By Bill Britt
Alabama Political Reporter
MONTGOMERY—In 2010, while serving as the Chairman of the ALGOP, Mike Hubbard, R-Auburn, directed campaign contributions under his control to his personal business interests. Using a series of political action committees (PACs), Hubbard directed money to candidates and vendors who then used some or all the funds to purchase goods and services from Hubbard’s business interests.
Can we classify Hubbard’s actions as embezzlement?
Embezzlement is a very specific type of property theft. It generally takes place when a person is entrusted to manage someone else’s money or property, “For the purposes of managing, monitoring, and/or using the assets for the owner’s best interests, but then covertly misappropriates the assets for his/her own personal gain and use,” according to findlaw.com.
In 2010, Hubbard directed almost $700,000 to Republican candidates, who in turn redirected part of the funds back to Hubbard business interests.
In 2010, Hubbard also instructed John Ross, his executive director at the ALGOP, to enter into a sub-contacting agreement with Majority Strategies, that directed around $800,000 from the ALGOP back to a Hubbard business interest.
During the 2010 election cycle, Hubbard oversaw a scheme in which over a million dollars of other people’s money was funneled through a third-party, back into his own business interests.
According to findlaw.com, there are four factors that must be present to support a charge of embezzlement:
• There must be a fiduciary relationship between the two parties; that is, there must be a reliance by one party on the other
• The defendant must have acquired the property through the relationship (rather than in some other manner)
• The defendant must have taken ownership of the property or transferred the property to someone else
• The defendant’s actions were intentional.
As Chairman of the ALGOP and Director of Network PAC and others, Hubbard was given charge of campaign contributions over which he had a fiduciary responsibility. He then directed those funds to third-parties, who then gave the money to a Hubbard business interest.
Several campaign consultants have come forward over the last several months to say that Hubbard either told them directly, or strongly suggested through underlings, that the campaign money they were receiving was to be spent with Hubbard’s business interests.
Of the over $700,000 Hubbard gave to candidates in 2010, around $699,476.82 came back to Hubbard’s business interests.
Hubbard gave a total of $322,405.06 to House races in 2010. Of that amount, $177,945.51 or 55 percent was spent with his business interests.
Hubbard’s wholly-owned media production company, Network Creative Solutions, received $159,327.87, while Craftmaster Printers,Inc., a company in which Hubbard in a majority partner, received $18,617.64.
As for the scheme to direct money from the ALGOP to Majority Strategies and then back to Hubbard business interests: according to an internal audit the ALGOP under Hubbard’s leadership, the Party incurred direct printing expenses from Craftmasters Printing, in the amount of $83,524 in 2010. Total indirect printing, postage, mail service, and shipping costs paid to Majority Strategies (non-related party) and remitted to Craftmasters Printing was $725,262.
There is ample reason to believe that the Lee County Special Grand Jury looking into public corruption is aware of Hubbard’s scheme. It is also reasonable to conclude that most or all the candidates who received funds from Hubbard and then spent funds with his business interests have been called before the Grand Jury to give account. While there is no evidence, so far, that what Hubbard did was a crime under which he will be charged, it is interesting to note how closely Hubbard’s actions mirror those which constitute embezzlement.
Network Creative Solutions $159,327.87
Total given to candidates $322,405.06
Total paid to Hubbard Companies $177,945.51
Percentage 55 percent
Dwayne Bridges received $8,000, spent 6190.11
Terri Collins received $18,500, spent $6,429.07
Lynn Greer received $19,505.06, spent $13,141.25
Ed Henry received $7,500, spent $832
Wayne Johnson received $30,500, spent $24,567.12
Barry Moore received $54,500, spent $11,017
James Patterson received $28,200, spent $20,000
Kerry Rich received $19,000, spent $9,748.90
Mark Tuggle received $49,500, spent $37,056
Dan Williams received $16,000, spent $10,908
Paul Lee received $28,000, spent $1,823.36
Network Creative Solutions $462,299.66
Total given to candidates $346,700
Total paid to Hubbard Companies $521,531.31
Percentage 105 percent
Gerald Allen received $38,500, spent $5,469.55
Bill Holtzclaw received $52,500, spent $2,124
Greg Reed received $5,000, spent $3,045.60
While fourteen candidates spent varying percentages of what they received from Hubbard-controlled PACs, only two House members and two Senate members spent monies in excess of contributions from these PACs.
Richard Baughn received $10,000, spent $26,165
KL Brown received $1,000, spent $10,337.70
Tom Whatley received $122,000, spent $257,798.48
Bryan Taylor received $128,700, spent $253,093.68