Stronger Disclosure Laws Can Combat Secret Money Following Ohio Corruption Scandal

The FirstEnergy logo on the outside of a building with dark branches of a tree in the foreground.
A logo sign outside of the headquarters of FirstEnergy in Akron, Ohio on August 10, 2019. Photo by Kristoffer Tripplaar / Alamy Stock Photo.

Voters across the political spectrum consistently rate “corruption in the political system” as one of the top three problems facing our country today. To combat the collapse of transparency in the financing of our elections, local and state legislative bodies need to enact and enforce strong disclosure laws.

Earlier this year, a corruption scheme was brought to light in Ohio and highlighted what a lack of transparency laws can lead to.

A criminal complaint alleging racketeering was filed in the U.S. District Court for the Southern District of Ohio against Speaker of the Ohio House Larry Householder and others who received approximately $60 million in dark money or secret spending from energy company FirstEnergy, paid through a wealthy special interest entity called Generation Now.

It detailed a criminal scheme that amounted to one of the largest public corruption scandals in Ohio’s history.

In the Transparency and Accountability in the Statehouse forum, hosted by The City Club of Cleveland, Kedric Payne, Campaign Legal Center’s (CLC) senior director of ethics, proposed several reforms to help bring more transparency to the process and new laws to regulate grassroots lobbying. 

In states like New York, South Dakota, and Pennsylvania, grassroots lobbying organizations, including those that use complex social media campaigns to influence public officials’ decision-making, are required to register with the state if they spend above a certain dollar threshold on lobbying expenditures. Ohio should consider enacting a similar measure. 

There is a connection between political transparency and self-governance that has been repeatedly acknowledged by the U. S. Supreme Court, therefore lobbyists should also be required to disclose their campaign contributions, independent expenditures, and any groups they donate to that are affiliated with public officials.

This type of disclosure is required for federal lobbyists, exists in several states, and should be implemented in Ohio.

Shedding light through transparency reforms in places like Ohio would prevent dark money groups like Generation Now from operating in the shadows to influence policies that affect all Americans.

Generation Now was a 501(c)(4), or “dark money,” organization, whose political and election-related spending, was meant to influence the political process in Ohio. Their donors and sources of money were not known to the public.

In exchange for the money, Householder’s criminal enterprise worked to pass and implement House Bill 6, a bailout that would save two nuclear power plants affiliated with FirstEnergy from closing. Generation Now, a key player in the scheme, was organized by a Householder affiliate but controlled by Householder himself.

It used the money funneled to it by FirstEnergy to help get candidates elected to the Ohio House who would make Householder the Speaker. Generation Now paid for advertisements, including mailers and media ads, to pressure members of the House to support House Bill 6.

Because of its organization and activities, Generation Now was able to evade the disclosure laws required of other types of lobbying organizations and political groups.

Thus, the public was left in the dark about: the amount of money it spent on its ad campaign to defeat House Bill 6, the amount it spent on political contributions to get Householder-friendly representatives elected, and its expenses that benefitted elected officials, its donors, and its affiliates who helped its illegal pressure campaign come to life.

By implementing commonsense lobbying reforms, Ohio can close some of these gaps in disclosure law. Nationwide, 83% of voters across partisan and demographic lines support publicly disclosing political contributions to all organizations.

Real transparency about who is spending money on elections will mean more government accountability, less influence for wealthy special interests and less political corruption.

Delaney is the Director, Ethics at CLC.
Tracy handles media relations for the CLC campaign finance and ethics teams and creates online content.
Passing Transparency Reform in Ohio