Legislative director had ties to group
Ohio Gov. Mike Dewine’s legislative director was previously president of a “dark money” group accused of funneling money from Firstenergy Corp. to Speaker Larry Householder’s efforts to gain control of the Ohio House, according to an Enquirer investigation.
Dan Mccarthy, who now leads Dewine’s legislative efforts, was previously a lobbyist for Akron-based Firstenergy Corp., which had been asking lawmakers for a financial boost to save its nuclear plants in northern Ohio since 2016.
Between 2017 and late 2018, Mccarthy was also president of Partners for Progress Inc., a 501(c)(4) nonprofit that engaged in “advocacy in support of nuclear power and the power generation in general,” according to the nonprofit’s tax forms. Such groups are called dark money groups because they don't have to disclose their donors.
An 81-page federal complaint released Tuesday in connection with the arrests of Householder and four others details allegations of how Firstenergy Corp., listed as “Company A,” used an “Energy Pass-through” to funnel millions to Householder’s dark money group Generation Now.
Generation Now then supported Householder-aligned House candidates, the passage of a bill providing $1 billion for Firstenergy's nuclear plants and efforts to block a referendum to overturn the bill.
Partners for Progress Inc. was formed in Ohio on Feb. 8, 2017 – the same date listed for “Energy Pass-through” in the federal complaint. Payments from the Energy Pass-through to Generation Now alleged in the complaint match sums that Partners for Progress paid to Generation Now on the nonprofit’s 2018 tax form.
Mccarthy, in a statement Thursday morning, said he served as president of the board of Partners for Progress but resigned in late 2018 to serve as Dewine's legislative director. He was not aware of "anything illegal or unethical regarding the operations of Partners for Progress, and all transactions were to the best of my knowledge above board and approved by the 501(c)(4)’s treasurer, who is also an attorney and was counsel for the organization."
Dewine said at a Thursday news conference that Mccarthy has done a good job for Ohioans since he took office and noted that federal authorities have not contacted Mccarthy or anyone in the administration.
"We have a great deal of confidence in him, and we have no indication at all (that) he did anything wrong at all,“Dewine said.
Here's how the federal investigation says the money was moved: Firstenergy Corp. wired $5 million into the account of Partners for Progress Inc. on Feb. 16, 2017.
According to the complaint, the Energy Pass-through paid $900,000 to Generation Now and $300,000 to the “coalition” in 2018. According to Partners
for Progress’ 2018 tax form, the organization paid $900,000 to Generation Now Inc. and $300,000 to the Coalition for Growth and Opportunity.
The Coalition for Growth and Opportunity was formed in the state of Delaware one day after the Growth and Opportunity PAC, consistent with descriptions in the complaint. Both the coalition and the PAC spent money to support Householder’s chosen candidates. That team of candidates helped Householder win his position as leader of the Ohio House of Representatives in early 2019.
In 2019, Mccarthy worked with lawmakers as they reviewed and ultimately passed House Bill 6, which approved a $1 billion bailout for two nuclear plants in northern Ohio owned at the time by Firstenergy Solutions. Dewine signed the bill in July 2019.
Mccarthy, in the statement, said he was "shocked to learn of the allegations against Larry Householder and his co-defendants."
"While it is well known that First Energy was a previous client of mine, it is also well known that I advocated for Ryan Smith for speaker of the House, and during my tenure as a lobbyist, I had a well-known adversarial relationship with Neil Clark. Any insinuation I was involved in this disgusting scheme is without merit."
Clark, a lobbyist, was among those charged Tuesday.
Dave Devillers, U.S. attorney for the Southern District of Ohio, said Tuesday that there is no evidence that the conspiracy touched Dewine’s office. On Wednesday, Dewine said he had no contact with FBI investigators. Mccarthy also said he had not been contacted by the FBI.
“To my knowledge, no one in our administration has had any contact with anybody in the investigation,” Dewine said. “We were surprised as everyone was yesterday morning.”
After Mccarthy's departure from Partners for Progress, Firstenergy continued to wire money to the dark money group, according to the complaint.
In October 2019 – while opponents of House Bill 6 tried to mount a referendum campaign – Firstenergy wired $20 million to Partners for Progress. Between October 2019 and March 2020, Partners for Progress then wired $15 million to Generation Now and wrote a $4,330.86 cashier’s check to the dark money group.
Partners for Progress wired $3 million to Generation Now on Oct. 22 -the day the ballot initiative failed and House Bill 6 officially became law. jbalmert@gannett.com @jbalmert