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Stealing the Statehouse

Prosecution Response to Hubbard Motion Suggests Long List of Potential Witnesses

Brandon Moseley

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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.”

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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.”

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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.

 

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