By Bill Britt
Alabama Political Reporter
MONTGOMERY—Speaker Mike Hubbard cast repeated votes in favor of House versions of a bill giving exclusive rights to manage Alabama’s Medicaid prescription drug purchasing to a company that employs Hubbard under a lucrative public relations contract.
In a series of eleven YES votes cast on April 23rd on state House versions of the General Fund budget, Hubbard actively sought to ensure his public relations client – American Pharmacy Cooperative Inc. – became the sole company eligible to provide Pharmacy Benefits Manager services to Alabama’s Medicaid agency.
Though he voted multiple times in favor of the legislation, Hubbard never publicly disclosed his financial ties to American Pharmacy Cooperative Inc. (APCI), the company that stood to profit from Medicaid provisions of the budget. Nor did Hubbard declare a conflict of interest or abstain from taking official action on the bill, titled SB143.
While the details of Hubbard’s contract with APCI are unknown, Hubbard’s official actions favoring APCI appear to violate state ethics laws regarding conflicts of interest.
According to the Alabama Revised Ethics Code, “(A) conflict of interest involves any action, inaction, or decision by a public official or public employee in the discharge of his or her official duties which would materially affect his or her financial interest or those of his or her family members or any business with which he person is associated in a manner different from the manner it affects other members of the class to which he or she belongs.”
The provisions of the bill Hubbard voted on contained language that, if implemented, would have meant anywhere from $12 million to more than $20 million for his client, according to estimates of state finance experts.
State Ethics Commission Director James L. Sumner and American Pharmacy Cooperative Inc. CEO Tim Hamrick confirmed last week that Speaker Hubbard has an financial agreement with the company to promote “membership growth strategies” in 23 states around the country.
Hubbard’s repeated votes on the House versions of the 2014 General Fund budget came as the Gov. Bentley administration strongly objected to adding the pharmacy language which several officials said was designed to exclusively benefit APCI.
“Yeah, I understood that it would only benefit one particular group, based on the language that was put in there,” said state Rep. Steve Clouse, vice chairman of the House Ways and Means General Fund Committee, and sponsor of the House version of the General Fund budget bill.
State Health Officer Don Williamson had a similar understanding. “It was my understanding that there was only one company in Alabama that would meet that criteria.” Asked if that company was APCI, Williamson said, “Yes, sir, that was my understanding.”
The General Fund budget is typically complicated legislation, going through a number of variations before final passage. This year was no different.
SB143 was originally drafted by Sen. Arthur Orr, Republican chairman of the Senate Finance and Taxation General Fund Committee. The bill was introduced in February and finally passed out of the Senate with three amendments on March 12th. When state Senators sent the budget to the House, there was no language benefitting APCI. But by Feb. 23rd, the House had re-crafted the budget adding a section that would have forced the state into using a Pharmacy Benefits Manager to administer the Medicaid prescription drug purchased.
According to the bill:
“The Alabama Medicaid Agency, in order to implement a pharmacy benefit manager program, must seek a pharmacy benefit management organization or manager that will: (i) act in fiduciary capacity and perform its duties in accordance with standards of conduct applicable to a fiduciary, including the allocation of all drug manufacturer rebates, discounts, and incentives to the State General Fund; (ii) establish a maximum allowable cost list; and (iii) operate a group purchasing function with a purchasing base for generic drugs consisting of at least 30% of the retail pharmacies in Alabama.“
Those 23 words requiring the PBM have a purchasing base of 30 percent locked in Hubbard’s client, APCI, as it is the only company that fits the description, officials said.
Asked if Hubbard pushed for the PBM language to be added to the bill, Rep. Clouse said he did not recall. “You know we (Clouse and Hubbard) talk about a lot of things with the budget. I don’t remember in particular.” Clouse said he recalled Rep. Greg Wren suggested the passage benefiting APCI. Wren was “concerned about independent pharmacists and he wanted to add language in there… Greg wanted to put the language in there, so I told him to go ahead and write it up.”
Neither Hubbard or Wren responded to multiple phone messages and emails seeking comment for this story.
Calls were also made to G. Ferrell Patrick, APCI’s lobbyist in Montgomery. Patrick did not return the Alabama Political Reporter’s calls for comment.
Williamson, the state Health Officer, said he grew increasingly concerned that the PBM provisions limited the state’s ability to find an appropriate PBM. Indeed, the state’s options were limited to a single company – Hubbard’s client. Williamson, as the governor’s point-man on Medicaid worked until the last days of the session to find a compromise to the language inserted into the House budget.
Sen. Orr said that just days before the end of session, “This was one of the last things hanging out there that was not going to work for [Medicaid]. Williamson, got engaged and worked diligently for what I call compromise language…that would leave him with flexibility to issue a RFP [Request for Proposal] for PBMs effective next year. Williamson categorized the negotiations as tough and confrontational.
The Governor has since signed and executive order establishing the Alabama Medicaid Pharmacy Commission. The commission is tasked with comparing Alabama’s handling of Medicaid pharmaceutical benefits with programs in other states and will study options to reduce Alabama Medicaid’s pharmacy costs while still maintaining a quality Medicaid program, according to the order.
Williamson said that Medicaid needed to understand how each PBM worked so that they could negotiate what would be in the best interest of Alabama.
According to Dennis L. Tumminia, Senior Employee Benefits Consultant Edgewood Partners Insurance Center, “PBM’s typically employ a “balloon strategy” in their price negotiations – if you squeeze one element of the pricing matrix another element inevitably “pops” out somewhere else. Ask for a lower administrative fee, for example, and the dispensing fee becomes non-negotiable. Ask for a lower ingredient cost discount and rebates begin to disappear.”
Tumminia says that it is important for those seeking contract a PBM understand that, “PBM’s utilize a “per script” net revenue model that combines all of the revenue elements. So, if you are going to be successful in your negotiations, you need to understand what those specific revenue elements are. Some PBM revenue elements, like administrative fees, are highly visible. Others, like rebates, are shrouded in confidentiality agreements.”
Williamson said that the language inserted in the House — language favoring Hubbard’s client—was the biggest problem with the bill. It “was the issue we had concerns about, if there were others [problems with the bill] I didn’t know about them.”
Opinion | Inside the Statehouse: Buck’s pocket
You voted Tuesday on a crowded ballot.
Historically, in Alabama we have voted more heavily in our Governor’s race year than in a presidential year. That is probably because we were more interested in the local sheriff and probate judge’s races, which run in a gubernatorial year, than who is president. The old adage, “all politics is local,” definitely applies here in Alabama.
We not only have a governor’s race this year, we have all secondary statewide offices with a good many of them open including Lt. Governor, Attorney General, State Treasurer, Auditor, and two seats on the Public Service Commission. We have five seats on the State Supreme Court, one being Chief Justice. All 140 seats in the Legislature are up for a four-year term. These 35 state Senate seats and 105 House contests are where most of the special interest PAC money will go. And, yes, we have 67 sheriffs and 68 probate judges as well as a lot of circuit judgeships on the ballot.
You may think the campaigning is over. However, some of the above races have resulted in a runoff which will be held on July 17. So get ready, we have six more weeks of campaigning before all the horses are settled on for the sprint in November.
We have a lot of folks headed to Buck’s Pocket. Last year after the open Senate seat contest, a young TV reporter for one of the stations I do commentary for asked me about Roy Moore and his loss. I told her ole Moore had gotten on his horse, Sassy, and ridden off into the sunset to Buck’s Pocket, which by the way wasn’t a long ride from his home in Gallant in Etowah County. She looked at me with a puzzled look. Probably a lot of you are also wondering what I’m talking about when I refer to Buck’s Pocket.
For decades, losing political candidates in Alabama have been exiled to Buck’s Pocket. It is uncertain when or how the colloquialism began, but political insiders have used this terminology for at least 60 years. Alabama author, Winston Groom, wrote a colorful allegorical novel about Alabama politics and he referred to a defeated gubernatorial candidate having to go to Buck’s Pocket. Most observers credit Big Jim Folsom with creating the term. He would refer to the pilgrimage and ultimate arrival of his opponents to the political purgatory reserved for losing gubernatorial candidates.
This brings me to another contention surrounding Buck’s Pocket. Many argue that Buck’s Pocket is reserved for losing candidates in the governor’s race. Others say Buck’s Pocket is the proverbial graveyard for all losing candidates in Alabama.
One thing that all insiders agree on is that once you are sent to Buck’s pocket you eat poke salad for every meal. Groom also suggested that you were relegated to this mythical rural resting place forever. However, history has proven that a good many defeated Alabama politicians have risen from the grave and left Buck’s Pocket to live another day. Roy Moore may be a good example. He has risen from the grave before. He is only 70, and he may grow weary of eating poke sallet.
Most folks don’t know that there really is a Buck’s Pocket. Big Jim would campaign extensively in rural North Alabama often one on one on county roads. One day while stumping in the remote Sand Mountain area of DeKalb County he wound up in an area referred to as Buck’s Pocket. It was a beautiful and pristine area, but it was sure enough back in the woods. Big Jim who loved the country and loved country folks was said to say that, “I love the country but I sure wouldn’t want to be sent to Buck’s Pocket to live.”
Buck’s pocket is now not a mythical place. If you are traveling up the interstate past Gadsden, on the way to Chattanooga, you will see it. There is a Buck’s Pocket State Park in DeKalb County, thanks to Big Jim.
So the next time you hear an old timer refer to a defeated candidate as going to Buck’s Pocket, you will know what they are talking about.
See you next week.
Steve Flowers is Alabama’s leading political columnist. His weekly column appears in over 60 Alabama newspapers. He served 16 years in the state legislature. Steve may be reached at www.steveflowers.us.
Hubbard’s Lee County Trial Finally Ends in Silence
By Bill Britt
Alabama Political Reporter
MONTGOMERY—The post-trial appeal of convicted felon and former Speaker of the House, Mike Hubbard, finally expired on September 8, in silence, according to the Attorney General’s office calculations.
For almost four years, Hubbard, aided by his criminal lawyers, used the State House, the Governor’s Office and some within the Attorney General’s office to deny, deflect and delay justice. Hubbard stormed the State House presiding over an orgy of greed and corruption. Those days are over for Hubbard and so is any appeal before the circuit court of Lee County.
Under Rule 24.4 of the Alabama Rules of Criminal Procedure, Hubbard’s motion for a new trial, dismissal and/or an investigation by the Lee County Sheriff were denied by operation of law because Judge Jacob Walker, III, did nothing.
Under the Rules of Criminal Procedure, “no motion for a new trial or motion… shall remain pending in the trial court for more than sixty days after the pronouncement of sentence.” Hubbard’s sentencing July 8, on 12 felony counts of public corruption, means as of September 8, the calendar has run out for him, with Judge Walker deciding not to rule at all.
Under Rule 24.4: Denial by operation of law. “A failure by the trial court to rule on such a motion within the sixty (60) days allowed by this section shall constitute a denial of the motion as of the sixtieth day.”
At his post-trial hearing, Hubbard’s attorneys made their last stand in Lee County, with Bill Baxley arguing that his client was blindsided, bushwhacked and bamboozled, to no avail.
The Lee County case of the State of Alabama versus Michael G. Hubbard is over. He has a right to appeal his conviction to the Alabama Court of Criminal Appeals within 42 days, which expires on October 20.
Hubbard’s past efforts show he will seek every avenue available to delay his incarceration.
Every previous motion that Hubbard has set before the Court of Criminal Appeals, was denied without opinion. Many believe this same fate awaits Hubbard’s next appeal before the high court.
Hubbard’s days of freedom are rapidly coming to an end. His appeal was silently denied and most didn’t even notice. He is rapidly becoming yesterday’s news.
Hubbard’s Post-Trial Snoozer
By Bill Britt
Alabama Political Reporter
OPELIKA—While searching for any thread of an argument that might lead to a new trial for convicted felon Mike Hubbard—once the most powerful politico in the state—attorney Bill Baxley whined, fretted and accused state prosecutors of blindsiding, bushwhacking and bamboozling his client.
Having written about Hubbard’s misdeeds since late 2012, the courtroom drama ending with his conviction makes Baxley’s latest attempt at the September 2 hearing feel like Hubbard trial 2.0 ad nauseam. Only Baxley’s fantastical leaps of legal logic and strained linguistic gymnastics kept the proceedings remotely interesting. Baxley argued several points, only winning on one issue with Judge Walker’s ruling that Hubbard would not be required to pay $1.125 million in restitution, as the prosecution asked.
Before the hearing began, Hubbard’s criminal defense team filed a motion to unseal all court documents related to the case, except one document. Baxley indicated that Judge Jacob Walker knew “the one” he referred too. After some legal wrangling by the prosecution and with Judge Walker, the defense was directed to construct a list of documents to be unsealed. Judge Walker’s decision was followed by Baxley huffing and puffing. Finally, he made reference to testimony given by Professor Bennett L. Gershman a “so-called” expert in prosecutorial misconduct. Hubbard filed to have Gershman’s testimony unsealed in 2015, to no avail.
Testimony given by former State Ethics Directors James “Jim” Sumner is central to Hubbard’s motion to dismiss or grant a new trial, neither of which is likely to occur. But, Baxley and company need to earn the additional $50,000 plus Hubbard recently raised from “friends.” Baxley argued it was improper for the State to present “expert” testimony about what various portions of the ethics statute mean, and whether certain phrases or clauses within those statutes would or would not encompass certain situations or events. The court seemed unmoved by Baxley’s logic since Judge Walker certified Sumner as an expert.
During the two-hour hearing, Baxley’s delaying tactics appeared to try Judge Walker’s patience, especially when the defense claimed they were unprepared to hear testimony concerning jury misconduct. Judge Walker said he set aside other cases to hear Hubbard’s claims of jury misconduct, a surprising claim that surfaced quickly after Hubbard’s conviction.
Hubbard’s criminal defense team citing an affidavit from a panel member filed a motion just days after Hubbard’s conviction calling for an investigation into jury misconduct by an impartial third party. In searching for a neutral investigator, Baxley determined Hubbard’s friend Lee County Sheriff Jay Jones was the best choice.
From the bench, Judge Walker informed Baxley that there is no legal basis for an outside investigation, and that testimony would be taken before his court to settle the matter. Baxley claimed the defense was once again unprepared for such at the hearing, and the juror who reported the alleged misconduct was unavailable.
Judge Walker questioned the two bailiffs and the court administrators who oversaw Hubbard’s trial. Bailiff Bobby Bond testified that he was instructed by court administrator Patricia Campbell, to caution a juror who reportedly was talking under her breath at the beginning of Hubbard’s trial. Bond said he issued the warning, but the juror denied the allegations and no further complaints were noted. Both Bailiffs who rotated sitting next to the jury box during the proceedings testified they never heard chatter from any jurors.
Under oath, Campbell confirmed she had received the complaint and reported it to Judge Walker, who ordered her to address the situation through the bailiffs. Baxley asked Campbell what was said. She remembered the accusing juror of claiming a fellow juror said, “Yes, now the truth comes out.”
Defense co-council Lance Bell rose to claim that Hubbard had not received a fair trial an assertion soon rebutted by the prosecution.
He, along with Baxley said the jury was not impartial, and Hubbard should receive, at least, a new trial. Arguing for the prosecution, Assistant Attorney General Katie Langer cited case law and explained the split verdict showed they were, in fact, impartial because otherwise, the trial would have ended with a hung jury.
As Judge Walker pointed out several times, the clock is ticking with very few days remaining before the 60 day deadline brings all proceeding before his court to a close. The trial judge may rule on these motion or simply wait out the clock.
Photo Credit: Albert Cesare/Montgomery Advertiser/Pool
Attorney General Reacts to Hubbard Loyalist’s Plans for Ethics Reform
By Bill Britt
Alabama Political Reporter
MONTGOMERY—Alabama House Ethics Committee Chairman, Mike Ball (R-Madison), announced his plans (yesterday) to form a commission to review the state’s ethics laws. Ball, a staunch defender of convicted felon and former House Speaker, Mike Hubbard, told WHNT-TV in Huntsville that his committee would “review the State’s Ethics laws and recommend improvements in time for the opening of the Alabama Legislature next year.”
However, just hours after APR published its story on Ball’s plan, Attorney General Luther Strange, sent his comments. “I am strongly opposed to Rep. Mike Ball’s idea of a commission to review Alabama’s ethics law. The whole point of such a commission would be to undermine the law,” said Strange. “Alabamians want our ethics laws enforced, not gutted.”
Ball also said he wanted an “open and honest” process, stating, “Our best chance for success is for it to be carefully looked at, out in the open.” Ball claims he is determined to stop three ethics bills from coming to the House because he didn’t want them “lost in the mix, however, there is a reason to believe other forces are at work, especially given Speaker McCutcheon’s promise of principled leadership.”
It would be difficult to fathom a Hubbard loyalist overseeing a commission to amend laws that landed his former boss in prison.
The day after Hubbard’s indictment, Ball stood by his side at a pep rally proclaiming his boss’s innocence while sporting an “I Like Mike” sticker on his lapel.
Ball regularly appeared on talk radio accusing State prosecutors of conducting a political witch hunt to ensnare Hubbard.
In April 2015, Ball testified in a pre-trial hearing that Hubbard’s arrest was politically motivated. Under oath, Ball said the ethics laws needed amending to avoid prosecutions like Hubbard’s in the future.
Presiding Circuit Court Judge Jacob Walker, III allowed Ball to testify, even though he said Ball’s testimony was not relevant to Hubbard’s indictments. Judge Walker ruled that accusations against Special Division’s Chief Matt Hart were not only irrelevant, but unfounded.
Ball is one of the remaining Hubbard loyalists at the State House.