FBI: Multiple groups involved in Ohio $60M corruption scheme
CLEVELAND (AP) — A lengthy FBI agent affidavit detailing an alleged $60 million corruption scheme led by one of Ohio's most powerful elected officials provides painstaking detail about groups and individuals who played roles in spending mostly corporate cash.
Only one of those groups is specifically named: Generation Now, a purported slush fund controlled by since-ousted Republican House Speaker Larry Householder and his closest political adviser, Jeffrey Longstreth.
Householder, Longstreth, three other individuals and Generation Now were indicted on federal racketeering charges last week, the same day Householder's House colleagues removed him as speaker.
Prosecutors allege nearly all of the money spent to get Householder elected speaker, push a $1 billion corporate bailout through the Legislature and fund a dirty tricks campaign to kill an anti-bailout voter referendum touched Generation Now in some way.
The $60 million came from what the affidavit and indictment describe as “Company A,” an obvious reference to FirstEnergy Corp. and its various affiliates. But there are a number of other groups that played key roles that are not identified. Using public records, media reports and clues in the affidavit, here are the names of the groups and a synopsis of the roles they played:
The affidavit and indictment detail how Householder and Longstreth used this dark money group as the main conduit for $60 million in payments from FirstEnergy Corp. affiliates to return Householder to power, push a $1 billion bailout for two aging nuclear plants through the Legislature and keep an anti-bailout referendum off the Ohio ballot.
Generation Now was incorporated in Ohio on July 26, 2017, to “promote social welfare and economic development.” Incorporation papers were signed by D. Eric Lycan, a Lexington, Kentucky, attorney who served as counsel for U.S. Senate Majority Leader Mitch McConnell's 2014 re-election campaign and was formerly counsel for the Kentucky Republican Party, leaving that position in April 2019.
Lycan did not return repeated messages seeking comment.
Akron-based FirstEnergy Corp. has acknowledged it is Company A that is referenced throughout the affidavit and indictment. FirstEnergy officials have long been aggressive in differentiating between the corporation and its affiliates, including one that operated two Ohio nuclear plants.
A FirstEnergy subsidiary called FirstEnergy Services Co. wired and wrote checks for most of the money sent to Generation Now, according to the affidavit. FirstEnergy Service Co., provides the corporation with "legal, financial and other corporation support services."
First Energy Corp. CEO and President Chuck Jones serves in the same leadership role for FirstEnergy Service Co.
FirstEnergy spokesperson Jennifer Young said Wednesday that the corporation is “conducting a thorough review of everything cited in the affidavit to determine the facts.”
“We believe the facts will become clearer as the investigation progresses,” Young said.
This is the unnamed political action group that helped Householder-supported House candidates win primaries in 2018 as part of the alleged scheme to further his aims of being elected House speaker and getting the the bailout legislation approved.
By matching descriptions in the affidavit with public records and media reports, the unnamed group is Growth & Opportunity PAC, incorporated in July 2015 by Lycan. Identified as “the attorney” in the affidavit, Lycan served as treasurer for Generation Now, according to incorporation records, Growth & Opportunity PAC and a related coalition.
The PAC spent $1 million funneled from Generation Now to aid Householder-backed candidates during the 2018 primary and another $1 million Generation Now wired to another organization tied to Lycan to help Householder candidates in the April 2020 primaries, according to the affidavit.
Descriptions in the affidavit show this unnamed group is Coalition for Growth & Opportunity, which Lycan incorporated in Delaware the day after he incorporated the similarly named PAC in 2015.
Lycan is listed as treasurer, and the affidavit said he controlled its bank account, although a resume for Longstreth obtained by FBI agents states he oversaw the coalition's political activities.
Earlier this year, the coalition received $1 million from Generation Now that was passed on to Growth & Opportunity PAC for House primary races. According to the affidavit, the coalition was used to fund PAC spending this year because of negative publicity surrounding Generation Now's spending efforts and the reluctance by Householder's candidates to be associated with Generation Now.
DARK MONEY GROUP 1
A dark money group separate from Generation Now, his was an organization that was used by Householder's “enterprise” to conceal money on media buys during the 2018 general election, according to the affidavit.
The group was incorporated in Ohio on Sept. 21, 2018, which matches state records and reporting by The Columbus Dispatch as a for-profit company called Hardworking Ohioans Inc.
Dark Money Group 1, The Dispatch, reported, was run by a Columbus lobbying firm and formed by two former Ohio House Republican senior staffers.
According to the affidavit, Dark Money Group 1 received nearly $1.5 million, including $670,000 from Generation Now, $500,000 from Company A and $300,000 from “other corporate interests.”
This is a group described in the affidavit as a nonprofit incorporated in Ohio on Feb. 8, 2017, two days after it was incorporated in Delaware. According to the affidavit, Its role was to funnel millions of dollars from Company A to Generation Now in 2018 and 2019.
The Cincinnati Enquirer identified the group two days after the release of the FBI affidavit as Partners for Progress and reported that former FirstEnergy lobbyist, Dan McCarthy, was the group's president.
McCarthy said he served as board president for Partners for Progress until he became Republican Gov. Mike DeWine's legislative director in late 2018.
“Any insinuation I was involved in this disgusting scheme is without merit,” McCarthy told the newspaper.
The affidavit indicates that Partners in Progress continued to work with Generation Now and Company A to successfully quash the anti-bailout referendum effort in the fall of 2019 after McCarthy went to work for DeWine.
This story has been corrected to report that D. Eric Lycan is the former, not current, counsel for the Republican Party of Kentucky.