'In a league of its own': Ohio is No.1 state when it comes to public corruption, experts say

Laura A. Bischoff
The Columbus Dispatch

Ohio's public corruption case involving $61 million in bribes in exchange for a $1.3 billion bailout is the biggest open investigation in any Statehouse in America — surpassing a similar scandal in Illinois and two closed-out cases in New York.

The Ohio case involves big money, a Fortune 500 company, top political leaders, 4.5 million electricity customers across the state and the suicide death of a defendant.

"Historically, I haven't seen anything like it," said FBI Supervisory Special Agent Matthew DeBlauw, who leads the public corruption squad in Columbus. "This case is in a league of its own."

More:FBI agent: 'There's more accountability to be had' in Ohio public corruption case

So far, five Ohioans have been charged in U.S. District Court with racketeering. Akron-based FirstEnergy Corp. fired its chief executive and other top managers and lobbyists, disclosed it paid $4.3 million to someone who became an Ohio utility regulator, and is in early talks with federal prosecutors to avoid prosecution. And FBI agents searched the home of then Public Utilities Commission of Ohio chairman Sam Randazzo, who then resigned.

Public corruption watchdogs told the USA Today Network Ohio that the House Bill 6 case, an open investigation against another previous House speaker and several city-level cases, catapults Ohio ahead of the pack.

"The whole thing is amazing in scope. It's incredible," said Todd Wickerham, former FBI Special Agent in Charge of the Cincinnati office.

Multiple investigations in Ohio

The case, which began at least three years ago, has yet to go to trial and indictments are allegations that the government must prove in court.

"I believe in the justice system and I believe that if everything works the way it's supposed to, the truth will come out and as I've said, I'm innocent," Householder told reporters last fall in the House chambers. "I intend to absolutely defend myself as best I can."

Ex-Ohio House Speaker Larry Householder talks to the press outside of the House of Representatives in th Ohio Statehouse after returning for the first time since being charged in a $60 million bribery scandal.

Michael Miller, a former Franklin County prosecutor turned criminal defense attorney, said the U.S. Attorney's office typically brings charges only on strong case but that doesn't mean it's a slam dunk.

"These white collar cases, non-violent cases, can be very difficult," Miller said. It requires jurors to follow the money and draw conclusions about intentions. "You get into these things and there is no guarantee. It'll be a vigorous defense, it'll be a vigorous prosecution."

In July 2020, the undercover case went public with the arrests of Ohio House speaker Larry Householder, R-Glenford, former Ohio Republican Party chairman Matt Borges, lobbyists Neil Clark and Juan Cespedes and political strategist Jeff Longstreth. Householder and Borges have pleaded not guilty; Cespedes and Longstreth pleaded guilty in October; Clark died by suicide in March.

On top of the House Bill 6 case, the FBI says its investigation of former Ohio House speaker Cliff Rosenberger remains open and there are corruption cases pending in Toledo and Cincinnati. And federal prosecutors recently won convictions in a case against a former Dayton city commissioner and others.

"I'd say you guys are doing very good in the corruption race, which has not been traditional. Ohio has not been one of the major corruption states," said Dick Simpson, political science professor at University of Illinois-Chicago and a former Chicago alderman.

Corruption cases in other statehouses

Five days before the Ohio case became public, federal prosecutors in Illinois announced that Commonwealth Edison Co. agreed to pay a $200 million fine to resolve an investigation into a years-long bribery scheme. The utility company admitted that from 2011 to 2019 it gave do-little jobs, vendor subcontracts and money to influence high-level elected officials who set the company's electricity rates. A former top executive pleaded guilty while three lobbyists and the former CEO of ComEd have pleaded not guilty.

Implicated but not charged in the Illinois case is Mike Madigan, who had served as House speaker since 1983 and led the Illinois Democratic Party. He is no longer a state lawmaker or party chairman.

The New York State Assembly was rocked by two separate cases involving top lawmakers in 2015. After a protracted legal battle, Sheldon Silver, the former long-time speaker of the New York State Assembly, was sentenced to seven years in prison for bribery and money laundering and Dean Skelos, former Senate majority leader, was sentenced to 51 months for bribery and extortion.

"Those three cases are the biggest state legislative examples. Other states that have scandals of the same sort would be New Jersey and Louisiana," Simpson said. He noted that Louisiana has had two governors go to federal prison and Illinois has had four governors sent to prison.

Former Ohio governor Bob Taft pleaded no contest to misdemeanor ethics charges in 2005. He was the first sitting Ohio governor to face criminal charges.

Simpson analyzed U.S. Department of Justice data on public corruption convictions from 1976 to 2019 and ranked states by convictions per capita. Leading the list were the District of Columbia, Louisiana, and Illinois.

Ohio ranked 8th. 

How corruption cases are handled by the feds

When Robert Mueller III directed the FBI, he named public corruption as a top priority and in 2008 the bureau established teams in state capitals. The Ohio anti-public corruption team based in Columbus started in 2013.

Unlike most other agencies, the FBI has the resources and expertise to conduct long, tedious and complex public corruption investigations, said FBI Special Agent in Charge Chris Hoffman.

"With a politician, unless you get them with their hand in the cookie jar, it's hard to convict. What I mean by that is they're very popular people. They've been elected because of their popularity and their charisma. People don't want to believe that they'd be dishonest," Hoffman said. "Unless you have them on paper, video or you have substantial financial evidence, cooperating witnesses, undercovers – unless you have that type of evidence, they're very difficult to see to conviction."

U.S.attorney David M. DeVillers, right, and Chris Hoffman, left, FB Special Agent in Charge talk about the corruption charges against Ohio House Speaker Larry Householder at the U. S. Attorney's office in Columbus July 21, 2020.

DeBlauw, who began supervising the team in September, said the team now includes staff from the FBI, Columbus Police, Ohio auditor, Ohio attorney general and the federal departments of labor and transportation.

The team uses wire taps, surveillance, undercover stings, GPS trackers, confidential informants, subpoenas and search warrants. These techniques require approval by managers in the Cincinnati office as well as FBI headquarters, DeBlauw said.

The 80-page criminal complaint on the HB6 case indicates agents recorded phone calls, pulled bank records, issued subpoenas, executed search warrants and worked with confidential informants.

While Hoffman and DeBlauw won't disclose when the investigation started, the complaint references calls were being recorded as early as January 2018.

Once cases go to court, they're slow moving, complex and challenging, according to Ann Rowland, who retired after 37 years as a federal prosecutor in Ohio's northern district where she handled the case of former Cuyahoga County commissioner Jimmy Dimora.

The challenges include proving quid pro quo – that public officials intentionally took something in exchange for an official act, she said.

"They don't usually sign contracts to that effect so we have to prove it through their words, actions and inferences and that can be difficult," Rowland said. "And they tend to do this in private."

FBI agents remove items from the German Village home of Public Utilities Commission of Ohio Chairman Sam Randazzo in Columbus on Nov. 16, 2020.

Ohio's state corruption case is groundbreaking

A unanimous decision in 2016 by the U.S. Supreme Court overturned a 2014 bribery conviction against former Virginia governor Bob McDonnell. The decision curtailed what kind of official act would be considered corrupt when done in exchange for money or freebies.

Legal experts predicted the ruling would make it much more difficult for federal prosecutors to prove charges of public corruption against elected officeholders.

The House Bill 6 case may be charting new ground in public corruption prosecutions by alleging that dark money – undisclosed political money that is common in campaigns and advocacy – was used as bribe money.

DeBlauw said the dark money aspect has brought a new tactic into the game.

"The old bread and butter corruption for the bureau was a cash in the pocket kind of thing," DeBlauw said. "This is a much more advanced potential form of bribery. It's an avenue for bribery."

Hoffman said a common denominator in corruption cases is greed. Householder allegedly used about $422,000 of the $60 million to pay off credit card debts, pay a legal settlement and fix a Florida condo, according to the FBI criminal complaint.

"He definitely personally benefited but what I think is fascinating about some of these big, complex cases is some of the guys don't need the money as much as they want the power," Hoffman said. "In order to have that power base, elections cost money, having friends elected into positions of power, all that costs money."

Defense attorney Karl Schneider, who represents Borges in the HB6 case, said "many cases across the country seem to be attempts to achieve campaign finance reform through prosecution, rather than legislation. Criminalizing spirited, even highly aggressive political advocacy, is dangerous."