The general counsel for the Republican Party of Kentucky and the Kentucky House Republican Leadership has been linked to the political scandal engulfing the Ohio House of Representatives.
Eric Lycan, a Kentucky lawyer, served as the treasurer for the “Generation Now” 501(c)(4) in 2018. This entity, along with five individuals (but not Lycan) was charged on July 21 with racketeering by U.S. Attorney David M. DeVillers, who described it as “likely the largest bribery, money laundering scheme ever perpetrated against the people of the state of Ohio.” Among those charged and arrested was Larry Householder, the speaker of the Ohio House of Representatives.
The Ohio scandal
The outline of the alleged plot is as follows:
- Five individuals (Larry Householder, Jeffrey Longstreth, Neil Clark, Matthew Borges, and Juan Cespedes), plus Generation Now, constituted an “enterprise” as defined in Title 18 of the U.S. Code. The affidavit accompanying the criminal complaint names this group “Householder’s Enterprise” and says that the “named defendants conspired to conduct and participate in the conduct of the affairs of Householder’s Enterprise through a pattern of racketeering activity.” (pg. 3 of the affidavit)
- From March 2017 to March 2020, Householder’s Enterprise received approximately $60 million from Company A entities. (pg. 4)
- Subsequent research, including matching statements in the affidavit with SEC filings, have shown that Company A is First Energy, a utility headquartered in Akron.
- Company A owned two nuclear power plants in Ohio. The company noted to shareholders that its “nuclear generation future looked grim.” It subsequently sought a “legislative solution” for its nuclear plants to remain solvent. Such legislation failed to pass in 2017. (pg. 4)
- Householder had been speaker of the Ohio House from 2001 to 2004, when he was term-limited out of office. He was re-elected to the Ohio House in 2016. His goal was to be speaker again.
- “Following his January 2017 trip on Company A’s private jet, in March 2017, Householder began receiving quarterly $250,000 payments from Company A into a bank account in the name of a 501(c)(4) entity secretly controlled by Householder called Generation Now.” (pg. 5)
- “In the spring and fall of 2018, the Enterprise spent millions in Company A money to support House candidates involved in primary and general elections whom the Enterprise believed both would vote for Householder as speaker and, ultimately, would follow his lead as Speaker and vote for bailout legislation for Company A.” (pg. 5)
- After Householder was elected speaker, he began to push House Bill 6, which increased electricity rates and used that money as a bailout subsidy for First Energy’s two nuclear plants. The bill passed, and was signed into law by the Ohio governor on July 23, 2019.
- A referendum was planned to repeal HB6, but was defeated after massive negative campaigning by Generation Now.
- “Company A entities paid Householder’s Enterprise $60,886,835.86 in secret payments over the approximately three-year period in exchange for the billion-dollar bailout. The Enterprise concealed the payments by using a 501(c)(4) to receive the bribe money, and then transferring the payments internally to a web of related entities and accounts. The millions paid in the entity are akin to bags of cash — unlike campaign or PAC contributions, there were not regulated, not reported, not subject to public scrutiny — and the Enterprise freely spent the bribe payments to further the Enterprise’s political interests and to enrich themselves.” (pg. 6)
This is just an outline. For more details, see the resources at the end of this article.
The CREW allegations
As a 501(c)4, Generation Now is not required to reveal its donors. It is, however, required to file an annual return with the Internal Revenue Service showing its financial basics. These filings are available on the IRS web site.
On July 24, Citizens for Responsibility and Ethics in Washington (CREW) published an article outlining its many attempts to get Generation Now’s tax return for 2018.
The CREW article states:
Beginning in late 2019, CREW repeatedly sought to obtain Generation Now’s 2018 tax return directly from the organization’s treasurer, a lawyer named Eric Lycan. On multiple occasions, Lycan informed CREW that the tax return, known as a Form 990, would soon be made available. But, more than nine months after it was due, CREW has still not received a copy.
As of August 3, 2020, the 2018 return for Generation Now is still not posted on the IRS site.
Reactions
Speaker Osborne and RPK
Forward Kentucky reached out to Speaker David Osborne of the Kentucky House of Representatives on four occasions (two email, two by phone.) At the same time, we similarly reached out to the Republican Party of Kentucky via email and phone message.
Our written questions for both Osborne and the RPK were the same:
- Were you aware the CREW story was going to be published?
- Do you have any comment on the story?
- My understanding is that Mr. Lycan is general counsel for both the Kentucky House Republican Caucus and the Republican Party of Kentucky. Is that correct?
- If it is correct, do you anticipate any change in his relationship to your organizations?
- Do you have any other comments?
We have received no response from either Speaker Osborne or the RPK.
Eric Lycan
We also reached out to Eric Lycan, twice by email and twice by phone. We sent him these questions:
- Were you aware the CREW story was going to be published?
- Is there anything in the story that you dispute, or that you think is mis-reported or mis-represented?
- Do you have any other comment on the story?
- Are you still the treasurer for Generation Now? If not, when did you leave that position?
- What other non-profits or political organizations have you been treasurer for, and are you still treasurer for them?
- Are you still the general counsel for the Kentucky House Republican Caucus, and for the Kentucky Republican Party?
- Have you been contacted by Ohio authorities in connection to the Householder case?
We have received no response from Lycan.
FBI of Ohio
We contacted the FBI special agent who filed the complaint against Generation Now and the four individuals. In return, we were contacted by the public affairs officer for the Cincinnati office, with whom we had a short conversation.
He told us that he could not comment specifically on Mr. Lycan, as it was an ongoing investigation. We asked him if it was unusual for an entity like a PAC to be charged without charging any of the principals of the organization. He said that again, he could not speak to that particular situation, but he could say it was an ongoing investigation and more charges or indictments could be filed.
Resources
Court complaint and affidavit (PDF)
CREW article – Indicted Ohio speaker’s dark money group dodged IRS reporting for months
Intercept article – Ohio Republicans balked at a nuclear bailout, so the industry elected new Republicans – and walked away with $1.1 billion
Washington Post article – GOP Ohio House speaker arrested in connection to $60 million bribery scheme
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