The Columbus Dispatch

A look at hedge fund manager John Kiani

Former lobbyist testifies on Firstenerg­y dealings

- Laura A. Bischoff and Jessie Balmert

Hedge fund manager John Kiani had plans to operate the two Firstenerg­y Solutions nuclear power plants in Ohio for a short period, get a government bailout and then sell the power plants in a deal in which he stood to make $100 million, according to former Firstenerg­y Solutions lobbyist Juan Cespedes.

Kiani is the executive chairman of Energy Harbor, previously called Firstenerg­y Solutions. The company hired Cespedes in 2018 to help get a government bailout passed by state lawmakers.

Cespedes pleaded guilty in October 2020 to racketeeri­ng conspiracy and is testifying against former Ohio House Speaker Larry Householde­r and exohio Republican Party Chairman Matt Borges. Borges and Householde­r have pleaded not guilty.

Cespedes said the quick sale of the plants following the subsidy wouldn’t go over well with state leaders. He acknowledg­ed that he was negotiatin­g with Energy Harbor for a $2 million deal in which he would quarterbac­k lobbying efforts during that sale.

Kiani is an aggressive, hard-charging executive, according to text messages and testimony. Cespedes called him an extremely demanding, very hands-on boss who worked 24/7 and sent messages at all hours.

After Kiani got a hold of Householde­r’s cellphone number, “he overused the number,” Cespedes said.

Kiani spent Firstenerg­y Solutions money to get House Bill 6 passed and fight a referendum that could have unraveled the bill.

Kiani was personally involved in fighting the referendum. Kiani and his team met with Householde­r and the speaker’s team at Plank’s Cafe on Sept. 12, 2019 to discuss the campaign and later that day visited the GOP ad-making shop that created the TV ads, Cespedes said.

Cespedes testified that he kept Kiani out of the loop on a plan to bribe a referendum operative, Tyler Fehrman, for insider informatio­n. Why? Because once Kiani knew, he would pressure him to do so, he said.

Once the referendum was blocked, Kiani was interested in going back to the Ohio General Assembly to ask that the subsidy be extended for an additional four years, Cespedes said.

Cespedes testified that Firstenerg­y Solutions executives were prepared to give $3 million to Householde­r’s effort

to extend term limits in exchange for another four years of subsidies.

“We had a lot of confidence in Speaker Householde­r,” said Cespedes, adding that Kiani was ready to cut a check: “He was more than willing, as he had done before, to spend money in exchange for legislatio­n.”

Who is John Kiani?

Kiani got his finance career start at Enron Corp., the Houston-based utility that collapsed in a massive auditing scandal in 2001.

Kiani, a University of Michigan graduate, co-founded Cove Key Management, a Houston-based energy hedge fund with more than $100 billion under management. The fund accepts money from investors and manages it according to Kiani’s energy strategy, Cespedes told jurors.

Kiani got involved in Firstenerg­y Solutions as an activist investor and was made executive chairman with oversight of the management team, Cespedes said.

Kiani has served as Energy Harbor’s executive chairman since 2019. Energy Harbor, with 2,600 employees, is headquarte­red in Akron.

The company split off from Firstenerg­y Corp. when it emerged from bankruptcy in February 2020. Firstenerg­y fired top executives, signed a deferred prosecutio­n agreement and paid a $230 million fine in the case.

USA TODAY Network Ohio bureau reporters Jessie Balmert and Laura Bischoff have been following the House Bill 6 scandal since the story broke. They will continue to follow developmen­ts and the trial. Follow them on Twitter at @lbischoff and @jbalmert for updates.

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Laura Bischoff is a reporter for the USA TODAY Network Ohio Bureau, which serves the Columbus Dispatch, Cincinnati Enquirer, Akron Beacon Journal and 18 other affiliated news organizati­ons across Ohio.

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 ?? DISPATCH ADAM CAIRNS/COLUMBUS ?? Larry Householde­r talks to reporters after being expelled as a representa­tive in the Ohio House at the Ohio Statehouse in Columbus on June 16, 2021.
DISPATCH ADAM CAIRNS/COLUMBUS Larry Householde­r talks to reporters after being expelled as a representa­tive in the Ohio House at the Ohio Statehouse in Columbus on June 16, 2021.

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