Corruption trial texts: OH AG Yost didn’t speak out against bailout because of utility support

Credit: Jay LaPrete

Credit: Jay LaPrete

Editor’s note: This story was originally published in the Ohio Capital Journal.

CINCINNATI — In June of 2019, Ohio Attorney General Dave Yost thought a proposed utility bailout was a bad law, but he didn’t publicly oppose it because of support he’d received from the bailout’s primary beneficiary, FirstEnergy, according to lobbyists’ text messages displayed in court on Friday.

Prosecutors displayed the messages as part of the racketeering trial of former House Speaker Larry Householder and Matt Borges, a former Ohio Republican Party Chairman who was acting as a lobbyist at the time the utility bailout was debated and passed. They are accused in a scheme to use $61 million to make Householder speaker in 2019 so he could pass and protect a $1.3 billion bailout that mostly went to protect FirstEnergy’s failing nuclear and coal plants.

In another development Friday, FBI Agent Blane Wetzel revealed the origin of the investigation and how Householder’s bad timing played into it.

At the time Householder and Borges were arrested in July 2020, federal prosecutors said it was likely the biggest bribery and money laundering scheme in Ohio history. Two months later, as he announced a civil suit against FirstEnergy, Yost echoed those sentiments.

“Corruption doesn’t happen on an industrial scale like this without cash,” he said in a Sept. 23, 2019, press conference. “And it’s incredibly important at this moment in our state’s history to send a message that the Ohio political system, the Ohio law-making system, the regulatory environment is not for sale. If you shut off the money spigot, the corruption withers.”

But behind the scenes 15 months earlier — according to text messages between Borges and lobbyist Juan Cespedes — Yost was pulling his punches on the bailout. Borges said Yost was doing so partly because of $24,000 he received from FirstEnergy and Borges in the cycle leading up to the 2018 election and the subsequent legislative session during which the bailout was passed.

Cespedes has pleaded guilty in the scandal and is expected to testify soon in the Householder trial.

After the scandal broke, Yost announced that he would donate his FirstEnergy-related contributions to charity.

But according to Borges, who had run earlier campaigns for Yost, the FirstEnergy money spigot helped guide the attorney general’s conduct as the bailout was making its way through the legislature. Text messages indicate that Borges was assigned to try to enlist Yost’s help with the bailout.

The legislation, House Bill 6, passed the Ohio House on May 29, 2019, and by the time of the June 26, 2019, text conversation between Borges and Cespedes, opposition to the bailout was growing as it was being debated in the Senate.

One source of opposition was from outside groups that were planning a ballot initiative to repeal HB 6 if it passed. Borges and Cespedes discussed trying to make it exempt from repeal by treating it as a revenue bill and calling it a tax — based on a $1 subsidy built into the measure.

Cespedes asked Borges what the attorney general thought.

“He’s sympathetic, but he wants to go back and look at the law,” Borges replied.

As they discussed the matter further, Borges said “Don’t repeat this,” but Yost believed the bailout was a bad law.

Yost “‘would be out front (in opposition) if not for (FirstEnergy) support and your involvement,’” Borges quoted Yost as saying.

As attorney general, Yost also would have to approve any repeal language before it went on the ballot. The AG also wanted to help with that if he could, Borges said.

“If there’s any way the law will allow him to reject the language, he will do it,” Borges texted.

Later in the day, prosecutors played a recording of a phone message Yost left with Householder in which Yost discussed background checks related to petitions to get the repeal on the ballot. While it might be unusual for the attorney general to discuss such matters with an interested party, Yost would eventually approve petitions and ballot language and allow the election to proceed.

After a bitter, xenophobic and expensive fight, the measure ultimately failed.

Yost has been subpoenaed in the case, and his spokeswoman on Friday declined to comment on the text messages.

“He was subpoenaed to potentially be a witness in this case,” the spokeswoman, Bethany McCorkle, said in an email. “At this time it is inappropriate for him to comment.”

In a separate development, Wetzel, the FBI agent, explained how his investigation started. He’d been contacted by Rep. Dave Greenspan, R-Westlake, because Greenspan was concerned about the propriety of HB 6, which members had been subjected to great pressure to support.

Wetzel testified that he and Greenspan met at a Columbus Bob Evans restaurant to discuss the matter on May 28, 2019 — the day before the initial version of the bailout was passed by the House. Wetzel didn’t describe what Greenspan’s claims were, but during the meeting, the lawmaker got a text from Speaker Householder.

The text asked Greenspan to delete all previous texts regarding House Bill 6, the agent said. That prompted Wetzel to take steps to obtain those communications.

Testimony resumes Monday in a trial that is expected to last into March.

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