COLUMBUS, Ohio – Prosecutors got it wrong, a lawyer for ex-Ohio House speaker Larry Householder said in court earlier this week, when they accused him of improperly using more than $400,000 in political funds to fix up his vacation house in Florida, among other personal expenses.
The money was actually a loan from Jeff Longstreth, a former top political aide, Householder attorney Steven Bradley told jurors during the opening day of Householder’s trial earlier this week on a federal racketeering charge.
“You heard the government describe that Larry Householder benefited to the tune of almost $500,000 for his participation in this illicit bribery scheme,” Bradley said. “That’s not what the evidence is going to show. The evidence to show that Jeff Longstreth loaned money to Larry Householder, and he was transparent about it.”
But public records show Householder never disclosed owing Longstreth any money on the financial disclosure forms lawmakers are required to file each year, including a mandatory section for debts of $1,000 or greater.
Householder’s 2019 financial disclosure report, filed the following year, disclosed no debts at all. That year, using money left over from a successful political effort to defeat a nuclear bailout bill, Householder had received $101,000 from Longstreth, to cover costs associated with his house, prosecutors and the FBI have said in court records.
Prosecutors also have said Householder spent hundreds of thousands of dollars to settle lawsuits from 2017 and 2018 involving a failed business deal, as well as $20,000 to cover credit-card related expenses in 2020.
Householder disclosed no debts in 2020 either. But he did disclose receiving an unspecified gift from Longstreth for both 2019 and 2020, according to his financial disclosures. State ethics laws do not require lawmakers to disclose the details of such gifts when they don’t come from a lobbyist or lobbying organization.
Tony Bledsoe, the Ohio legislative inspector general, generally discussing state ethics laws, said in an interview that Ohio state lawmakers are required to disclose all loans of $1,000 or greater. There is an exception for debts quickly paid off within a month in the case of a typical credit card, he said.
Otherwise, all loans, including zero-interest loans, must be disclosed, Bledsoe said.
“A loan is a loan. If I’ve entered into an agreement to pay it back, that is a creditor,” Bledsoe said. “A gift is something I am provided with no expectation of repayment.”
Lawmakers must fill out the financial disclosure forms annually, with potential fines or criminal penalties for failing to submit them on time or failing to fill them out completely. Knowingly filing a false disclosure is a first-degree misdemeanor, according to the form.
Prosecutors have said the more than $400,000 Householder spent for personal reasons came from Generation Now, a “dark money” nonprofit which Longstreth ran and which prosecutors have said Householder secretly controlled. Householder and Longstreth used Generation Now, prosecutors have said, to funnel $60 million from Akron-based FirstEnergy Corp. to help Householder politically so he could pass House Bill 6, which would have charged Ohio electricity customers $1.2 billion to bail out two nuclear plants owned by a former FirstEnergy subsidiary.
Prosecutors are portraying Householder’s spending of the political funds as evidence that he led a corrupt scheme that personally enriched him and other participants. They’re paying particular attention to Householder’s home in Florida – among the witnesses the government plans to call during Householder’s ongoing trial is a contractor who performed renovations there.
“In this case, [the goal] is political ambition and enriching yourself. And when you create a corrupt political machine that’s funded by bribery and sustained through money laundering, that’s racketeering,” Emily Glatfelter, the lead federal prosecutor on the case, told jurors Monday during her opening statement.
But Bradley, Householder’s lawyer, told jurors during his opening statement that the more than $400,000 was actually a loan from Longstreth. The two of them went to a law firm together to document the loan, and Householder spent the money to settle business debts related to a failed investment in a coal mining business in Alabama, so he could sell the house in Florida.
Householder planned to use the proceeds from the house sale to repay the loan, Bradley said.
But the house also was damaged in a hurricane, so Householder then spent another $140,000 to repair it so it could be sold, Bradley said. Longstreth dealt with the contractor and law firms, paying them directly.
Householder sold the home last year for $690,000, public records show.
“Jeff Longstreth paid money to a law firm, paid money to a general contractor in Florida, paid money toward a settlement associated with this coal mine investment gone bad, but all with the expectation that it was a loan that was going to be repaid,” Bradley said. “And not that it was Larry’s cut of some illegal bribery scheme.”
Read more stories from the trial here.
Andrew Tobias covers state government and politics for Cleveland.com and The Plain Dealer. Read more of his work here.