Just days before the 2018 general election, the attack ad was launched on the airwaves: Montgomery County Commissioner Dan Foley had been pulled over and received a speeding ticket after telling police he drank a beer earlier that day.
The ad ran on Dayton area television stations and suggested that Foley, a Democratic candidate for the 43rd Ohio House district, had abused his power to avoid a citation for driving under the influence.
Foley wound up losing that election to his Republican opponent, Pastor J. Todd Smith, by 137 votes — less than a half of a percentage point.
Even Smith says the ad was “horrid” and didn’t show that Foley was drunk.
But that dirty campaign ad, federal investigators say in their complaint, illustrates how Ohio House Speaker Larry Householder secured his grip on the chamber’s gavel and assured those interested in a $1 billion nuclear energy bailout of its passage.
Smith later supported Householder for speaker and backed House Bill 6, the bailout measure now at the heart of a federal corruption investigation.
Battle for power
Householder, a powerhouse fund-raiser even before winning the speaker’s job in January 2019, had stopped giving to the House Republican caucus campaign account in 2018 because he said it was being used to put a thumb on the scales for then-Rep. Ryan Smith’s own bid to become speaker.
Both representatives recruited GOP candidates for House races across the state as they tried to secure enough votes to hold the gavel after then-Speaker Cliff Rosenberger was scheduled to reach his term limit at the end of 2018.
Householder and his alleged co-conspirators were arrested last week in what federal authorities identify as a racketeering scheme that allowed FirstEnergy, the biggest beneficiary of the bailout, to secretly give $60 million to back the bailout and cement Householder’s power by helping to elect his handpicked candidates.
Along with substantial campaign cash that was raised, spent and disclosed under Ohio law, the effort used millions of dollars in “dark” money, so dubbed because it is not disclosed to the public.
The dark money was routed through a web of shadowy groups and political action committees that then used the cash to buy advertisements in the 2018 primary and general elections and pay a political consulting firm that ran Team Householder campaigns.
A Dispatch/Enquirer/USA Today analysis sought to untangle which House candidates’ campaigns benefited from the alleged scheme.
Investigators wrote in their criminal complaint that the strategy to return Householder as speaker was hatched at the end of 2016, when Householder returned to the chamber he had ruled in the early 2000s. The campaign money soon would follow.
Here’s how the 82-page federal complaint says the scheme worked: An unidentified company that the details reveal to be First Energy and subsidiaries contributed to a dark money nonprofit, Generation Now, that a longtime Householder associate set up. The U.S. Supreme Court’s Citizens United ruling allowed such nonprofits to shield their contributors and expenditures from public view, assuring FirstEnergy that its backing would remain a secret.
Generation Now then funneled some of that money to a political consulting firm that Team Householder candidates would use, plus two other additional groups that would buy advertisements to support those candidates.
Those moves helped further conceal the real source of the funding and gave Householder candidates a leg up in the campaign. When those candidates won, Householder would have allies for future wars in the House.
In the case of Foley and Smith’s race in the 43rd district, the influx of cash might have flipped the election by paying for just the one ad. Before the election, Foley had a 10-point lead, according to the complaint, but Smith won on Election Day.
Householder would go on to brag to a potential 2020 candidate that he had pumped $500,000 into that race in the home stretch, according to the complaint. Investigators found a “rough cut” of the anti-Foley ad during a search of Householder associate Jeffrey Longstreth’s office, who also was charged in the conspiracy.
The 2018 primary
Householder made his biggest chess move in the 2018 primary. With then-Speaker Rosenberger on the verge of reaching his term limit, Householder and Smith started lining up candidates who would support them a year later when it came time to vote for a new chamber leader.
To help those campaigns, the criminal complaint says Householder and his associates channeled money from FirstEnergy and subsidiaries through the dark-money group Generation Now. It then deposited the funds into a separate account for the Growth and Opportunity PAC, which would be used to buy advertising supporting Householder candidates.
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Federal Election Commission documents confirm that Generation Now reported three contributions totaling $1 million in 2018. All of them went to the Growth and Opportunity PAC, representing nearly all the money the PAC raised that year.
The PAC dished out more than $854,000 in direct-mail and radio advertising in 21 House races — including Householder’s own district — from April 3-25, 2018. Campaign finance reports do not detail which candidate received support, noting only the district race where the PAC spent.
But Statehouse sources confirmed the identity of the Team Householder candidates. In the Republican Primary, 14 of the 15 who were running — including Householder himself — won their races. They were:
Jim Trakas, 6th District; Tim Barhorst, 19th District; Stu Harris, 21st District; Mike Rasor, 37th District; J. Todd Smith, 43rd District; Jamie Callender, 61st District; Kris Jordan, 67th District; Jena Powell, 80th District; Jon Cross, 83rd District; Tracy Richardson, 86th District; Brian Baldridge, 90th District; Shane Wilkin, 91st District; Brett Hudson Hillyer, 98th District.
Generation Now also sent about $1 million between the start of 2018 and the primary in May to Longstreth’s political consulting firm, JPL Associates, which was running Team Householder campaigns, according to the complaint.
Campaign finance reports show most of those candidates’ campaign committees, and the House Republican Campaign Committee, also paid JPL for campaign services. JPL pocketed another $872,627 from those groups.
Winning those primaries was key for Householder to claim the speakership. All nine of the Team Householder primary candidates who won their general election races went on to vote Householder for speaker.
The 2018 general election
Tracking spending in the general election is far more complicated. Instead of using the Growth and Opportunity PAC to buy ads, as in the primary, Householder’s group channeled money to a second, so-far unidentified dark-money group.
Hardworking Ohioans Inc, a for-profit corporation that doesn’t have to disclose its campaign finances, was formed in September 2018. FCC filings show that the treasurer of Hardworking Ohioans is Chad Hawley, co-founder of the Batchelder Group with former House Speaker William G. Batchelder.
The complaint says Hardworking Ohioans spent nearly $1.5 million on media buys between Oct. 22 and Nov. 2 to support Team Householder candidates.
About $670,000 of that came from Generation Now, $500,000 came directly from FirstEnergy and another $300,000 came from other corporate interests.
Hardworking Ohioans ran TV or radio ads in the following races, according to FCC records: Tim Barhorst, 19th District; Stu Harris, 21st District; Mike Rasor, 37th District; Bill Roemer, 38th District; Don Manning, 59th District; Jim Lutz, 75th District.
Statehouse sources have confirmed that Manning, Roemer, Rasor, Barhorst and Harris all were members of Team Householder. Manning and Roemer both won their seats and voted for Householder as speaker, but the other four were defeated by Democrats.
But the complaint lays out that that the dark money group also purchased television time for another critical ad: The one that showed Foley’s police stop and field sobriety test.
As with that ad just before Election Day, investigators wrote in the complaint that timing of the payments from FirstEnergy were critical to helping get Householder candidates elected. It helped Team Householder “flood the airways with negative ads against its opponents in the final days before the election.”
Sixty-two days after the general election — and about three years after investigators say the plan began — Householder reclaimed the speaker’s gavel.
And 197 days after Householder was sworn in as speaker, the General Assembly finalized its $1 billion nuclear energy bailout.
Gov. Mike DeWine immediately signed the bill into law.
This report was provided by the Columbus Dispatch, part of the USA TODAY Network. Dispatch reporters Anna Staver and Randy Ludlow contributed to this story.
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