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Hubbard Lobbying Governor Tied to $78 Million Dollar RSA Loan

By Bill Britt
Alabama Political Reporter

MONTGOMERY—In Count 13 of the State’s felony criminal indictments against Speaker of the House Mike Hubbard, R-Auburn, he is accused of representing Robert Abrams d/b/a CV Holdings, LLC., before Gov. Bentley.

State Ethics Law, Section 36-25-1.5 prohibits a legislator from representing any person, firm, corporation or other business entity before any executive department or agency.

In a report from al.com’s Chuck Dean, “Bentley, under oath, testified as to what Hubbard was seeking on behalf of the company. The questioning by prosecutors took place in Bentley’s office. At no time was Bentley a target of the investigation, nor did he seek to avoid testifying.”

(See article here.)

What is known from the indictments is that Hubbard lobbied Gov. Bentley on behalf of Robert Abrams d/b/a CV Holdings, LLC. Bentley’s testimony conferred to the State’s prosecutors that Hubbard in fact lobbied and exactly what he wanted the governor to do for his client.

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The law as passed by the Republican super majority under Hubbard’s leadership, makes it a felony offense for a legislator to lobby the governor on behalf of a business client. 

Count 11 reveals that Hubbard, through his company Auburn Network, LLC., received money from Robert Abrams d/b/a CV Holdings, LLC.

These actions fall under the prohibited category of using ones office for personal gain, which is an offense punishable with fines and imprisonment. 

It was not publicly known before Hubbard’s indictments that he was working as a consultant for Robert Abrams d/b/a CV Holdings, LLC., it was known that Abrams had contributed liberally to former Gov. Bob Riley 2014PAC and that he also had business before the State, as well as the Retirement Systems of Alabama, (RSA).

(See article here.)

Abrams is the CEO of CV Holdings, which was founded in Amsterdam, New York in 2002.

CV Holdings, LLC., owns several other companies including Capitol Cups, also located in Auburn. Capitol Cups’ website states that the company “is a leading supplier of insulated and non-insulated travel cups, tumblers, and children’s spill-proof cups for the food, retail, sports and fundraising industries.”

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Around 2010, Abrams began to seek investments in SiO2 which develops and manufactures …silicon-oxide coated containers, utilizing… plasma glass coating technology,” for medical products.

CV Holdings, LLC., needed $90 million to build the SiO2 research and manufacturing facility in Auburn and in 2012, they received $78 Million in a loan from RSA to realize that plan.

In March 2012, Gov. Bentley, Speaker Mike Hubbard, Commerce Secretary Greg Canfield, as well as RSA chief Dr. Bronner and others announced the development of the SiO2 facility and a reported 300 jobs that would be created as a result of the project.

(See article here.)

At the time, Bentley said about SiO2:  “An essential part of creating new jobs is encouraging our existing companies to further their investments in this state…SiO2 Medical Products is creating new opportunities in the form of additional well-paying jobs, and we appreciate their continued commitment to Alabama…and we look forward to even more announcements from SiO2 in the future.”

Speaker Hubbard spoke of the investment as well, saying, “If the recession has taught us anything, it is that we must keep innovating and keep finding ways to create jobs. I’m proud of the teamwork it took to make this project a reality and to bring so many high-tech, high-paying jobs to Lee County.”

Hubbard never revealed in his Statement of Economic Interest or in any other public way, that he represented CV Holdings, LLC., or any related business.

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Hubbard and his allies have wanted the public to believe that he was just a business man trying to make a living, but at the press conference he was speaking as Speaker of the House and representative from his House District.

Even Dr. Bronner at the announcement of the companies expansion acknowledged Hubbard as being in his official capacity: “We are very excited about the opportunity to partner with SiO2 Medical Products’ Chairman Bobby Abrams, Auburn Mayor Bill Ham, Auburn Economic Development Director Phillip Dunlap, Speaker of the House Mike Hubbard, and Governor Robert Bentley to expand the plant in Auburn.”

Bronner said that the RSA was, “excited to partner with…Speaker of the House Mike Hubbard… to expand the plant in Auburn.”

When the Alabama Political Reporter spoke with Abrams in September, he expressed a close, working relationship with Auburn Mayor Bill Ham. But, when asked about his relationship with Hubbard, he did not reply directly, only saying he worked with all those in business development in Auburn.

When asked if he was aware of the Lee County Grand Jury investigation into Hubbard, he said he was unaware of the investigation. 

The conversation with Abrams occurred before Hubbard’s relationship between he and Abrams was made public by the indictments. 

Several past and present members of the RSA board said they were unaware of the $78 million loan that financed the expansion of SiO2. They expressed shock and concern over the enormity of the loan against the collateral. According to Dr. Bronner, the $78 million dollar loan was secured by “37 patents and other intellectual property, covering the company’s developments, a pledge of stock, and all other assets of the company. The interest rate is 8% and the company will pay the RSA a success fee upon maturity of the loan. The success fee will be 22% of the average daily outstanding balance of the loan for each year the loan is outstanding.”

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Abrams also contributed $33,333.00 to former Gov. Bob Riley’s 2014PAC, and other $66,666.32 was funneled into the Riley PAC by others in $13,333.33 increments, except for one transaction of $13,334.00.

How much Hubbard was paid to lobby the governor is unknown at this time. 

Hubbard’s contract with Southeast Alabama Gas District was for $12,000 a month plus expenses, which included a trip to the Paris Air Show with his wife.

 

Bill Britt
Written By

Bill Britt is editor-in-chief at the Alabama Political Reporter and host of The Voice of Alabama Politics. You can email him at [email protected] or follow him on Twitter.

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