the donations were ordinary political spending, permitted under court rulings that have allowed companies and other donors to spend heavily on politics.
At the seven-week trial, prosecutors detailed a relationship between Mr. Householder and the energy company that involved visits to the company’s baseball stadium suite and trips on its private jet. Messrs. Householder and Borges could be sentenced to as much as 20 years in prison if convicted.
Mr. Householder took the stand last week and testified that there was no quid pro quo for the donations his nonprofit group received from FirstEnergy. Mr. Householder and other bailout proponents said closure of the nuclear plants would hurt the area’s economy and limit Ohio’s efforts to generate its own energy.