02 Mar 2015
By Brandon Moseley
Alabama Political Reporter
On Friday, February 27, the prosecution responded to a defense motion asking for more information about the 23 felon indictments against the embattled Speaker of the Alabama House of Representatives, Mike Hubbard (R-Auburn). The 45 page response gave a glimpse into some of the evidence of Speaker Hubbard’s dealings with some of the most powerful men in Alabama.
Judging by the email evidence released by the Alabama Attorney General’s Office White Collar Crimes Division the coming October trial is likely to see some of the biggest names in the Alabama corporate world have to take the stand to explain their relationship with the financially troubled Republican Speaker.
Former Alabama Governor Bob Riley (R) is Speaker Hubbard’s political mentor and longtime friend; but after leaving two terms as Governor in 2011 he became a registered lobbyist; thus it is likely a violation of ethics law for the sitting Speaker to ask the Governor for jobs, contracts, and money. But the prosecution alleges that that is exactly what Speaker Hubbard did.
Hubbard said in one email to Gov. Riley, “Can I just come work for BR&A (Bob Riley & Associates)? I need a job and this way I would work someone I respect….” The prosecutors also alleged that Hubbard asked Riley is the Auburn Network could handle marketing for BR&A. Knowing that this is illegal Hubbard suggested that Riley de-register as a lobbyist. Hubbard wrote, “I need to be a salesman for GB&R. Except for those ethics laws. Who proposed those things?! What were we thinking?”
Hubbard wrote Riley, “I still believe that you are a "strategic business consultant", not a lobbyist. You could hire a lobbyist for BR&A - a Riley Team person who will do it for virtually nothing - which will allow BR&A to hire Auburn Network, Inc. to handle your marketing needs. We could do media buying, polling, focus groups, design work, printing, anything you need.”
Birmingham area businessman Will Brooke is likely also going to have to testify about his dealing with Mike Hubbard. Brooke is a longtime Harbert Company Executive, a former Chairman of the powerful Business Council of Alabama (BCA) and a recent candidate in the Republican Primary for Congress. Brooke was a board member of BCA. Politicians are not supposed to be soliciting money and favors from lobbying groups like BCA or from the principals of such groups, but prosecutors allege that that is what Hubbard did.
Hubbard wrote to Brooke, “… I enjoyed visiting with Maggie [Brooke] at the State House last week and pledged my support again for the Boys and Girls Clubs. My goal is to make sure she is never unhappy with me! … I have not pestered you because I know you are extremely busy, but thought I’d check with you one more time regarding any potential business clients for my company, Auburn Network, Inc. I have signed up Southeast Alabama Gas to assist them with marketing and economic development which helps, but my employment with IMG ends at the end of this month so I am getting very close to hitting the panic button... It is ironic that my quest to change history and [g]ive Alabama a pro-business legislature has resulted in issues in my own personal business life. It is amazing how folks who urged me to be the leader to overthrow the bad guys in Montgomery now don’t want to talk with me.”
Hubbard later warned Brooke that he was considering resigning as Speaker due to his growing financial problems: “I will make it through this session, try to do as much good as I can, and make a decision as to what to do. It is amazing, and quite disappointing, that after the sacrifices I’ve made personally and professionally to finally get Alabama a pro-business legislature, no one in the business community is willing to work with me professionally to keep me there. Maybe I’m too much of a lightning rod. I suppose, as they say, no good deed goes unpunished.”
Brooke responded: “No, Mike, that’s not it. I think that folks are afraid to mess up, on either their or your side of the equation.”
Hubbard also allegedly solicited investment in his troubled Craftmaster Printing Company from Montgomery based political spin master and registered lobbyist Dax Swatek. While Swatek declined, the President of known Swatek client, Hoar Construction, did allegedly participate in the scheme. The indictment alleges that Brooke prepared a plan to save Craftmasters (which owed debts and back taxes) for Hubbard for free. Hubbard solicited and received investments from Will Brooke; Stern Agee, President and CEO, James Holbrook; Great Southern Wood President Jimmy Rane, the President of Great Southern Wood; and Hoar Construction President Rob Burton. Hubbard allegedly received $600,000.00 from these four powerful men. According to the indictment the total investment was $1.5 million but the other six investors were not named because they don’t actively lobby state government. The ten investors received preferred stock in the business plan that Brooke prepared for Craftmaster and admits in an email to Hubbard having discussed the situation with Gov. Riley. Speaker Hubbard then presented the plan to Regions Bank’s Troubled Asset division so the company was able to emerge from bankruptcy.
Even Alabama Governor Robert Bentley (R) appears to be a likely witness in this case. Also mentioned in the pleading is that SEAGD (South East Alabama Gas District) was paying Mike $12,000.00 per month to steer economic development projects to Southeast Alabama. According to reports submitted by Speaker Hubbard to SEAGD, Hubbard met with Commerce Secretary Greg Canfield (R) regarding the relocation of a truck plant from Pennsylvania to the Abbeville area. Hubbard also reported meeting with Secretary Canfield “on several occasions” to discuss projects in Abbeville and Ozark. SEAGD wanted to recruit new businesses to the southeast Alabama area that would directly and indirectly result in the purchase of additional amounts of natural gas from SEAGD. Hubbard also reported meetings he arranged or attended with Alabama Governor Robert Bentley (R). While everyone in the state would like to see South East Alabama get some economic development projects, does this mean that projects that could have been better served in other regions of Alabama, like Birmingham or even Hubbard’s own district, were passed over because they did not hire the Speaker of the Alabama House of Representatives?
The filing alleges that Speaker Hubbard solicited other registered lobbyists for goods and favors, including the former Governor’s daughter, Minda Riley Campbell and BCA Lobbyist Billy Canary. Hubbard wrote to Brooke, “I am going to DC with Billy [Canary] next week to visit some folks, including FedEx and the U.S. Chamber of Commerce.” Hubbard later emailed Gov. Riley, “Just met with FedEx. They are spooked about me being an elected official. Don’t think they will do anything with me. At least I made a contact with their top governmental affairs person. … They said they would look for opportunities, but not hopeful.” Hubbard even asked Canary to help him market his book, “Storming the State House.” Hubbard emailed Canary, “Bill: Do you think it would be possible to plant a seed with Karl [Rove] (probably a little closer to October 2) for him to make mention of STSH during his remarks at BCA? It would be a very nice plug and would certainly raise my stature with the folks in the audience for him to mention me… “ Could Karl Rove have to testify in this case? The state alleges that Mrs. Campbell arranged meetings for Mike while he was at the Paris Air Show with prospective clients.
The State is alleging that Speaker Hubbard’s used his office as Chairman of the Alabama Republican Party to obtain over one million dollars in personal gain for himself, Craftmaster or the Auburn Network. The prosecution claims that ALGOP Chairman Hubbard used his position as ALGOP chairman to benefit himself or Craftmaster by spending approximately $101,926.00 of ALGOP money directly with Craftmaster in exchange for printing services and that Hubbard used his position as ALGOP chairman to benefit himself or Auburn Network by spending approximately $41,836.00 of ALGOP money directly with Auburn Network in exchange for media services. They also allege that Chairman Hubbard directed ALGOP money to Craftmaster through an intermediary, Majority Strategies. That company received $787,379.00 from the Alabama Republican Party, which then spent $697,479 to Craftmaster. According to an email by Majority Strategies executive Randy Kammerdiner they were overcharged but: “Based on a message I got from Hubbard last night, our relationship relationship [sic] with them is still very tenous [sic]. And because I am a greedy bastard I would rather us swallow our pride and also make a lower profit margin in order to keep the client rather than getting black-balled in a state because we think the printer is making too much money and we don’t like being forced to use them.”
The prosecution names Tim Howe and his business entities, as nothing more than a pass through for Hubbard to conceal and launder ALGOP money to the Auburn Network. ALGOP spent approximately $171,203.00 through Howe’s companies on services provided by Auburn Network. Howe is likely to be another witness who could be called.
APCI employed lobbyist Ferrell Patrick is also listed in the pleading. According to the state, while APCI was paying Patrick for his lobbying efforts, APCI was also paying Hubbard $5,000.00 per month (approximately $95,000.00 total from August 2012 to December 2013) to work as a “consultant.” During this period the state alleges that the pair enlisted the help of state Representative Greg Wren (R from Montgomery) to help insert language into legislation that would make APCI the sole potential PBM (Pharmacy Benefit Manager) provider for the entire multi-billion Alabama Medicaid Program.
Prosecutors allege that Hubbard’s solicitation and receipt of $7,500.00 per month from principal Edgenuity/E2020 is another ethics violation.
They also claim that Speaker Hubbard’s used his office for personal gain through his $10,000.00 per month contract with Bobby Abrams’ business were also violations of Alabama’s ethics law. Former Chief of Staff Josh Blades has been named as having been ordered by Hubbard to pressure the U.S. Patent Office to award patents to Abrams’ companies, even though Blades and his office were being paid for by the taxpayers of Alabama. At the time Blades was one of the highest paid persons in state government.
The prosecution wrote that, “This pleading is neither an exhaustive list of the State’s evidence and theories of criminal liability, nor does it confine or limit the State’s ability to argue or present evidence at trial. On February 17, 2015, the State produced emails, bank records, business records, witness statements, and other documents totaling over 2.5 million pages to Hubbard. The State’s production, taken with the indictment is more than sufficient to inform Hubbard of the nature of the charges against him.”
In one email to Hubbard, Gov. Riley wrote to Hubbard, “I understand---believe me – I went 14 years on a Gov payroll and it was a challenge. Now and from now on you and I are going to be suspect in everything we do. However the ability to make great change is given to few people and you are one of the rare ones that can make it happen. Again question now is DO YOU “WANT” to be Gov ----or---make alot of money: good thing is you could do either but I am not sure it’s possible to do both. …… Talk to Rob (Gov. Riley’s son) and we will get together next week.”
Apparently, whatever happened in that meeting with Roby Riley, Speaker Hubbard never left government and never gave up that dream of being rich either. Now a lot of his friends and business associates are going to have to testify about the Speaker.
On Sunday, the Alabama Media Group joined Alabama Political Reporter Editor Bill Britt in calling for Representative Hubbard to resign his position as the Speaker of the Alabama House of Representatives.
27 Feb 2015
By Bill Britt
Alabama Political Reporter
MONTGOMERY —Sources within the State House have confirmed that it is believed that Speaker of the House Mike Hubbard is behind the attacks on Gov. Robert Bentley and his yet unknown tax plans.
The plan looks suspiciously coordinated, even to the point of having “Taxpayer Protection Pledge” guru Grover Norquist denounce the State’s Chief Executive. Norquist is quoted as saying, when Bentley says the State needs more revenue, what he is really saying is “I can’t do my job.”
Bentley dismissed Norquist's remarks as most Alabamians do when being lectured by Washington DC insiders - Democrat or Republican.
But Bentley is not the only conservative republican governor that Norquist has unleashed on lately.
Recently, Norquist has turned his ire on Gov. Sam Brownback, a man he once touted as a potential presidential nominee.
Three years ago, Kansas Gov. Sam Brownback spearheaded efforts that resulted in the largest tax cuts in state history. But battered with budget shortfalls, Brownback is dialing down his aggressive plan to slash the state's income tax. According to governing.com, Brownback is tapping the breaks on his big tax-cutting agenda because, “Kansas has been struggling with budget shortfalls and downgraded credit ratings since it passed major tax reforms in 2012 and 2013.”
Brownback has proposed raising taxes on alcohol and tobacco which has caused Norquist to lash-out at his former friend. Kansas faces a $648 million budget deficit for the fiscal year that begins in July according to a report by kansas.com. Brownback has also “proposed about $211 million in tax increases to help fill the gap, including raising state taxes on cigarettes from 79 cents a pack to $2.29 a pack and raising the tax on liquor from 8 percent to 12 percent.”
In the Jayhawk State, the advocacy group backed by Koch Industries has taken to criticizing the once darling of the conservative right.
Bentley, it is rumored, will be looking at a tobacco tax as a part of his overall plan to fix the State's ailing fiscal future.
Here at home, insiders say that this battle over taxes is more about Hubbard's legal troubles than Bentley’s or the State's budget shortfalls.
Speaking on background—for fear of personal retaliation by Hubbard—several State House insiders say that Hubbard is behind the efforts to discredit Bentley. “This is all tied to Bentley not killing Mike’s indictments,” said one State House politico. Another says that Hubbard is also wanting to drive down Bentley’s popularity number so that when Bentley takes the stand in Hubbard’s public corruption trial, that he will be less believable. “Hubbard is afraid of losing his power and his freedom. Bentley is the one that can take it. What better way to hit Bentley and try to make him the boogyman.”
It will be difficult for Hubbard or the cabal of legislators lining up against Bentley to weaken the governor’s popularity among the people. A trip to any Big Box store in the State will prove that Bentley is the man people trust and that as far as Hubbard, if they know his name at all, it is for being indicted by the State on 23 felony counts of public corruption.
According to documents uncovered by sourcewatch.org, Norquist’s “role as a major player on tax policy came at a time when the tobacco industry was floundering with its conventional lobbying.”
Internal memos reported by Source Watch show, “In February 1994 Philip Morris public relations staffer David Nicoli and lobbyist Kathleen Linehan were pondering the possibilities of generating letters opposing an increase in the Federal Excise Tax [FET] on tobacco. Nicoli turned his mind to potential of the anti-tax groups. In an e-mail to Linehan, Nicoli confessed that he didn’t have a ‘good enough grasp on these groups to give you a final read yet. But tentatively, I like the anti-tax groups (Tax Foundation, de Toqueville Institute, Citizens Against Government Waste, National Taxpayers Union, Americans for Tax Reform, etc) because we are in an election year, they can give a good spin on the FET, they can raise havoc w/the rest of the taxes in the Clinton plan too, we have good relationships w/them, and some of them are no holds barred types that can generate some real heat in the field.’”
Source Watch claims it was collusion between Norquist and big tobacco that was the beginning of the anti-tax pledge.
But here in the Yellowhammer State, it is believed to be a scheme, hatched by the indicted Speaker.
25 Feb 2015
By Bill Britt
Alabama Political Reporter
Gov. Robert Bentley says the State must raise taxes to meet its fiscal obligations, and he is being beaten like rented mule for even making the suggestion.
Now, no one should be happy that his campaign website featured an ad that, among other things, said “No New Taxes,” but Bentley is a Republican and saying that he was going to raises taxes a little would have meant that he only beat his Democratic opponent by 60 points.
That aside, they have yet to hear his proposal, but they are totally against it.
But this battle is not, let me repeat, is not over taxes. It is all about who will set the agenda and determine the future of our State. Will it be Robert Bentley or Speaker Mike Hubbard and the shadow government of former Gov. Bob Riley?
The State Legislature has only one constitutionally mandated responsibility: Pass a budget. For the last four years they have balanced the State’s budget (which is mandatory) by cutting or as they say “right-sizing government,” and by borrowing hundreds of millions of dollars from the Gas and Oil Trust Fund.
In reality what we have seen over the last four years is slash, burn and borrow, not fiscal sanity.
In the past, the State has relied on federal dollars and other tricks to balance the budget. But Bentley thinks the legislature should stop fooling itself and the citizens and fix the problem now, rather than at some magical time in the future. But this means Bentley is in charge and they can’t have Bentley in charge.
Bentley says, “It time to eat your vegetables,” but they would rather not. They would rather drink the kool-aid. It’s tastier and Hubbard has a large supply.
Anyway, careerist politicos do not want to have to tell their constituents that they realized the ship was sinking, and actually did something to repair the damage rather than pretending that the water is good for them. And if Grandma drowns, she was just a burden on the state.
Most politicians live in a kind of Never Never Land where they are free to do as they wish, because they are special. They are special because they have been elected to a high office. And because they are special, they think they have been endowed with a special wisdom.
Sadly, winning an election may make an individual think they have something that others do not, but the fact is votes don’t make one wiser.
According to Proverbs 29:11, “A fool utters all his mind: but a wise man keeps it in till afterwards.”
But too many of our legislators don’t have the patience for wisdom, they want to show toughness.
Sen. Bill Holtzclaw (R-Madison) has even used his campaign funds to buy a billboard to fight Bentley.
(Ignoring advice from Proverbs 29:11)
Here in Alabama, our politicos live in a Never Never Land where Captain Hook is the good guy and good ole Dr. Bentley should stick to shaking hands and hugging babies.
The Governor’s plan could be terrible, but no one knows, and yet the ALGOP passed a resolution against it. Is it actually possible to be against something even though you have no idea what it is?
Of course, taxes are part of the Panphobia of most Republicans, and rightfully so. But, to condemn something before it is even known is a little odd.
But then again, this is not about taxes...it's about control.
Politics should be a contest of ideas played on a field of intellectual honesty. But it seems no one wants to engage in the conversation, much less be intellectually honest.
Bentley wants to raise some taxes to fix the holes.
He finally wants to lead.
Maybe we should give him the chance.
27 Feb 2015
By Bill Britt
Alabama Political Reporter
MONTGOMERY—As the State legislature heads into its 2015 session, the number 23 will be an important one to remember. Speaker of the House Mike Hubbard, (R-Auburn) will guide the legislative agenda even though he has been indicted by the State on 23 felony counts of pubic corruption.
When Hubbard pushes for charter schools, it will be important to remember that Count 10 of the 23 felony charges against him involves Edgenuity, Inc. and/or E2020, which, according to the company’s profile, produces online course material that can be used at home or in the classroom.
The opening of charter schools around the State may very well prove to be a boom for the online course provider that paid Hubbard to lobby on its behalf.
Business Council of Alabama (BCA) has become the new power house behind Hubbard’s agenda for the State, and now, serves in much the same capacity as the once powerful Alabama Education Association AEA.
In Count 22, Hubbard is accused of receiving “assistance with obtaining new clients for Auburn Network,” from Billy Canary, the head of the Business Council of Alabama, (BCA). And in Count 23, Hubbard is charged with receiving assistance with obtaining new clients for Auburn Network and/or financial advice regarding Craftmaster Printers, from Will Brooke, Board Member of the Business Council of Alabama.
So, when a bill comes to the floor of the the House with the backing of BCA, legislators and concerned citizens should remember this extraordinary relationship with the man who holds the Speaker's gavel.
Any bill introduced that will favor any special interest or company with ties to the lobbying firm of Swatek, Azbell, Howe and Ross, (SAHR) should be looked at more than once. In Count 4, Hubbard is accused of using his office for obtaining personal gain through Tim Howe d/b/a The Howe Group, LLC and/or SRM Media and Advertising, LLC.
Swatek is named in Count 15, where Hubbard is charged with soliciting an investment in Craftmaster Printer. However, Swatek is not listed as giving Hubbard investments as did others. This has led to speculation that Swatek may have realized such an investment was illegal and offered the prosecution his cooperation.
It will still be of great interest to see which bills coming from the House are directly or indirectly linked to SAHR.
Medicaid is another issue that will come before the legislature this session, and Hubbard has been charged in Counts 5 and 6, with using his office and voting to secure an “exclusive” contract for American Pharmacy Cooperative Inc. (APCI), which would have given the company the right to be the sole provider for pharmacy benefits management under the State’s Medicaid program.
Any Medicaid legislation will require close scrutiny for any trail that lead back to Hubbard.
Then, there is any legislation having to do with interest groups represented by former Gov. Bob Riley or his daughter Minda Riley Campbell, who are respectively in Counts 21-22.
Any legislation that is tied to Hubbard’s “pro-business” agenda will require special examination because of his so-called business development deals, as mentioned in Counts 6 through 14.
As this legislative session opens, the State’s website that displays the various pre-filed bill is broken. As of last week only 12 bills had been pre-filed in the House a small number by historical numbers. This has lead many political insiders to worry that Hubbard has more to hide than ever.
Of all the things that will necessitate constant vigilance, an interesting exercise will be to watch how many times the media follows any of his quote with, “who is under indictment on 23 felony counts of public corruption.”
23 Feb 2015
By Bill Britt
Alabama Political Report
Speaker of the House Mike Hubbard has put forward a number of alternative theories as to why he was indicted by the State on 23 felony counts of public corruption; none of which included the possibility that he may have actually committed these crimes.
Like a good criminal defense attorney, he is using the same set of facts to draw a different conclusion in order to survive another day in office.
The most potent alternative that Hubbard has put forth, is that his investigation and indictments are the result of a “...political conspiracy” fabricated by Attorney General Luther Strange. In Hubbard’s substitute reality, Big Luther has his sights set on the Governor’s Office in 2018, and he must rid the field of his arch rival Hubbard to ensure his own victory.
A plot not quite worthy of a Shakespearean drama or even a episode of House of Cards, but in the small world of State politics it passes—at least for some— as reasonable. There is certainly enough political chicanery going on around the State that it could be a possibility in the minds of a few.
Of course, it requires that one believe that Strange is an unprincipled, power hungry politico who has complete control over W. Van Davis and Matt Hart, who head the prosecution team (and that they are corruptible). And, it would also suggest that Strange is willing to gamble away his own political career on the hopes of convicting, perhaps, the most powerful and cunning politician in the State.
During his political career, Strange has offered little evidence that he is ruthless or reckless. To the contrary, he has almost uniformly demonstrated a lack of political calculation or willingness to destroy others for personal gain.
However, a quick read of Hubbard’s vanity tome, Storming the State House shows that he, not Strange, has an appetite for political destruction. It is Hubbard, some would argue, who has mastered the art of political manipulation in its most sadistic form.
Where are the facts that point to a political motivation for Hubbard’s prosecution of Strange?
There is only the conjecture that Strange wants to be governor, not something he has stated; but Hubbard has.
Where is the evidence that Strange is guiding the prosecution? All facts point to a totally different conclusion.
On January 31, 2013, Strange officially authorized former St. Clair County Supernumerary District Attorney W. Van Davis to “assume oversight of the State’s interest in the current investigative matters relating to State Representative Mike Hubbard.” The letter shows that an investigation of Hubbard had been underway, and that now there was a need for Davis to assume the oversight.
In December 2013, Alabama GOP Chairman Bill Armistead told party leaders that he was served a subpoena from the Attorney General’s Office seeking GOP financial records covering the 2010 election cycle.
Armistead said the subpoena was part of a State Grand Jury investigation into Republican campaign finance activities, and in particular, the direct and indirect payments from the State party to Speaker Hubbard’s various printing and advertising companies. Armistead had previously ordered as internal audit that found Hubbard’s companies received at least $800,000 in payments from the State party and from a Florida-based company that took ALGOP payments, then funneled the money back to Hubbard’s businesses.
Davis was enlisted the following month. However, the Lee County Grand Jury was not authorized until July 29, 2013, and did not meet until September. Court documents show that on July 29, Judge Jacob A. Walker III, “Ordered that such special grand jury be drawn from the jury panel to be assembled for orientation on August 19, 2013.”
This proves that a prior Grand Jury was being used to investigate Hubbard’s alleged criminal activities.
A careful examination by this publication showed that during the 2010 election cycle Attorney General Strange received $150,000 from Hubbard-controlled PACs and spent $29,172.60 (or 19.45 percent) with Hubbard-owned companies. Interestingly, on May 24, 2010, Strange received a campaign contribution from Hubbard’s NETWORK PAC for $20,000. One day later, Strange’s campaign paid $20,000 to Hubbard’s Network Creative Media, a company that produces campaign ads.
The records subpoenaed from the ALGOP are believed to have alerted Strange that he could possibly be a witness in the investigation of Hubbard. This, according to those in the AG’s office at the time say, is what led to Strange’s recusal. This happened around seven months before the Lee County Grand Jury, and well before any knowledge of the actions that led to most of Hubbard’s indictments.
Hubbard has said that all of this is a witch hunt. But, the evidence seems to reveal that this is actually the result of a very thorough investigation, started before December 2013 and continuing to this day.
The facts show that the investigation was started by Hart, and that Strange only became aware after Hart’s initial report. A short time later, Strange, assisted by advice from within the Attorney General’s Office, recused himself due to an abundance of caution. There is no evidence that Strange has directed the investigation on any level.
Once Hubbard is confronted at trial, it is expected that his alternative theory will change from "...a political conspiracy" to a “confessional defense.” In other words, Hubbard is going to admit to the things he is accused of doing, but will offer a different story as to why he did them.
But, that is a story for another time.