Kentucky Attorney And Political Operative Tied To Ohio Bribery Scandal
An attorney with deep ties in Kentucky Republican politics and super PACs is connected to a political scandal that saw Ohio's former Speaker of the House charged with a $60 million bribery scheme.
Eric Lycan until recently was the general counsel for Kentucky's Republican Party, and he's been at the helm of several super PACs and other nonprofits that have shaped Kentucky's politics. He's also the treasurer of Generation Now, a nonprofit and a defendant in the Ohio federal bribery case.
Lycan has not been charged in the Ohio case, and is referred to in the affidavit only as "the attorney." The Federal Bureau of Investigation says energy companies funneled money to former Speaker of the House Larry Householder and other Ohio politicians using Generation Now and a network of other secretive nonprofit organizations led by Lycan as treasurer.
Robert Maguire, the research director at Citizens for Responsibility and Ethics in Washington, a D.C.-based campaign finance watchdog, said it's very easy to hide political money in the existing legal structure of non-profit entities. What's unique about the Ohio case, Maguire says, is that investigators took notice and were able to find a paper trail.
"If you have enough money to spend millions of dollars on politics, you have enough money to hire the best lawyers and accountants in the country to cover your tracks," Maguire said. "We know that the Householder issue is not the only instance of using these groups for corrupt purposes, we just don't know the full extent of it because these groups are so lightly policed around the country."
Lycan, who did not respond to requests for comment, has made a career in Kentucky of setting up nonprofits similar to the one he served as treasurer for that's now under scrutiny in Ohio. Maguire said these nonprofit networks are tailor-made to facilitate political contributions with limited disclosure. Oversight of groups such as these is rare, so it's difficult to know the true extent of their political activity, but at least four political action committees and three social welfare organizations associated with Lycan have been active in recent Kentucky elections.
Organizations associated with Lycan have accepted contributions from business tycoons and people with major business in front of the state, including the future chairman of the board at Braidy Industries. The groups have spent millions since 2014 supporting some of the most powerful politicians in the state, including Sen. Mitch McConnell and Rep. Andy Barr.
Lycan's Kentucky Career
Eric Lycan is an attorney at Embry Merritt Shaffar Womack PLLC, a Lexington law firm. Lycan's bio there boasts "more than two decades of experience providing strategic counsel to a broad range of industries, organizations, candidates and public officials on law and public policy, including campaign and issue advocacy, government ethics and regulatory compliance."
Before he moved to Embry Merritt Shaffar Womack, Lycan was a partner at Dinsmore and Shohl law firm and general counsel for the Kentucky Republican Party.
He is currently the general counsel for the Kentucky House Republican Leadership, a role he has held since January 2018, according to his Linkedin page.
Kentucky House Speaker David Osborne said in an emailed statement that the Republican caucus is aware of the investigation in Ohio.
"It is our understanding that no allegations have been made that Mr. Lycan participated in any illegal activity. The Kentucky House Majority expects the highest standard of ethical conduct from our staff and we have no indication of anything other than that," Osborne said. "The Caucus remains committed to representing the people of Kentucky in a legal, ethical, and appropriate manner and it is relevant to note that our state's legislative ethics code is among the most stringent in the nation."
Lycan provided legal work for McConnell's 2014 re-election campaign, mostly specific to election day issues, according to a spokesperson for the McConnell campaign. Over the course of his career, McConnell has steadfastly blocked or rolled back attempts to require more campaign finance disclosure.
Political Action Committees
Lycan serves as the treasurer for several political action committees, many of which were centered on or active in Kentucky politics. Super PACs like these can raise unlimited amounts of money to spend on elections, but they are required to report to the Federal Elections Commission, so their political activity is easier to track than other kinds of political nonprofits.
In 2016 he was treasurer of Stand for Truth Inc, a super PAC that spent over $10 million in support of Texas Senator Ted Cruz during the presidential primary. The Federal Election Commission received a complaint from the Campaign Legal Center involving Stand For Truth in 2016 and sent letters to Lycan. According to the complaint, Stand for Truth accepted $250,000 in campaign contributions from a limited liability company meant to keep the true donors identity obscured. The FEC reached a deadlock along partisan lines and did not take action. Democratic Commissioner Ellen Weintraub said in her opinion the LLC's donations were "the latest examples of allegations of someone using an LLC as a straw donor and facing no repercussions."
In the 2018 elections, Lycan was an officer of two more PACs: he was treasurer of the Kentucky Patriot PAC, which spent most of its $66,000 supporting Andy Barr for Congress by attacking Democrat Amy McGrath.
And he was the designated agent and assistant treasurer for the group Kentucky Tomorrow, which supported Gov. Matt Bevin as he worked behind the scenes to help Republicans in competitive districts, according to the Paducah Sun. Its donors include major energy company executives such as the CEO of Midland Energy, S. Javaid Anwar, and Murray Energy CEO Robert Murray.
Charles Price, chairman of the board of directors at Braidy Industries, gave Kentucky Tomorrow $30,000. Braidy Industries is the troubled company struggling to build a $1.5 billion aluminum mill in Eastern Kentucky.
Lycan is no longer listed on Kentucky Tomorrow's paperwork filed with the FEC as of 2019, but the group reports paying Lycan's law firm $4,000 for the 2020 election cycle.
Social Welfare Organizations
In addition to political action committees that have to disclose their donors to the FEC, Lycan is the registered agent for several 501(c)4 nonprofit organizations active in Kentucky. These "social welfare organizations" don't have to disclose their donors as long as they aren't primarily and directly involved in political campaigns, so information about these groups is harder to come by.
Often these groups act as a middleman between publicity shy donors and super PACs or campaigns, who have to report more details about their finances.
Lycan was the registered agent in 2018 for the Kentucky Chamber Advocacy Committee, Inc, when it filed incorporation records with the Kentucky Secretary of State. The committee is based out of the Kentucky Chamber of Commerce’s office and is led by Ashli Watts, the current CEO of the Kentucky Chamber.
"Eric Lycan provided formational legal counsel to the Kentucky Chamber in 2018 when we established the Kentucky Chamber Advocacy Committee, Inc.," Kentucky Chamber’s communications manager Sawyer Coffey said in an email.
Coffey said Lycan was not involved in the group's operations and that the chamber's professional relationship with Lycan ended in April 2019, when he left Dinsmore and Shohl.
These entities have all the hallmarks that Maguire of CREW says signal a political dark-money conduit: They report having little or no full-time staff and don't release records of their spending. The Committee for Judicial Fairness and Kentucky Strong both dissolved in October of 2018, Maguire said such nonprofits avoid scrutiny by shuttering before election season ends and reports are due to the FEC.
The Ohio Case
The bribery allegations in Ohio paint a picture of how networks of non-profits like this can be used to hide contributions from corporations looking to gain favor with politicians.
The investigation was led by FBI special agent Blane Wetzel, who, according to the affidavit, worked for a member of the Michigan House of Representatives prior to joining the FBI. He said in the court filing that FirstEnergy Corp. gave $60 million to Generation Now, a social welfare 501(c)4 that does not have to disclose its donors. According to tax documents, Generation Now contributed to the Coalition for Growth and Opportunity, another social welfare organization, and Growth and Opportunity PAC, a 501(c)3 political action committee.
Unlike Generation Now, Growth and Opportunity PAC does have to disclose its donors, but it can spend money advertising for political issues. The PAC spent millions during the 2018 election cycle running ads and otherwise supporting Ohio candidates such as Householder, the former Speaker of the House, who was arrested on July 21. Then the groups spent money supporting House bill 6 in 2019, a piece of legislation that loosened utility regulations and effectively bailed out struggling power plants owned by the Akron, Ohio-based FirstEnergy Solutions.
The FBI is charging Generation Now, Householder and four others with racketeering. The defendants are accused of conspiring to funnel money from businesses like FirstEnergy into secretive nonprofits led by Lycan, including Generation Now and the Growth and Opportunity PAC, with the goal of electing industry friendly politicians and passing legislation that would monetarily benefit the energy industry.
In May of 2019, as Generation Now was bankrolling ads to support of HB 6, including some ads here in Kentucky, Lycan signed the paperwork to create another entity in Ohio, this one a for-profit Limited Liability Company called "People Like Me LLC." Filings with the Ohio Secretary of State list People Like Me LLC's purpose as promoting "clean and affordable energy generation in Ohio."