Scandalling Up in Ohio

The Long, Tainted Ascent of JD Vance's Likely Replacement--and What It Says About Ohio

Among its many qualities, who knew that the city of Miami was an overwhelming leader in the occurrence of Medicare fraud?

Not me, until I read Malcom Gladwell’s latest book (“Revenge of the Tipping Point”).

But it turns out, South Florida is an absolute outlier when it comes to runaway Medicare fraud.

And, Gladwell explains, that is due to a phenomenon he calls a place’s “overstory” — an element to a place that takes hold, shapes behavior, and continues on, unique from other places. It may start for a particular set of reasons, but then takes on a life of its own, becoming a self-reinforcing characteristic and culture.

In Miami’s case, a combination of factors weakened the institutions of a once sleepy Southern town to the point where truly bold Medicare fraud practices (Gladwell describes phony offices and outrageous, “exotic” billing schemes in great detail) were not policed. And once they weren’t policed, they became the norm. And once the norm, they became the way to succeed. Y’know, because everybody’s doing it. Suddenly, those NOT frauding actually face a disadvantage.

Gladwell walks through one of the biggest Medicare fraud trials in history—involving cash kickbacks, lavish trips, “bribery, sham invoices….money laundering…[and] shady doctors.” The lawyer of the man found guilty for all this literally asserted in his defense that he had been an upstanding citizen in other locales until….he “came to Miami.”

That’s right: Miami was literally part of his defense. Within Miami’s “overstory,” the man argued that his behavior was the norm. He had been corrupted by it.

While the man was convicted and sentenced to 20 years in September 2019, another famous Floridian sympathized with his defense. In one of his final acts of his first term, Donald Trump commuted his sentence.

Gladwell also points out that the lax culture around fraud is so dominant that it helps explain how, after the hospital chain Columbia/HCA was busted for Medicare fraud (the first phase of the investigation emanated from its Florida office)—ultimately pleading guilty to all sorts of illegality while settling civilly for $1.7 billion—the CEO who’d “presided” over all those acts relocated to Florida

And ran for Governor….and won.

And then ran for Senate, and won.

Propped up by a forgiving Florida, the man was only a few votes shy of becoming Senate majority leader late last year.

Yes, I’m talking about Rick Scott.

Ohio’s Overstory

So that’s Miami’s overstory.

But when I read Gladwell’s chapter, you won’t be surprised to know that I quickly thought of Ohio.

Because the phenomenon he describes about the common practice and loose enforcement around Medicare fraud in South Florida of course reminded me of how Ohio politics have operated for too long as well.

Ohio’s “overstory” is clearly that pay-to-play corruption drives the state’s politics and corrodes public service. That’s the reason even the FBI considers us the leading state in the nation when it comes rot public corruption.

That corrupted culture infects everything.

It’s driven decisions around privatizing education for a generation. Dollars are pushed to low-performing for-profit institutions with no transparency, and even as they deliver piss-poor results (but some of that money gets kicked back to the politicians as donations, so it all keeps going).

It’s driven energy policymaking for all that time, leading to the First Energy scandal—the largest bribery case in Ohio history.

Pay to play has driven decisions over payday lending regulations, over who gets to make millions collecting medical, student and tax debt from everyday Ohioans, over who gets awarded lucrative legal work from the Attorney General, and over so much else we don’t even know about.

That’s the culture. It’s just how things work.

It’s not just accepted in Ohio. It’s how you succeed.

And if you call it out, you don’t succeed. For example, the only statehouse Republican who lost election in 2020 was the one who was the whistleblower exposing that First Energy scandal. Everyone else involved got reelected!

And when I ran for Attorney General promising to clean up pay to play in that office, I was told there’s no way I could win because no one would want to help me.

But we have one other similarity to Florida, which confirms that yes, indeed, Ohio’s overstory is rampant pay-to-play that spills over into outright corruption. And that this “overstory” and culture are not just accepted, but shape the path of how to get ahead.

Ohio, it turns out, has our own Rick Scott.

And like Scott, he too is benefitting from that overstory so much that it looks like he will soon be Ohio’s next Senator—replacing JD Vance, who stepped aside last night.

Jon Husted: “Scandalling Up”

There’s a term called “failing up.”

But in Ohio, Lt. Gov Jon Husted has not just failed—he’s “scandalled up.”

He’s played a key role in major controversies and scandals ever since his time as Speaker of the House in the early 2000s. Arguably more than any figure. And within Ohio’s “overstory,” rather than being harmed by that long-time and consistent involvement, it seems to have always propelled him ever higher.

To name a few: Husted played a role in gerrymandering the state, twice; he lost cases at the Supreme Court trying to suppress votes before presidential elections; he lost a case trying to suppress young votes; he purged millions of voters from the rolls; he supported a direct attack on Ohio’s democracy (in 2023) and lost; he opposed reproductive freedom in 2023, and lost.

His main role as Lieutenant Governor in recent years has been economic development. Yet despite endless Husted grandstanding and millions doled out, Ohio’s recent (between 4Q 2021 and 3Q 2023) GDP growth ranks 45th in the nation.

Since he began meddling in Ohio’s education system, Ohio has plummeted in the quality of our education—from 5th in the nation in 2010 to the mid-20s, according to Education Week.

So how, amid all this, did Husted move ahead?

To answer that, let me tell you about the worst parts of his record. Because in the “overstory” of Ohio, “worst” in other worlds turns out to be the keys to success here.

Scandal 1: Selling Off Public Education To the Highest Bidder

Husted’s education story begins back when he was Speaker of the House. And the failed record here isn’t about policy (although the “policy” has been a disaster), it’s about pay to play, and intentionally removing accountability to fuel that pay to play (a pattern that plays out repeatedly).

Specifically, the key moment came in 2005. New reckless experiments in for-profit charter schools were already displaying problems, although the architects were also emerging as big-dollar donors to GOP politicians. Pay to play at its worst—selling public education funds to private bidders.

An agency called the Legislative Office of Education Oversight—whose role it had been to provide oversight of education, and these new, for-profit schools—issued warnings that these new for-profit companies were fraught with risk, to students, and to taxpayers.

And those warnings sparked then-Speaker Jon Husted to take immediate action—disbanding the LOEO and its oversight role, as opposed to heeding their warnings.

Later, when the State Board of Education “tried to persuade lawmakers to put online charter school regulations into [a] bill.” , along with e-school regulations, Husted and the legislature also killed those efforts.

The new industry exploded, beginning Ohio’s downward spiral of wasted dollars and declining education outcomes while the recipients of these dollars converted a portion of them back into political donations. A classic pay-to-play scheme.

What difference did all this Husted handiwork make?

Just ask ECOT—the online for-profit charter school that emerged as the biggest player (and GOP donor), and later turned into one of the biggest scandals in Ohio history. (Horrible results, of course, but ECOT also collected millions in taxpayer funds for “students” they could not prove existed, prompting an FBI investigation).

For all his hard work on their behalf, ECOT bestowed Husted with their first honorary degree (Husted also received $36,000 from ECOT-related donors over the years. The party and others received far more.)

And when they gave him that degree, they said: “Without Speaker Jon Husted ... the ECOT revolution in e-learning in Ohio may have ended.”

In any normal, rule-of-law state, you’d think this level if disaster and culpability on something as important as education would be the end.

But this is Ohio politics and government.

Husted refused to give the funds back even after the scam imploded, with ECOT’s founder going bankrupt amid an FBI investigation. And when he’s asked about the scandal now, he shamelessly blames the very bodies whose warnings he defied.

Even worse, Husted wasn’t done yet even with undermining public schools.

State School Board Takeover

With more and more questions circulating around both for-profit charters and the explosion of vouchers (another looming disaster Husted takes credit for), voters in 2022 elected new members of the Ohio state school board who were dedicated to supporting public schools again.

What happened right after those candidates won a majority of the elected board positions—bringing back some needed independence to scrutinize the plummeting situation in a state that was once a forerunner in public education?

A big push to rip power away from that board. To keep the new oversight from coming.

And who was out front championing the removal of this independent oversight of our schools, more than anyone?

You guessed it, Jon Husted. Same trick that he pulled with for-profit schools:

At it again….

Even though 74% of Ohioans disagree with the power grab from a body THEY elect…

…and even though the Ohio Constitution establishes a separate education board and department, a provision the voters put in place decades ago precisely out of the concern that guardrails were needed, Husted pushed hard and publicly to make this happen.

And it did.

So now, most of the education decisions that have proved so disastrous—that led to one of the largest scandals in Ohio history—are even further behind closed doors.

Scandal 2: Selling Energy Policy To the Highest Bidder

If ECOT is the second largest scandal in Ohio history, number one is the First Energy scandal. Once again, Husted played an intimate role in making it all happen.

The heart of the scandal, as laid out in federal and state indictments, is that an insider energy utility lobbyist was paid a hefty sum—$4.3 million—by a large utility called First Energy (which later admitted it was indeed a bribe) shortly before being tapped to run Ohio’s utilities commission (PUCO), with an understanding that this insider will do what they ask (“as requested and as opportunities arise”) once he’s assigned that oversight role.

Think about that: A utility hand-picking and paying a lobbyist with $4.3 million because he oversees the body that regulates it. That is as corrupt gets. And so damaging to the public interest in so many ways—from how much we pay in rates to how we compete in the 21st century.

Anyway, this initial act later exploded into the largest scandal in Ohio history, taking twists and turns so extreme that two people involved (including the bribed lobbyist) commit suicide.

But the most damning part of what started it all is not that the bribed lobbyist got appointed.

It’s how he got appointed.

And who was at the center of that decision?

You guessed it….Jon Husted.

The Damning Timeline

First, take a look at this document:

The timeline makes clear that on December 17 and 18, 2018, Sam Randazzo (the appointed lobbyist) communicates about the vacancy on the utility commission, then sends a message detailing $4.3M in payments he wants made from 2019-2024.

Within a day of the message about the payment, the executives respond that they will pay the entire $4.3M right away. Only 13 days later(!)—Dec. 31–the executives send him the entire $4.3M.

Two days later, Randazzo receives it. Happy New Year!

So—the payment is not only offered but fully paid.

Now look at this document:

That’s right—Randazzo doesn’t even apply for the position with the utility commission until weeks later—on January 17!

Think about that: the “Executives” paid Randazzo $4.3M—both agreeing to and letting the full amount out the door—in December. Not only before he was named to lead the utility commission, but before he even applied.

The $4.3M Question: How Did They Know?

Paying him before he even applies for the position begs the obvious question: how were they already so confident he’d get the job—before he even applied for it—that they sent him $4.3 million in advance?

Was someone on the inside, or at the top, of the State’s selection process already giving them assurances—assurances so secure that they were that comfortable parting with $4M?

In other words, did they know parting with the $4.3M wasn’t a risk at all? Because it was already a done deal? Before he ever applied?

Well….

The Room Where It Happened

Who are the key decisionmakers for an appointment such as this? The newly elected Governor and Lt. Governor, that’s who.

And who is also all over the broader timeline of events taking place when the payment and appointment are made?

His name doesn’t rhyme with Busted, but it shares all but one letter:

• As I’ve explained in past videos, on the evening of December 18, 2018 (after the request for payment by Randazzo), at the Athletic Club of Columbus, Jon Husted and the Governor attend a dinner with First Energy executives, including one directly involved with the bribe. Afterward, the First Energy CEO sends Randazzo a text “indicating they discussed the open PUCO seat,” and that they discussed Randazzo in particular.

• Husted claims he doesn’t remember what was discussed: “Husted didn’t dispute that the dinner occurred but said he doesn’t remember if they talked about Randazzo’s appointment.”

• But the later indictments might refresh his recollection:

  • FIRST, one of the indictments says outright: “During the dinner, Randazzo’s name was discussed as a candidate for PUCO Chairman.” And later text messages revealed that “Jones and Dowling learned that Randazzo was the incoming administration’s preferred candidate.”

  • SECOND, one indictment included a copy of the written crib notes of a First Energy executive of what they planned to discuss at the dinner, and advice on how to approach the conversation. The note specifically tells the executive how to handle the meeting and frame the PUCO appointment.

But even more importantly, these notes make it clear that “Jon H.” is already keyed in on the details:

The notes refer to a “2-person PUCO deal” that a lobbyist has already discussed with “boss.” “…[H]e has discussed with Jon H…Jon is getting some negative feedback (maybe from Sam R.?)”

So Jon Husted not only knows going into this dinner key details of ideas being pushed within the First Energy world. But the note-writer thinks Husted may even have heard directly back from Randazzo about one of those details.

Bottom line: at the dinner, Husted was told that “PUCO and the chair spot specifically is so important to [First Energy’s] business and our success.” According to the indictment, “Randazzo’s name was discussed as a candidate…,” and First Energy learned that Randazzo “was the incoming administration’s preferred candidate.” When the dinner ended, those same executives met with Randazzo, and arranged to pay him $4.3M, which they did within two weeks. Randazzo was nominated weeks after tha.

So if we’re looking for which public officials allowed for the capture of state government by private interests, Husted looks to be at the top of the totem pole.

The detail guy—the insider who already knew specifics beforehand.

But there’s more:

• Randazzo later testified publicly about who “recruited” him to serve in the PUCO role: “He specified during the confirmation hearing that Husted and Laurel Dawson…were among those who helped recruit him.” (Husted, as Speaker of the Ohio House, had also recruited Randazzo to be on the commission years before (2007) as well.)

• On January 18, 2019, First Energy Executives texted one another about another PUCO appointment that they worry will turn into a “high hurdle”:

  • FE Executive: “‘Jason has a high hurdle and I don’t know if he will be able to clear it."“

  • FE CEO: “It’s called Jon Husted but hopefully you lowered that hurdle today.”

• A text chain a week after that shows that the FE Executive had a call with Husted to keep tabs on the Randazzo appointment. “Had a great conversation with Gov this morning,” Husted had told him.

• And on another occasion, Husted comes through once again. When Randazzo’s nomination hit a rough patch, apparently Husted (“State Official 2”) “perform[ed] battlefield triage.”

  

  From Federal indictment

I think this is what we call a pattern:

From beginning to the final appointment, Husted is intimately and intensely involved. The insider doing First Energy’s work for them. And this, as you’d expect, follows massive dark money support of Husted by First Energy.

Years later, the executives at that fateful dinner have been indicted:

Sadly, the lobbyist Husted “recruited” has not only been indicted, but committed suicide.

And the Ohio Attorney General is still investigating it all.

But what about Husted, whose name must be all over that AG investigation as it continues?

If you believe rumors and the news, he is about to be named the next Senator of Ohio.

The Ohio Overstory, Confirmed

Think about it: Everyone in Ohio politics knows this stuff. I’m simply citing articles and public documents in all that I shared above.

But none of Husted’s scandals of that past have ever seemed to matter.

As I explain in my book “Laboratories of Autocracy”:

“Just look at the trajectory of Jon Husted from young house member, to Speaker, to statewide office. He succeeded by building relationships with David Brennan and William Lager and Bob Murray and First Energy, not by standing up to them. And he built those relationships by doing what they wanted, when they asked. Writing the law that allowed their for- profit operations to start lapping up public education dollars. Eliminating the nagging agency that was warning about their problems. Gerrymandering the state behind closed doors despite promising reform publicly. And so on. All upside, no downside, even when it all explodes in scandal and lost public funds.”

“Jon Husted raked in dollars from for-profit charter school companies, intentionally tanked the oversight of those schools, then those schools went belly up after cooking the books. The FBI was all over it. Who cared? No one. With his honorary degree in hand, Jon is now the lieutenant governor. And neither he nor any other politician has faced any accountability for being active participants in the largest scam in Ohio history. In fact, Ohio’s current governor, lieutenant governor, state auditor, and attorney general all played active roles at key moments when Bill Lager needed their help. And all received thousands of dollars, often around the time they took those actions….”

“In this way, corruption itself becomes calcified as a part of state politics. Even when you do it, you’re fine politically. And when there’s no accountability even for corruption, there’s also no incentive to do anything about it, especially if you’re vacuuming up gobs of money from those behind it.”

I wrote that a few years back. Before even the worst of First Energy came out.

Now, Husted’s direct involvement is more clear than it’s ever been.

The state Attorney General is still investigating as I write this. And since the private side of the scandal has basically already been taken down, you’d assume that that investigation is focused on the public side. And no one on the public side was more involved than Husted.

Despite all of that, Husted looks to be Ohio’s next Senator. And assuming that happens, all of Ohio’s GOP—both the new and the old guard—will surround him and celebrate.

And that appointment and celebration won’t be a statement about Jon Husted as much as it it about how much deep corruption and pay-to play have become the heart of Ohio politics.

It is indeed our overstory.

And just as Rick Scott does for Florida, a Senator Husted will be the constant reminder that engaging in egregious pay to play is how you get ahead in Ohio politics.

Day 40—January 9, 2025

In a 5-4 decision allowing a New York sentencing hearing to move forward, the Supreme Court cleared the way for Trump to become the first convicted felon to assume the office of the presidency.