More Generation Now dark money traced to AEP in Ohio corruption scandal

A Columbus group funded solely by AEP paid just over a half-million dollars last year to Generation Now, the group indicted this summer on federal racketeering charges alongside former Ohio House Speaker Larry Householder.  

The AEP-backed group Empowering Ohio’s Economy contributed $550,000 to Generation Now for “Advocacy” in 2019, according to an annual IRS Form 990 report obtained by the Energy and Policy Institute. 

The Energy and Policy Institute and Columbus Dispatch previously reported that Empowering Ohio’s Economy paid a total of $150,000 to Generation Now from 2017 to 2018. A total of $700,000 in Generation Now money can now be traced back to Empowering Ohio’s Economy, and from there to AEP. 

The total amount could have been higher, if not for an uncashed check. Empowering Ohio’s Economy amended its Form 990 with the following explanation:

The original tax return included a check issued to the organization Generation Now in the amount of $250,000 that was not, nor will be, cashed. This amended tax return reduces the amount reported… for this organization by the $250,000 – resulting in the correct amount paid to this organization being $550,000.

The Dayton Daily News was the first to break the news of money that traded hands last year between the two groups.

In 2017, Empowering Ohio’s Economy also paid $200,000 to the Coalition for Growth & Opportunity, another group linked to the Householder investigation.  

The federal investigation has so far focused on allegations that Householder, along with several political operatives also charged in the case, used Generation Now to secretly receive $60 million from an unnamed energy company that is widely understood to be FirstEnergy. That money was used to secure Householder the position of speaker and pass and defend a billion-dollar bailout for two nuclear power plants owned by a FirstEnergy subsidiary, which later emerged from bankruptcy as a new company called Energy Harbor. No energy company has been charged in the case, but FirstEnergy and, reportedly Energy Harbor, have been subpoenaed. 

Lobbyist Juan Cespedes and political consultant Jeffrey Longstreth plead guilty in the case in October.

“… Longstreth admits to organizing Generation Now for Householder, knowing the entity would be used to receive bribe money to further Householder’s bid for Speaker of the House,” a press release from the U.S. Attorneys Office for the Southern District of Ohio said. 

AEP benefits from House Bill 6’s coal plant bailout

The vehicle for the bailout was House Bill 6, which also benefited AEP by providing millions of dollars in new coal subsidies to the Ohio Valley Electric Corporation (OVEC) power plants that AEP is the largest equity shareholder of. AEP’s PAC and top company executives contributed tens of thousands of dollars to campaign fundraising events held by Householder last year. 

“If we do hear something from [investigators], which we might [based on] conversations we’ve had, we obviously feel pretty confident in our position, and we’ll be responsive if and when that occurs,” AEP’s CEO Nicholas Akins said during a recent interview with S&P Global. 

AEP previously said it has not been contacted by federal investigators. 

AEP: Empowering Ohio’s Economy’s only funder 

Empowering Ohio’s Economy received $700,000 last year from a single contributor and has raised a total of $8.7 million over the last five years, according to information found in the group’s annual reports to the IRS. The organization previously raised $3 million in 2015 and $5 million in 2016.

Akins previously admitted that AEP contributed $8.7 million to Empowering Ohio’s Economy since 2015, the same amount the group has raised during that time. 

The board of directors for Empower Ohio’s Economy includes Tom Froehle, the vice president of external affairs for AEP who lobbied in support of HB 6. It also includes James B. Hadden, an attorney who has represented AEP. 

Empowering Ohio’s Economy received documents showing how grantees like Generation Now used their money

“Empowering Ohio’s Economy, Inc. received documentation from the organizations that received grants during the year which ensures the funds are not otherwise diverted from their intended use,” according to the group’s Form 990. 

As an organization that received multiple grants from Empowering Ohio’s Economy, Generation Now would have been required to provide documentation of how it used the money it received in 2017, 2018 and 2019. 

In an 80+ page affidavit filed in the federal racketeering case, a special agent for the FBI detailed Generation Now’s role during that same timeframe in bankrolling Householder’s rise to speaker, securing passage of HB 6, and defending the controversial bailout from a petition campaign that threatened to give Ohio voters a chance to overturn the new law in 2020. 

AEP: It’s not a corporate political contribution

A policy adopted by AEP in 2017 defines a corporate political contribution as “corporate contributions that are given from the general funds of the corporation (as opposed to money from a company-sponsored Political Action Committee or PAC).”

“AEP cannot lawfully make Corporate Political Contributions to candidates for elected office in Arkansas, Kentucky, Michigan, Ohio, Oklahoma, Tennessee, Texas and West Virginia,” the company’s official policy states,” according to the official company policy.

Authority over corporate political contributions lies with AEP’s CEO, president, vice presidents of utilities and external affairs, and the heads of the utility’s operating companies. 

“The contributions to EOE were not Corporate Political Contributions under the definitions of the policy… and were approved through our internal processes,” a spokesperson for AEP said via email.

Contributions to organizations that qualify as 501(c)(4)s are not covered by AEP’s policy on corporate political contributions, so long as the “contributions will not be used for political purposes.”

Empowering Ohio’s Economy and Generation Now are both 501(c)(4) organizations. 

In 2018, Empowering Ohio’s Economy’s largest grant, of $525,000, went to State Solutions Inc., an affiliate of the Republican Governors Association. 

Empowering Ohio’s Economy also contributed $100,000 in 2019 to the Rule of Law Defense Fund, a 501(c)(4) group that has worked with Republican state attorneys general to fight EPA rules.

Another $50,000 went last year to Liberty Ohio, the 501(c)(4) group behind a website and ads targeted at this year’s Republican primary race for Ohio’s 4th state senate district. As first reported by the Cincinnati Enquirer, Liberty Ohio attacked primary candidate Candice Keller, who as a member of the Ohio House in 2019 voted against HB 6. Keller lost her state senate primary to state Rep. George Lang, who voted for HB 6 and received campaign money from AEP’s PAC. 

A new 501(c)(4) with $2,000,000 in funding that originated from AEP

In 2019, Empowering Ohio’s Economy gave $2,000,000 to Open Road Path, a Delaware-based group with virtually no public profile.

Reached via email, Hadden described Open Road Path’s mission as “Promoting economic development and prosperity in Ohio.” 

The mission statement for Empowering Ohio’s Economy similarly includes “to promote economic and business development within Ohio…” 

Hadden also explained that Empowering Ohio’s Economy had begun winding down operations about a year ago, and the $2,000,000 was being moved over to a new group, Open Road Path. 

Open Road Path is listed on Empowering Ohio’s Economy’s Form 990 as a tax-exempt 501(c)(3), but Hadden said Open Road Path is actually another 501(c)(4) and that the Form 990 “misstated” the group’s IRS designation.  

A group called Open Road Path, Inc. was incorporated in Delaware in August of 2019. 

“You will have to contact EOE to ask about the contribution to Open Road Path as they made that contribution,” AEP’s spokesperson said in response to an email asking for more information about the new group.

Click here for copies of Empowering Ohio’s Economy’s Form 990s for 2014, 2015, 2016, 2017, 2018, and 2019

Top image attributed to Jericho from Wikipedia Commons. Creative CommonsAttribution 3.0 Unported license.