Corruption trial texts: OH AG Yost didn’t speak out against bailout because of utility support

BY: MARTY SCHLADEN – Ohio Capital Journal

CINCINNATI — In June of 2019, Ohio Attorney General Dave Yost thought a proposed utility bailout was a bad law, but he didn’t publicly oppose it because of support he’d received from the bailout’s primary beneficiary, FirstEnergy, according to lobbyists’ text messages displayed in court on Friday.

Prosecutors displayed the messages as part of the racketeering trial of former House Speaker Larry Householder and Matt Borges, a former Ohio Republican Party Chairman who was acting as a lobbyist at the time the utility bailout was debated and passed. They are accused in a scheme to use $61 million to make Householder speaker in 2019 so he could pass and protect a $1.3 billion bailout that mostly went to protect FirstEnergy’s failing nuclear and coal plants.

At the time of the men’s July 2020 arrest, federal prosecutors said it was likely the biggest bribery and money laundering scheme in Ohio history. Two months later, as he announced a civil suit against FirstEnergy, Yost echoed those sentiments.

“Corruption doesn’t happen on an industrial scale like this without cash,” he said in a press conference. “And it’s incredibly important at this moment in our state’s history to send a message that the Ohio political system, the Ohio law-making system, the regulatory environment is not for sale. If you shut off the money spigot, the corruption withers.”

But behind the scenes 15 months earlier — according to text messages between Borges and lobbyist Juan Cespedes — Yost was pulling his punches on the bailout. Borges said Yost was doing so partly because of $24,000 he received from FirstEnergy and Borges in the cycle leading up to the 2018 election and the subsequent legislative session during which the bailout was passed. 

Cespedes has pleaded guilty in the scandal and is expected to testify soon in the Householder trial.

After the scandal broke, Yost announced that he would donate his FirstEnergy-related contributions to charity. 

But according to Borges, who had run earlier campaigns for Yost, the FirstEnergy money spigot helped guide the attorney general’s conduct as the bailout was making its way through the legislature. Text messages indicate that Borges was assigned to try to enlist Yost’s help with the bailout.

The legislation, House Bill 6, passed the Ohio House on May 29, 2019, and by the time of the June 26, 2019, text conversation between Borges and Cespedes, opposition to the bailout was growing as it was being debated in the Senate.

One source of opposition was from outside groups that were planning a ballot initiative to repeal HB 6 if it passed. Borges and Cespedes discussed trying to make it exempt from repeal by treating it as a revenue bill and calling it a tax — based on a $1 subsidy built into the measure. 

Cespedes asked Borges what the attorney general thought.

“He’s sympathetic, but he wants to go back and look at the law,” Borges replied.

As they discussed the matter further, Borges said “Don’t repeat this,” but Yost believed the bailout was a bad law.

Yost “‘would be out front (in opposition) if not for (FirstEnergy) support and your involvement,’” Borges quoted Yost as saying.

As attorney general, Yost also would have to approve any repeal language before it went on the ballot. The AG also wanted to help with that if he could, Borges said.

“If there’s any way the law will allow him to reject the language, he will do it,” Borges texted.

Yost has been subpoenaed in the case, and his spokeswoman on Friday declined to comment on the text messages.

“He was subpoenaed to potentially be a witness in this case,” the spokeswoman, Bethany McCorkle, said in an email. “At this time it is inappropriate for him to comment.”