This post is part two of a two-part blog series. Part one reveals FirstEnergy’s secret role in funding Consumers Against Deceptive Fees, based on subpoenaed bank records. Part two looks at how the group used FirstEnergy’s money to pay a network of lawyers and lobbyists who campaigned against Cleveland Public Power.
A dark money group that was secretly funded by FirstEnergy paid $245,000 to the firm where convicted Ohio lobbyist Matthew Borges once worked to campaign against Cleveland Public Power (CPP), which competes with FirstEnergy for customers, between 2018 and 2020.
The fact that more than $550,000 of Consumers Against Deceptive Fees’ just over $560,000 in total funding came from FirstEnergy remained secret until today, when the Energy and Policy Institute (EPI) published copies of the group’s bank records that the Cleveland City Council obtained through subpoenas as part of its investigation into the front group. EPI obtained the records through an Open Records Law request.
Records from the City Council’s investigation of CADF are now available for the public to view for the first time on DocumentCloud. Included in the DocumentCloud collection are copies of emails between members of the City Council and CADF’s paid consultants, also obtained through a public records request.
The emails include copies of draft legislation that CADF distributed to some City Council members which included “poison pills” that threatened CPP’s revenue at a time when the public utility’s financial situation was already tenuous, the City Council’s investigation determined.
The City Council’s internal analysis of the bank records shows CADF used the money from FirstEnergy to pay Roetzel Consulting Solutions, where Borges was a principal until January 2020, and its parent company Roetzel & Andress $245,000 between 2018 and 2020.
Borges and Householder were convicted earlier this year and will be sentenced this week.
The Cleveland investigation was led by the City Council’s then president Kevin Kelley, who suspected CADF was also secretly funded by FirstEnergy. The investigation ended after Kelley ran for mayor in 2021 and lost to Cleveland’s current Mayor Justin Bibb. The records from the investigation then sat in the city’s files, unseen by the public until now.
CADF registered with the IRS as a tax-exempt 501(c)(4) organization; it was not legally required to disclose its donors publicly. Some of the individuals who worked with CADF claimed to have been in the dark about the group’s funding when contacted by the Energy and Policy Institute.
Some who were involved in the CADF say that they still view their work as having benefited low-income and minority ratepayers who were most impacted by CPP’s bill hikes.
CADF was not one of the entities prosecutors say was used to conceal FirstEnergy funding of the racketeering conspiracy in which Householder and Borges participated. The group has not been charged with any crime.
Some of the other individuals and firms paid by CADF also provided support for FirstEnergy’s multi-year push to secure ratepayer-funded bailouts for the utility company’s struggling nuclear and coal plants in Ohio, which culminated in the passage of H.B. 6 in 2019.
Close to forty-five percent of the money Consumers Against Deceptive Fees got from FirstEnergy went to Roetzel & Andress and its lobbying arm
CADF paid $158,000 to the law firm Roetzel & Andress and $87,000 to the firm’s lobbying arm, Roetzel Consulting Solutions (RCS), in 2019-2020, based on the City Council’s annual tallies of CADF’s expenditures. All told, CADF paid Roetzel $245,000, or close to forty-five percent of the $551,393 the group received from FirstEnergy.
Besides Borges, no one else who worked for Roetzel has been charged in the federal criminal investigation, nor has the firm been charged. Roetzel was mentioned multiple times in exhibits and testimony during the racketeering trial.
At the trial, Borges’ defense attorney Todd Long described Roetzel as “traditionally a Democratic-leaning law firm, but its single biggest client is FirstEnergy.”
“Lewis called with a heads up,” Alex “Scooter” Thomas, another lobbyist at RCS, texted Borges on May 10, 2018. “There is a fundraiser for [Y]ost tonight in Akron. First[E]nergy will be there. Lewis believes it is unlikely that they will mention the c4/CPP issue tonight, but they will probably request a meeting at a later date, in which the issue could come up.”
“Ok,” Borges responded that same day. “Dave has a heads up.”
FirstEnergy’s first company check to CADF was dated on May 10, 2018, the same day as the texts between Borges and Thomas. The check was for $100,000.
At the time, Dave Yost was Ohio’s state auditor and in the midst of his successful campaign to become Ohio’s Attorney General. Yost later thanked Borges for his role in the campaign during his inaugural address in 2019, and described Borges as “the wise man of Ohio politics…”
“A text from 2018 between two people that references the AG I can’t comment on,” Yost’s communications director Bethany McCorkle said via email when asked about the texts between Borges and Thomas. “What I can tell you is that AG Yost continues to fight for Ohioans and their checkbooks.”
In a 2019 text sent to Juan Cespedes, a lobbyist who pleaded guilty in the racketeering case, Borges said Yost would have publicly opposed H.B. 6 if not for the “support” he’d received from FirstEnergy.
After the Ohio House passed H.B. 6 in May of 2019, Adkins sent a text to Borges, Thomas and Madison Whalen, a Roetzel & Andress attorney, to celebrate the initial win. Also included in the text was RCS Vice President Diana Fietle.
Adkins did not respond to an email seeking comment about the role he played in CADF, FirstEnergy’s funding of the group, and the texts from 2019.
Jennifer Varhola, a client services manager for RCS, was named as CADF’s principal officer on all the group’s annual Form 990 reports to the IRS. She was also listed as CADF’s vice president and treasurer in 2019 and 2020.
Varhola was added as a signatory on CADF’s bank account in September 2019, and her signature appeared on the group’s outgoing checks after that.
On October 21, 2020, just a few days before CADF’s dissolution, Varhola signed four checks from CADF for $1,000 each for board member compensation made out to herself and fellow CADF officers Thomas A. Tatum, John W. Yelsik, and Jason D. Stefan.
Galen Schuerlein, a director at RCS, was listed as the “author” in the document properties of draft legislation that representatives of CADF emailed to members of the Cleveland City Council in 2019.
In December of 2019, City Council member Michael Polensek forwarded Schuerlein an email from an executive assistant for the City Council that warned City Council members and staff about a mailing CADF had sent out to all CPP customers. A copy of the mailing was included in the forwarded email.
A few days earlier, CADF wrote a check for $9,184.37, signed by Varhola, to Qwestcom Graphics, Inc. for postage and mailing.
The CADF mailer called for the city to ensure CPP’s customers paid the same then-lower rates as CEI’s customers, something FirstEnergy did not do when CEI’s rates were higher than CPP’s.
Schuerlein also “peddled stories to reporters about Consumers Against Deceptive Fees’ work and questioned why the city failed to address CPP’s high rates, especially in poor neighborhoods,” as Cleveland.com previously reported.
“While at my prior firm, I helped advise CADF on community outreach and communications. I was not responsible for funding,” Galen Schuerlein, who was a director at RCS from 2016 to 2022 and now works for a different firm, told the Energy and Policy Institute via email.
“All of us thought this was an independent organization,” Polensek, who has represented the ward with the most CPP customers for forty-five years, said of CADF during a phone interview.
Polensek said the CADF made some “legitimate points” about CPP’s mismanagement under the administration of former Mayor Frank Jackson. He said earlier bad decision-making, like a costly long-term contract to procure power from Prairie State coal plant in Illinois, had driven up CPP’s rates.
But he described FirstEnergy and its subsidiary CEI, which has been at war with CPP for decades, as “the evil empire” and a “corrupt corporation” and said that for decades FirstEnergy had resented, and feared, the significantly lower rates once offered by CPP.
“It didn’t work obviously,” Polensek said of FirstEnergy’s backing of CADF.
He pointed out that CPP is still in business and some progress has been made on addressing the public utility’s problems, though he said that much work remained.
He hailed the recent removal of FirstEnergy’s name from Cleveland Browns Stadium, and said the company’s lobbying and campaign contributions had posed a serious threat to CPP for as long as he’s been in office.
An “unholy alliance”
During the racketeering trial, FBI agent Blane Wetzel testified about a secretly recorded conversation between Borges and FBI informant Tyler Ferhman, in which Borges described an “unholy alliance” between Householder, FirstEnergy, and Roetzel. An excerpt from an FBI transcript of that recorded conversation can be found below:
RCS also denied knowledge of Borges’ formation of a new firm called 17 Consulting Group in August 2019, and claimed that Borges “actively concealed the existence of his personal company and its relationship with Generation Now from RCS leadership.”
Trial exhibits and public records show that Roetzel & Andress got at least a portion of the FirstEnergy money that flowed through Generation Now, after it passed through Borges’ private consulting firm and a ballot issue PAC.
Protect Ohio Clean Energy Jobs then paid $45,000 to Roetzel & Andress for consulting, according to a campaign finance report. The ballot issue PAC was located on the same floor as Roetzel’s South High St. office in Columbus, and was part of a multi-million dollar effort, secretly funded by FirstEnergy, that successfully blocked a referendum petition aimed at giving voters a shot at repealing H.B. 6 from reaching the ballot.
The political consulting firm helmed by Consumers Against Deceptive Fees’ first president Kenn Dowell received $158,500 of the money the group received from FirstEnergy
CADF’s Form 990 for 2018 listed $118,000 in officer compensation for Dowell, which represented close to half the money FirstEnergy paid to CADF that year. The group’s Form 990 for 2019 did not list Dowell as an officer, but the bank records show his consulting firm was paid $40,500 that year by CADF, based on the City Council’s analysis.
“I didn’t know anything about FirstEnergy money or anything like that,” Dowell later told Cleveland.com during an interview about CADF in 2021. “Our job was to go in and talk about money that minority customers were being charged.”
The Energy and Policy Institute asked Dowell to elaborate on his earlier comments about CADF, based on the new information about FirstEnergy’s central role in funding CADF found in the bank records subpoenaed by the City Council.
Dowell, who is Black, responded in an email in which he said:
… I have no comment about Consumers Against Deceptive Fees other then we informed the public mainly eastside Cleveland residents who mostly are black, poor and disenfranchised about fees that the CPP was charging us as consumers without having an[y] explanations of the changes. I didn[’]t do the fundraising.
Strategic Resources Consulting’s website listed Roetzel as a client at the end of 2018, but not CADF or FirstEnergy.
In March of 2019, Dowell sent an email to City Council member Basheer Jones’ gmail address with CADF materials attached. A document titled “Undisputed Facts about Cleveland Public Power” was attached to Dowell’s email. The name “Roetzel” was listed under “Company” in the document properties for the attachment.
Jones then forwarded the email using his official City Council email to his executive assistant to print out. Jones later ran for mayor, but lost, and left the City Council in January of 2022. A few months later, the City of Cleveland received a subpoena from the FBI seeking information about payments the city made to individuals and entities connected to Jones. The FBI’s investigation into Jones doesn’t appear to involve FirstEnergy or CADF, based on public reporting about that investigation.
In December of 2018, Allosious Snodgrass of Strategic Resources Consulting emailed copies of CADF’s “poison pill” draft CPP legislation to City Council members Kevin Bishop and Jasmin Santana. Dowell was included in the email to Bishop.
“No we did not,” Dowell said when asked if he did any work on H.B. 6 for Roetzel or FirstEnergy in 2019.
Neither Dowell nor his firm are named in any of the exhibits and transcripts made public in the Householder and Borges case, and neither has been charged with any crime.
CADF paid another lobbying firm, the Remington Road Group, $30,000 to meet with Cleveland City Council members and push the “poison pill” Cleveland Public Power legislation
Emails show Jennifer Lynch, one of the lobbying firm’s principals, worked to arrange meetings on behalf of CADF with multiple Cleveland City Council members who have served on the City Council’s Utilities Committee, including Bishop, Brian Kazy, Polensek, Santana, and Dona Brady.
Lynch previously worked as a director of government relations at Roetzel & Andress. She also once worked as a policy advisor for former Ohio Governor Ted Strickland and legislative director for former Ohio Congressman Tim Ryan, both Democrats.
“Did you share the draft legislation with either Marty Keane or Kevin Kelley?” Kazy asked Lynch in a follow up email. “Just wondering the proper way to proceed.”
“The draft language has been shared with you, Councilman Hairston and I believe Councilwoman Santana,” Lynch responded to Kazy. “We have had numerous meetings sharing the concerns of CPP customers though.”
“I think the best path forward would be to introduce the legislation and begin the process,” Lynch said in the same email. “I can help draft talking points and supporting materials. We have a number of people ready to talk about their experiences and share their bills.”
“We worked for a short period of time with Consumers Against Deceptive Fees to highlight the disparities, lack of transparency and extraordinarily high rates by CPP — issues that were impacting small businesses and residents,” the Remington Road Group said in a statement to Cleveland.com in 2021. “However, when asked to continue the work with this group, we chose not to.”
Lynch did not respond to an email seeking further comment.
“Are you still working on HB 6?” Lynch texted Borges in April of 2019.
“Yes,” Borges responded. “I hate this issue. But yes.”
Borges sent Lynch a link to a column about House Bill 6 with the headline “FirstEnergy’s supposed ‘green new deal’ to bail out nuclear plants is really just a political deal” by Thomas Suddes.
“Not wrong.” Borges then texted Lynch.
Emails obtained earlier by the Energy and Policy Institute from the Perry Local Schools district also show that Ben Frech, who was a political consultant for the Remington Road Group from 2016-2019, worked with the Ohio Clean Energy Jobs Alliance, a pro-nuclear power plant bailout coalition that supported H.B. 6 and was run by FirstEnergy Solutions lobbyists.
Perry Local Schools supported multiple pieces of state legislation aimed at bailing out the Perry nuclear plant that was owned by FirstEnergy, because the district relied on tax revenue from the plant. Borges’ attorney said during the racketeering trial that Borges lobbied for the school district in 2017 legislation that would have subsidized the plant.
The Remington Road Group has not been charged with any crime, nor have any of its current and former principals and staff.
Consumers Against Deceptive Fees paid a civil rights law firm thousands of dollars to fight the Cleveland City Council’s investigation
The firm describes itself as “High-stakes civil-rights advocates serving people throughout Ohio and across the nation.”
It also provides white-collar criminal defense for crimes including public corruption.
Subodh Chandra, a managing partner at the law firm who was once the top attorney for the City of Cleveland, called for an end to the Cleveland City Council’s investigation of CADF in a letter sent to city officials in August of 2020.
That same month, Chandra filed a public records complaint against the City of Cleveland’s Law Director on behalf of CADF with the Ohio Supreme Court. CADF sought to obtain a copy of a CPP rate study by a consulting firm, NewGen Strategies and Solutions, hired by the city. A little over a week later, Chandra asked for the case to be dismissed, because “the document sought appears to be in the public domain.”
3News obtained and later published an unredacted copy of a NewGen Strategies and Solutions briefing that said CPP was “mired in systematic, performance, and financial issues” and recommended increases to CPP’s rates.
Chandra responded to a request for comment from the Energy and Policy Institute with the following statement:
Our firm was unaware of any funding sources for Consumers Against Deceptive Fees. The pro-consumer arguments expressed on the entity’s behalf about problems with Cleveland Public Power’s treatment of its customers, and Council and the mayoral administration’s failure to disclose an internal study that revealed such issues, were well founded in law, reason, and evidence. We saw a copy of the rate study that was being withheld and it contained devastating evidence of city-leadership malfeasance. And, to the best of my knowledge and recollection, those substantive concerns, including transparency went unaddressed by Cleveland City Council and the mayoral administration.
He said that it’s “True” that FirstEnergy also deserves scrutiny over its treatment of Ohio ratepayers.
“When the council president started making what appeared to be manufactured conspiracy allegations of connections to FirstEnergy, I made inquiries with the organization’s representatives and was repeatedly assured there were no connections,” Chandra said about CADF during a phone interview with EPI.
“Had we known of any connection to or funding by First Energy, the answer of my firm to the representation would have been a firm, ‘no.'” Chandra said in an email after this blog was first published.
Neither Chandra nor his law firm has been named or charged in the federal criminal investigation.
Clergy previously convicted of bribery worked as paid consulting for Consumers Against Deceptive Fees
CADF paid a total of $6,000 to Pastor Dr. Aaron L. Phillips and Reverend Jimmy Gates, which included two checks for $1,500 to Phillips and Gates dated June 12, 2018. Phillips and Gates each received additional checks for $1,500 for “June consulting” dated September 18, 2018.
Gates is a convicted felon who worked for the Cleveland Water Department before pleading guilty to splitting bribes with another city employee in 2007.
Phillips worked as an assistant prosecutor for Cuyahoga County until 2003, when he was convicted of bribery and served six months in prison.
Gates did not respond to a request for comment about the money he received from CADF the following year.
Phillips is now the executive director of the Cleveland Clergy Coalition, which says that it represents “most of the African-American Clergy organizations in the Greater Cleveland area.” Phillips also has a political consulting firm called Engagement Consulting Services Inc., which he incorporated in Ohio in mid-April 2018.
In 2015, Phillips joined a group of clergy who rallied outside FirstEnergy’s annual shareholder meeting to oppose the utility company’s proposal to force Ohio ratepayers to bail out its nuclear and coal plants through an Electric Security Plan filed with the Public Utilities Commission of Ohio.
In 2017, Phillips provided testimony in support of an earlier incarnation of the ZEN bill on behalf of the Cleveland Clergy Coalition. “Walton, Stephanie” was listed as the “author” in the document properties of Phillips’ testimony before the Public Utilities Committees of the Ohio House and Senate. Walton was a spokesperson for FirstEnergy at the time.
Neither Phillips nor Jones have been mentioned by name or charged in the federal criminal investigation involving H.B. 6.
“CPP is expanding into Brooklyn and guaranteeing lower electrical rates to their customers,” said one CADF mailing from late 2018 covered by Cleveland.com.
At the time, FirstEnergy had filed a lawsuit to try to stop CPP from reselling a portion of the power the public utility purchased from a solar farm to customers in Brooklyn for a lower price than FirstEnergy could charge there.
Fallon Research, a polling firm located in Columbus, was paid $22,500 by CADF in 2018.
This post is part one of a two-part blog series. Part one reveals FirstEnergy’s secret role in funding Consumers Against Deceptive Fees, based on subpoenaed bank records. Part two looks at how the group used FirstEnergy’s money to pay a network of lawyers and lobbyists who campaigned against Cleveland Public Power.
FirstEnergy secretly paid over $550,000 to fund a front group called “Consumers Against Deceptive Fees” and its campaign against Cleveland Public Power, according to previously unreported bank recordssubpoenaed by the Cleveland City Council.
In mailings sent to Cleveland residents in 2019, Consumers Against Deceptive Fees (CADF) purported to be a statewide Ohio organization that “works tirelessly to make sure utility bills are consistent, reasonable and fair to utility customers.” Behind the scenes, CADF received all but less than $10,000 of its funding from FirstEnergy, an investor-owned utility that was later caught paying bribes for legislation that secured ratepayer-funded bailouts for the company in a criminal scheme that played out between 2017 and 2020.
FirstEnergy owns the Cleveland Electric Illuminating Company (CEI), which competes for customers with Cleveland Public Power (CPP), a publicly owned not-for-profit utility. CPP customers traditionally benefited from lower electricity bills than those paid by CEI customers, but in recent years that advantage disappeared as CPP’s bills rose.
CADF, which was formed in 2018 and dissolved in 2020, registered with the IRS as a tax-exempt 501(c)(4) social welfare organization. The group was not legally required to publicly disclose its donors.
The Energy and Policy Institute filed a public records request and obtained copies of CADF’s subpoenaedbank records and other documents from the City Council’s investigation. Records from the City Council’s CADF investigation are now available for the public to view for the first time on DocumentCloud. Included in the DocumentCloud collection are copies of emails between members of the City Council and CADF’s political consultants, also obtained through a public records request.
The emails include copies of draft legislation that CADF distributed to some City Council members which included “poison pills” that threatened CPP’s revenue at a time when the public utility’s financial situation was already tenuous, the City Council’s investigation determined.
In early 2021, Cleveland’s Mayor Frank Jackson said the city was considering a lawsuit against FirstEnergy over the utility company’s attacks on CPP. The lawsuit never materialized and Jackson soon announced he would not seek re-election. The Cleveland investigation fizzled out after City Council President Kevin Kelley, who led the probe, ran for mayor that year and lost.
The subpoenaed records from CADF have sat in the city’s files since then, unseen by the public until now.
A spokesperson for FirstEnergy did not respond to a request for comment on the company’s funding of CADF, and whether FirstEnergy’s utilities charged ratepayers for any payments to the group and its consultants.
FirstEnergy was the secret source of all the revenue that Consumers Against Deceptive Fees reported to the IRS
FirstEnergy paid a total of $551,931 to CADF in 2018 and 2019, according to bank records the City Council obtained via subpoena.
Partners for Progress disclosed its $200,000 payment to CADF on its own IRS Form 990 for 2019, as Cincinnati.com first reported in 2020. The over $350,000 FirstEnergy paid to CADF through corporate checks in 2018 remained secret until now.
FirstEnergy also admitted that it used Partners for Progress to help conceal approximately $15 million in payments to Householder’s 501(c)(4) Generation Now, which itself pleaded guilty to racketeering in 2021. FirstEnergy agreed to pay a $230 million legal penalty and cooperate with the federal investigation to avoid prosecution on a federal criminal charge.
The City Council obtained records related to the $200,000 payment to CADF from Partners for Progress’ bank, PNC Bank. The PNC Bank records show that Michael VanBuren, Partners for Progress’ treasurer and an attorney at the law firm Calfee Halter & Griswold, withdrew $200,000 from the PNC Bank on July 19, 2019. The Partners for Progress cashier’s check to CADF was dated on the same day and signed by a bank official, so VanBuren’s name did not appear on the payment deposited by CADF.
FirstEnergy lobbyists Michael Dowling and Joel Bailey received emails from VanBuren with “legal advice” about a “potential” Partners for Progress donation to CADF a few days before the cashier’s check was written, according to a privilege log Partners for Progress filed earlier this year in a class action shareholders lawsuit against FirstEnergy.
Dowling and Bailey were later terminated by FirstEnergy amidst the fallout from the federal criminal investigation. Both lobbyists were named in an exhibit listing “people involved in the investigation” that prosecutors displayed at Householder’s trial during testimony by the lead FBI agent on the case. Dowling and Bailey have not been charged, but lawyers for Dowling say their client faces a potential indictment.
VanBuren and an attorney for Dowling did not respond to requests for comment; EPI could not reach Bailey.
The only other money raised by Consumers Against Deceptive Fees was used to pay the political consultant who filed the group’s articles of incorporation
CADF reported $351,931 in total revenue to the IRS in 2018, but the group’s actual revenue was over $360,000 when those two smaller checks are added to the $351,931 it received from FirstEnergy that year.
Vandercar Holdings, also known as Life Notes, LLC, is incorporated in Kentucky, and its principal office is located in Cincinnati. The LLC’s articles of incorporation listed Joseph Robert Smyjunas, a Cincinnati-area developer, as its organizer. Mary Ruth Smyjunas is currently listed as the company’s manager. The signature of “M. Smyjunas” appeared on Vandercar Holdings’ check to CADF.
Roetzel was also paid by FirstEnergy to help secure the ratepayer-funded nuclear plant bailout included in H.B. 6. Roetzel lobbyist Matthew Borges, a former chairman of the Ohio Republican Party, was convicted alongside Householder for his role in the H.B. 6 scheme, as detailed in part two of this blog series.
