Super lobbyist Neil Clark and federal investigations: What’s going on?

Credit: DaytonDailyNews

Neil Clark is a long-time lobbyist in Columbus. He is charged with racketeering in a public corruption case involving $60 million in alleged bribes.

Credit: DaytonDailyNews

Federal authorities have three recent investigations into state politics and Neil Clark is charged in one case, he lobbied against a reform bill that is the centerpiece of the second case, and in the third, Clark was the public face of an online charter school accused of fraud.

Clark is among four men who pleaded not guilty Thursday in U.S. District Court on racketeering charges in what U.S. Attorney David DeVillers said is likely the biggest bribery scheme in Ohio history. Former Ohio House speaker Larry Householder’s arraignment on racketeering was delayed while he hires legal counsel.

Clark was the prime spokesman for the Electronic Classroom of Tomorrow and lobbyist for its founding organization Altair Learning Management before the online charter school abruptly shut down in January 2018. Then state auditor Dave Yost referred a scathing audit on ECOT to local and federal prosecutors and the FBI for possible criminal investigation in May 2018.

The audit said ECOT purposely inflated the amount of time it claimed its students were engaged in learning, leading the now-closed online school to receive more money than it deserved from the state.

ExploreWho is Neil Clark?

Clark represented a segment of the payday lending industry while House Bill 123 — a reform bill — stalled under then speaker Cliff Rosenberger.

Rosenberger made three international trips with payday lending industry representatives. Those trips and HB123 are at the center of an active FBI investigation, records show. Clark and his clients did not participate in the international trips but payday lenders represented by Clark testified against the reform bill.

No charges have been filed against anyone in the ECOT investigation or the probe into Rosenberger and the payday lending bill.

Jennifer Thornton, spokeswoman for DeVillers, declined to comment when asked about Clark and his role in the three recent investigations.

In the latest case, Clark allegedly participated in a conspiracy to elect Householder as House speaker and deliver and defend a $1.3 billion bailout bill for Akron-based FirstEnergy.

ExploreHouseholder wanted to extend term limits, sources say

Federal prosecutors do not identify Company A and two subsidiaries by name in the criminal complaint but it is a reference to Akron-based FirstEnergy Corp., FirstEnergy Solutions and FirstEnergy Service Co. FirstEnergy spun off its generation business into FirstEnergy Solutions, which filed for bankruptcy in March 2018 and emerged in February 2020 as Akron-based Energy Harbor.

FirstEnergy Service Co., provides the corporation with “legal, financial and other corporation support services” and provided most of the money sent to Generation Now, according to an FBI affidavit. First Energy Corp. CEO Chuck Jones also heads FirstEnergy Service Co.

In addition to Householder and Clark, lobbyist Juan Cespedes, former Ohio GOP chairman Matt Borges and Householder’s political strategist Jeff Longstreth are also charged with racketeering. Cespedes, Borges, Longstreth and Clark entered not guilty pleas.

Clark, a well-known figure around the Ohio Statehouse, is a multi-client lobbyist who is hired by businesses and organizations to press their agenda with state leaders. Within days of his arrest, his three dozen clients cut ties with him.

In recent months, Clark has represented clients with interests in two other bills pending that Householder has strongly supported: House Bill 194, which would legalize sports betting and give oversight to the Ohio Lottery Commission; and House Bill 249, which would improve the legal position for victims of Dr. Richard Strauss to sue Ohio State University.

Credit: DaytonDailyNews

Who is Larry Householder

Credit: DaytonDailyNews

The university reached a $40.9 million settlement in May 2020 with 162 plaintiffs. But dozens of other victims represented by Clark’s now former client, Sharp Law, are still pursuing lawsuits against Ohio State.

In November 2019, Clark told the Dayton Daily News that $500 million should be a starting point for OSU to put into a victims fund.

Even Householder weighed in, saying publicly in November 2019 that it was time for the university to “do the right thing” and, “We wish Ohio State would step up and take care of their obligation.”

ExploreAbuse victims to OSU leaders: Are you going to let us down again?

Clark also represented Georgia-based Intralot USA, which holds the technology contract with the Ohio Lottery Commission. Scott Hoss, Intralot product director, testified on HB194, urging Ohio to allow sports betting and give oversight authority to the Ohio Lottery Commission.

Tucked into the 141-page bill passed by the House under Householder’s leadership is a requirement that Ohio purchase 2,500 self-service kiosks within six months of the bill becoming law. Intralot sells such terminals, according to its website.

HB 194 passed the House on May 28 by an 83-10 vote and is now pending in the Senate. HB 249 is pending in a House committee.

Clark started out in politics as a staffer for the Ohio Senate Republican caucus.

Thirty-five years ago, he left the Senate, taking an expertise in state budget matters and plenty of connections. He joined forces with Paul Tipps, a former chairman of the Ohio Democratic Party and Montgomery County Democratic Party, to start State Street Consultants.

The lobbying power pair had more than a dozen lobbyists working on behalf of about 80 clients. Shortly after Tipps’ retirement in 2005, State Street Consultants fell into financial difficulties. Tipps and Clark ended up duking it out in court and the firm dissolved in 2008.

Clark then formed Grant Street Consultants in January 2009.

During his lobbying career, Clark has worked for strip clubs, gambling outfits, payday lenders, charter schools and nursing homes. Some of his work has been part of high-profile political fights, including a 2007 effort to block a law that put restrictions on strippers and patrons at dance clubs, a 2008 effort to block a law that regulated payday lenders, a 2013 fight over a bill that would have regulated gaming at internet cafes, and a 2015 statewide ballot issue to legalize recreational marijuana.

The 82-page criminal complaint alleges a complex bribery scheme: an energy company widely reported to be Akron-based FirstEnergy and its subsidiaries funneled nearly $61 million to a dark-money group, Generation Now, which Householder used to help elect pro-Householder legislators who would vote for him for speaker; Householder, in turn, pushed House Bill 6, which provided a $1.3 billion bailout to save nuclear power plants owned by FirstEnergy Solutions.

In an investigation that started more than a year ago, FBI agents subpoenaed bank and telephone records, executed search warrants, tapped phone lines and wired-up informants. Federal prosecutors allege that Clark acted as Householder’s proxy and one of his closest advisers in the fight to pass House Bill 6 and then defend it against an attempted referendum.

“When (Householder’s) busy, I get complete say. When we’re working on stuff, if he says, ‘I’m busy,’ everyone knows. Neil has the final say, not Jeff (Longstreth.) Jeff is his implementer,” the criminal complaint quotes Clark from a 2019 recorded conversation.

The complaint indicates federal agents were listening to Clark’s phone calls as far back as early 2018 when Householder asked Clark about contributions from payday lenders to a dark money group. Clark represented a handful of payday lenders, which lobbied against House Bill 123, a reform measure that stalled while Rosenberger was speaker.

ExploreAfter 11 rounds of voting, Ryan Smith picked as new Ohio House speaker

HB123 cleared the Ohio House on June 7 on a 71-17 vote — the day after Republican Ryan Smith was elected speaker, replacing Rosenberger.