Ethics Commission withdraws McCalla opinion after charities line-up

December 8, 2016

By Bill Britt
Alabama Political Reporter

In a unanimous vote on September 1, 2016, the Alabama Ethics Commission issued advisory opinion 2016-24, which it believed clarified the question regarding public officials soliciting lobbyists and principals for contributions to a charitable organization, operating as a 501(c)(3) nonprofit.

The issue was raised by the nonprofit group, Friends of McCalla.

After approving the opinion in a 5-0 vote, the Commission gave a 30-day window for public comment; however, it was extended past the 30 days to December 7.

In the interim, several well-known charities became concerned about the definition of a principal in the Commission’s opinion, On Wednesday, a number of of 501(c)3 directors were on hand to add their comments to the public hearing. Also present were some of the State’s most successful trial lawyers. Of the many attorneys present, several participated directly in the case of former Speaker Mike Hubbard, who was convicted on 12 felony counts of public corruption, including receiving a thing of value from a principal.

Retired Judge and former Senator Jerry Fielding, as Chair of the Commission, presided over the hearing and fast-paced the comments given by various charities and attorneys. Even the State Bar Association weighed in on the issue through its in-coming president, August Dowd.

Since Hubbard’s conviction, there has been considerable concern over the definition of a principal. Many in the business community and recently among charitable organizations worry the meaning is too broad. In the Hubbard case, Judge Jacob Walker, III found as a matter of law that principals include directors and senior leadership of an organization.

Each speaker, including former Supreme Court Justice, Sue Belle Cobb, expressed how confusion over the law has harmed charitable giving. From the Association of Nonprofits, which represent 500 charities, to the YWCA, there was a stream of testimony on how corporate donors are concerned about making a donation that runs afoul of the ethics laws. Yet no one seemed to articulate how the opinion was specifically perilous.

In the McCalla opinion the commission found, “Public officials and employees and their families are permitted to solicit donations to Friends of McCalla from principals as long as the purpose for doing so is to benefit the public, and as long as funds raised will not provide any personal gain to the public official, public employee, their family or a business with which they are associated. If they are members of the Board, they may solicit on Friends of McCalla’s behalf unless they are paid for Board service or derive any other personal gain from service.”

SEE MCCALLA OPINION

Maynard Cooper Gale lawyer Ted Hosp, representing the Business Council of Alabama (BCA), said the current law is being used to punish something that looks bad but isn’t necessarily illegal. Hosp suggested that only if there were a quid pro quo should there be legal ramifications and concluded the statute never intended to bar giving or receiving things of value unless it was meant to influence a desired outcome.

Attorney Max Pulliam with the Alabama Association of Nonprofits argued the statue the Commission’s definition in McCalla contradicted the narrow one passed by the State Legislature.

The charities represented at the hearing spoke passionately about how charitable giving was suffering because lawmakers, corporate boards, and other high profile individuals were waiting for the Commission’s ruling on McCalla.

After the last speaker for the Association had concluded, Judge Fielding asked attorney J. Mark White if he would like to comment. White, who seemed to have no official role in the proceedings, declined in a moment of levity.

After the public comments had been heard, Commissioner Butch Ellis called to resend the McCalla opinion at which time Ethics Director Tom Albritton ask that it simply be suspended to allow for a framework for continued discussion. But his plea was ignored.

Fielding called for a second which was given by retired Judge Charles Price. It was put to the vote and Fielding, Ellis and Price chose to withdraw the McCalla Opinion. Commissioner Jerry Wood reminded Fielding that he had not called for “nays” which led to Woods and Stewart Tankersley casting their vote against withdrawing McCalla.

It was widely observed that Hubbard’s attorneys, White and Dowd, were at the hearing as well as Joe Espy, who represented Jimmy Rane and Will Brooke during the Hubbard trial. Also present was Max Pulliam who represented billionaire Bobby Abrams in the Hubbard case. Hubbard was convicted of receiving a thing of value from Brooke and Abrams.

The Attorney General’s office is working to further clarify and strengthen the ethics laws passed by the Republican supermajority.

 

Ethics Commission withdraws McCalla opinion after charities line-up

by Bill Britt Read Time: 4 min
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