Recent Political Scandals Prompt New Wave of Ethics Reform Proposals

Recent headlines surrounding utility companies and their role in shaping public policy could pose new challenges for lobbying regulation and compliance. A pair of political scandals tied to utilities in Midwestern states have prompted a chorus calling for enhanced ethics reform when it comes to state lawmakers’ interactions with lobbyists. 

Last month, the Speaker of the Ohio House of Representatives, Larry Householder, was arrested along with several associates in connection with a $60 million bribery scheme. The indictment alleges that Householder and his conspirators accepted bribes from an Ohio electric utility company in the form of campaign contributions that backed candidates who would support Householder’s bid to become Speaker of the House. In return, these candidates would support legislation (OH HB 6), which would provide a bailout for the utility provider’s two nuclear plants while cutting subsidies for renewable energy. The bill passed over protests from environmental advocates and business groups. The indictment also alleges that the utility set up a nonprofit political group called Generation Now that successfully countered a ballot initiative meant to repeal the bill, to the point of intimidating supporters of the repeal effort. In response to the criminal charges, the Ohio House of Representatives voted to remove Householder as Speaker; he retains his seat in the legislature for now.

Ohio isn’t the only Midwestern state undergoing a political scandal involving a major statewide utility. A few days before the Householder indictment, federal prosecutors signed off on a deferred prosecution agreement with a major Illinois utility provider. Per the terms of the deferred prosecution agreement, this provider will have to pay $200 million in fines and comply with federal regulations after prosecutors found that they provided favors to associates of an unnamed “Public Official A” in exchange for favorable treatment in the Illinois General Assembly. Although unnamed in the indictment, reporters deduced that “Public Official A” is Michael Madigan, the longest serving State House Speaker in the country. Madigan has denied any wrongdoing and has resisted calls for his resignation from both the legislative and party positions that he holds. The latest in a long series of corruption scandals in Illinois (four state lawmakers have faced federal charges over the past two years alone) has led lawmakers to call for further state ethics reforms.

These two scandals will almost certainly have an impact on ethics laws in both states. Illinois and Ohio have seen calls to reform state ethics laws, especially in Illinois, a state with a reputation for political corruption. High-profile corruption scandals in the last decade led to Illinois changing its lobbying reporting procedures in 2014. Ethics reform will likely be a component of legislative and governing agendas for many states in response to political scandals. 

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