13 Dec 2012
- Last Updated on Tuesday, 19 February 2013 06:34
- Published Date
By Bill Britt
Alabama Political Reporter
MONTGOMERY—A Special Grand Jury has subpoenaed records concerning Alabama Speaker of the House Mike Hubbard (R-Auburn). According to three sources with intimate knowledge of the investigation, a Special Grand Jury led by the Public Corruption Unit of the Alabama Attorney General’s Office is gathering documents related to Hubbard’s time as Chairman of the ALGOP.
All have spoken on conditions of anonymity.
Hubbard, who is credited with being the architect of the 2010 takeover of the State House, has recently come under fire in press reports related to quid-pro-quo arrangements between campaign contributions and Hubbard-owned businesses.
It is not certain exactly what the Grand Jury is looking for, but sources speculate that it has to do with Hubbard’s business dealings, as well as money that was filtered through the RSLC.
It has also been said by those with knowledge of the proceedings that Attorney General Luther Strange has recused himself from the investigation.
Bill Armistead, current chairman of the ALGOP, has declined to comment on the allegations.
Hubbard's office was contacted for this report but has not yet answered a request for information.
A recent report at AL.com said that, “In 2010, the Alabama Republican Party negotiated a deal with a Florida company to design hundreds of glossy and colorful campaign flyers for GOP candidates seeking seats in the Legislature.
The contract with Majority Strategies of Ponte Vedra Beach, Florida, was for $848,687.
“Once the deal was signed, Majority Strategies then subcontracted out the printing, shipping and postage costs of the flyers to another company: Craftmasters Printing of Auburn.”
Craftmaster is owned, in part, by Hubbard where he serves as a company director. This deal was contracted during the time he served as Chairman of the ALGOP.
This money exchange came to light due to a leaked report conducted by the current ALGOP Chairman Bill Armistead. Armistead had the report compiled upon his election as the state GOP head. The audit covered at least, in part, Hubbard’s tenure as Chairman of the ALGOP. Hubbard has denied any wrongdoing saying, "I have nothing to hide and that, whatever it is - and it's not an audit - shows we did nothing improper. Nothing."
In letter from Hubbard to the GOP Executive Committee dated June 28, 2012, Hubbard denied any impropriety, pointing out that he had been open “about my desire to place an added emphasis on running our state party operation like a business.” He reminds the GOP leadership how he “raised and spent over 5 million on behalf of Republican candidates with overwhelming success.” The internal audit conducted by the GOP only seems to address the money coming into Craftmaster from Majority Strategies but does not appear to address the other million plus dollars that came directly to Hubbard-owned businesses from campaigns and PACs.
In the Al.com report by Chuck Dean, Hubbard says that “the contract with Majority Strategies was negotiated by then GOP executive director John Ross.” Ross was Hubbard’s second-in-command, here Hubbard seems to attempt to deflect any potential conflict of interest away from himself and onto Ross.
Ross is now a partner in the high-powered lobbying group Swatek, Azbell, Howe & Ross. According to Hubbard’s book “Storming the State House,” “[Ross] continues to work closely with the members of newly-elected Republican majority and is assisting with the efforts to help preserve those majorities in 2014.”
Ross along with Dax Swatek, and David Azbell are key lieutenants of Speaker Hubbard and have been reported as receiving lucrative contracts from state government.
Mr. Hubbard has tried, in the past, to distance himself from any accountability for questionable activities by pointing to members of his staff or confederates.
The Craftmaster’s pay-for-play story began to surface in October 2010 in a report by the Opelika-Auburn News.
Reporter Joe Mcadory asked then-GOP Chairman Hubbard about $47,633 in campaign money spent by two GOP candidates with Craftmaster Printing and Network Creative Media (another Hubbard-controlled company).
To Mcadory’s inquiry, Hubbard said, “Out of 80 candidates, you’ve got two using Craftmaster? And one is from Auburn and his cousin is the president of the company, and they do really good work. Is this really a story?” Hubbard further dismissed the idea that he would profit from the transactions saying, “I‘ve never made a penny off of Craftmaster. My job is to get people elected.”
However, the money reported by AL.com is only the tip of the iceberg.
When the money from Majority Strategies of Florida, is added to the money directly spent by GOP candidates with Hubbard-controlled companies the total reaches nearly 2 million dollars.
Much of the direct money flowed into Network Creative Media which is a Hubbard-owned advertising agency. According to the company’s website they specialize in radio, TV, print, outdoor, direct marketing and web strategies.
PACs directly controlled by Hubbard or influenced by him that spent money with his companies were: 136 Years PAC, NETPAC, Alabama Republican Party and Alabama Republican Party (Federal PAC).
PAC-to-PAC transfers were made between the four Hubbard-controlled PACs involved in these transactions to include:
The 136-Year PAC received $50,000 from ALGOP PAC and $100,900.00 from NETPAC, then spent $15,334.55 with Hubbard-owned companies.
NETPAC received $158,000.00 from ALGOP PAC; $150,000 from Friends of Mike Hubbard; and $85,000 from 136 Year PAC. This PAC spent $16,020.29 with Hubbard-owned companies.
There is also the reports that Hubbard, while head of the ALGOP, took money from Poarch Creek Band of Indians that was filtered through the RSLC, On October 10, 2010, the Republican State Leadership Committee (RSLC) reported receipt of $250,000 from the Poarch Creek Indians. On October 14, 2010, the RSLC reported an expenditure of $200,000 to the Alabama Republican Party. On October 15, 2010 the Alabama Republican Party reported receipt of $200,000 from the RSLC.
It is not known if this is part of the Grand Jury investigation, but those close to the proceeding agree it may have some bearing on the case.
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