Exec: Utility bled cash before alleged Ohio speaker bribes

Jan 23, 2023, 9:59 PM | Updated: Jan 24, 2023, 12:16 pm
CORRECTS THAT PLANTS ARE FORMERLY OWNED BY FIRSTENERGY -  Former Ohio House Speaker Larry Household...

CORRECTS THAT PLANTS ARE FORMERLY OWNED BY FIRSTENERGY - Former Ohio House Speaker Larry Householder, center, walks into Potter Stewart U.S. Courthouse with his attorneys, Mark Marein, left, and Steven Bradley, right, before jury selection in his federal trial, Friday, Jan. 20, 2023, in Cincinnati. Householder and former Ohio Republican Party chair Matt Borges are charged with racketeering in an alleged $60 million scheme to pass state legislation to secure a $1 billion bailout for two nuclear power plants formerly owned by Akron, Ohio-based FirstEnergy. Householder and Borges have both pleaded not guilty. (AP Photo/Joshua A. Bickel)

(AP Photo/Joshua A. Bickel)

              CORRECTS THAT PLANTS ARE FORMERLY OWNED BY FIRSTENERGY -  Former Ohio Republican Party chair Matt Borges, right, walks toward Potter Stewart U.S. Courthouse with his attorneys Todd Long, left, and Karl Schneider, center, before jury selection in his federal trial, Friday, Jan. 20, 2023, in Cincinnati. Borges and former Ohio House Speaker Larry Householder are charged with racketeering in an alleged $60 million scheme to pass state legislation to secure a $1 billion bailout for two nuclear power plants formerly owned by Akron, Ohio-based FirstEnergy. Householder and Borges have both pleaded not guilty. (AP Photo/Joshua A. Bickel)
            
              CORRECTS THAT PLANTS ARE FORMERLY OWNED BY FIRSTENERGY -  Former Ohio Republican Party chair Matt Borges, right, walks toward Potter Stewart U.S. Courthouse with his attorneys Todd Long, left, and Karl Schneider, center, before jury selection in his federal trial, Friday, Jan. 20, 2023, in Cincinnati. Borges and former Ohio House Speaker Larry Householder are charged with racketeering in an alleged $60 million scheme to pass state legislation to secure a $1 billion bailout for two nuclear power plants formerly owned by Akron, Ohio-based FirstEnergy. Householder and Borges have both pleaded not guilty. (AP Photo/Joshua A. Bickel)
            
              CORRECTS THAT PLANTS ARE FORMERLY OWNED BY FIRSTENERGY -  Former Ohio House Speaker Larry Householder, center, walks into Potter Stewart U.S. Courthouse with his attorneys, Mark Marein, left, and Steven Bradley, right, before jury selection in his federal trial, Friday, Jan. 20, 2023, in Cincinnati. Householder and former Ohio Republican Party chair Matt Borges are charged with racketeering in an alleged $60 million scheme to pass state legislation to secure a $1 billion bailout for two nuclear power plants formerly owned by Akron, Ohio-based FirstEnergy. Householder and Borges have both pleaded not guilty. (AP Photo/Joshua A. Bickel)
            
              CORRECTS THAT PLANTS ARE FORMERLY OWNED BY FIRSTENERGY -  Former Ohio House Speaker Larry Householder, left, walks toward Potter Stewart U.S. Courthouse with his defense team before jury selection in his federal trial, Friday, Jan. 20, 2023, in Cincinnati. Householder and former Ohio Republican Party chair Matt Borges are charged with racketeering in an alleged $60 million scheme to pass state legislation to secure a $1 billion bailout for two nuclear power plants formerly owned by Akron, Ohio-based FirstEnergy. Householder and Borges have both pleaded not guilty. (AP Photo/Joshua A. Bickel)
            
              CORRECTS THAT PLANTS ARE FORMERLY OWNED BY FIRSTENERGY -  Former Ohio House Speaker Larry Householder waits to retrieve his personal items after going through security at Potter Stewart U.S. Courthouse before jury selection in his federal trial, Friday, Jan. 20, 2023, in Cincinnati. Householder and former Ohio Republican Party chair Matt Borges are charged with racketeering in an alleged $60 million scheme to pass state legislation to secure a $1 billion bailout for two nuclear power plants formerly owned by Akron, Ohio-based FirstEnergy. Householder and Borges have both pleaded not guilty. (AP Photo/Joshua A. Bickel)

CINCINNATI (AP) — An arm of FirstEnergy Corp. was “bleeding cash” as it explored options for the two aging nuclear plants eventually rescued by Ohio House legislation that federal prosecutors say former Speaker Larry Householder championed in exchange for corporate bribes, a utility executive testified Tuesday.

Steven Staub, the company’s vice president and treasurer, told jurors on the second day of Householder’s corruption trial that power prices had gotten so low in the years leading up to the bill’s passage in 2019 that the Davis-Besse and Perry power plants in northern Ohio couldn’t cover costs, let alone make a profit.

“The company was just bleeding cash,” Staub said in response to questioning by Assistant U.S. Attorney Matthew Singer.

Staub said the plants were contributing nothing to the company’s bottom line but eating up 90% of executives’ time. Meanwhile, FirstEnergy shareholders were pressuring the company to exit the unprofitable business of unregulated power generation altogether, he said.

FirstEnergy’s desperate financial situation at the time of the alleged bribery scheme was among issues raised in second-day testimony as federal prosecutors argue their case against Householder and lobbyist Matt Borges, a former chair of the Ohio Republican Party, in U.S. District Court.

Another line of questioning focused on the limits imposed on operations of 501(c)4 nonprofit groups, often called “dark money” groups because they may accept unlimited contributions and aren’t required to report donors.

An indictment alleges Householder, Borges, three other people and a dark money group called Generation Now orchestrated an elaborate scheme, secretly funded by FirstEnergy, to secure Householder’s power, elect his allies, pass legislation containing a $1 billion bailout for the two nuclear plants and then sabotage an effort to overturn the bill by placing a referendum on Ohio’s statewide ballot. The arrests came in July 2020.

Under a deal to avoid prosecution, Akron-based FirstEnergy admitted to using a network of dark money groups to fund the scheme and to bribing the state’s top utility regulator. Sam Randazzo, at the time the chair of the Public Utilities Commission of Ohio, resigned after an FBI search of his home. He has not been charged and denies wrongdoing.

Two Householder associates, Jeff Longstreth and Juan Cespedes, and Generation Now have pleaded guilty. Longstreth and Cespedes are among witnesses scheduled to appear in the trial, which could last six weeks. A third defendant who pleaded not guilty died by suicide.

Charles Walker, an expert in nonprofit organizations for the Internal Revenue Service, told jurors Tuesday that 501(c)4 organizations are social welfare organizations whose efforts should benefit the broader community. They are not allowed to be used for a person’s own private purposes or to benefit insiders or unnamed outsiders with outsized control over their operations, he said.

Householder’s attorney asked Walker to clarify: Could dark money groups legally accept unlimited donations, support political candidates, lobby for causes and pay their own employees? Walker answered yes — but only as long as they met those other requirements.

Assistant U.S. Attorney Emily Glatfelter spent much of the afternoon entering tens of thousands of documents into the court record, including business records from a host of nonprofits, bank records, photos, legislative documents, videos, and records of calls to and from Householder’s home phone.

Blane Wetzel, the FBI agent in charge of the Householder case, began his testimony Tuesday detailing the evidence gathered by the government against the parties.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

FILE - An American flag is flown next to the Chinese national emblem during a welcome ceremony at t...
Associated Press

US moving ahead on plan to down Chinese balloon over ocean

The Biden administration is moving forward with a plan to shoot down a large Chinese balloon suspected of conducting surveillance on the U.S. military, by bringing it down once it is above the Atlantic Ocean where the remnants could potentially be recovered, according to two U.S. officials.
14 hours ago
In this photo provided by the U.S. Coast Guard Pacific Northwest, a Coast Guard rescue swimmer reac...
Associated Press

Man rescued by Coast Guard wanted in ‘Goonies’ fish incident

A man who was saved by a Coast Guard rescue swimmer at the mouth of the Columbia River as a massive wave rolled the yacht he was piloting Friday was wanted for a bizarre incident in which police said he left a dead fish at the Astoria, Oregon, home featured in the classic 1985 film, "The Goonies."
14 hours ago
FILE - An Amazon company logo on the company's building in Schoenefeld near Berlin, Germany, March ...
Associated Press

Amazon violated labor law with delivery app

A Spanish court has ruled that Amazon broke labor laws by forcing more than 2,000 delivery drivers to use an app that the company controlled for scheduling work and payments and requiring them to use their own cars and cellphones on the job.
14 hours ago
Harvard's Hasty Pudding Theatricals Woman of the Year Jennifer Coolidge, center, rides in a parade ...
Associated Press

Hasty Pudding celebrates Coolidge as its Woman of the Year

CAMBRIDGE, Mass. (AP) — “The White Lotus” actress Jennifer Coolidge is being celebrated Saturday as the 2023 Woman of the Year by Harvard University’s Hasty Pudding Theatricals. As the oldest theatrical organization in the nation and one of the oldest in the world, since 1951, Hasty Pudding Theatricals has bestowed this award annually on women […]
2 days ago
Members of the ground crew secure the site after a United airlines flight made an emergency landing...
Associated Press

Engine problems force Vegas-bound flight to land in Nebraska

LINCOLN, Neb. (AP) — A United Airlines flight headed from Chicago to Las Vegas made an unplanned stop in Nebraska on Saturday after the pilot reported engine problems. Mark Grant, a communications operator at the Lincoln Airport, said 326 passengers and crew members were aboard the Boeing 777 when it took off from O’Hare International […]
2 days ago
CORRECTS TO KINGSTOWN, NOT KINGSTON - In this photo provided by Brian Branch, a large balloon drift...
Associated Press

Eyes on the sky as Chinese balloon shot down over Atlantic

Eyes were locked on the Carolina skies Saturday as the suspected Chinese spy balloon that traversed the U.S. over the past week drifted over the Atlantic Ocean and was shot down by a fighter jet. In Myrtle Beach, South Carolina, a crowd lining the beach boardwalk cheered as the balloon was struck by a missile […]
2 days ago

Sponsored Articles

safety from crime...

As crime increases, our safety measures must too

It's easy to be accused of fearmongering regarding crime, but Seattle residents might have good reason to be concerned for their safety.
Comcast Ready for Business Fund...
Ilona Lohrey | President and CEO, GSBA

GSBA is closing the disparity gap with Ready for Business Fund

GSBA, Comcast, and other partners are working to address disparities in access to financial resources with the Ready for Business fund.
SHIBA WA...

Medicare open enrollment is here and SHIBA can help!

The SHIBA program – part of the Office of the Insurance Commissioner – is ready to help with your Medicare open enrollment decisions.
Lake Washington Windows...

Choosing Best Windows for Your Home

Lake Washington Windows and Doors is a local window dealer offering the exclusive Leak Armor installation.
Anacortes Christmas Tree...

Come one, come all! Food, Drink, and Coastal Christmas – Anacortes has it all!

Come celebrate Anacortes’ 11th annual Bier on the Pier! Bier on the Pier takes place on October 7th and 8th and features local ciders, food trucks and live music - not to mention the beautiful views of the Guemes Channel and backdrop of downtown Anacortes.
Swedish Cyberknife Treatment...

The revolutionary treatment of Swedish CyberKnife provides better quality of life for majority of patients

There are a wide variety of treatments options available for men with prostate cancer. One of the most technologically advanced treatment options in the Pacific Northwest is Stereotactic Body Radiation Therapy using the CyberKnife platform at Swedish Medical Center.
Exec: Utility bled cash before alleged Ohio speaker bribes