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Stealing the Statehouse

Hubbard Ignored Warnings

 

By Bill Britt
Alabama Political Reporter

MONTGOMERY—On January 27, 2012, a letter from the Alabama Ethic’s Commission cautioned Speaker Mike Hubbard not to use the mantle of his office with regards to his contract with Southeast Alabama Gas District (SEAGD). But, Hubbard ignored their warning on this as well as other “consulting” contracts, according to emails released last Friday by State prosecutors.

In a letter prepared by Hugh R. Evans III, the Commission’s general counsel states that Hubbard was instructed:

“The general prohibition continues to apply, in that the Speaker may not use his position or mantle of his office to assist him in obtaining consulting opportunities or providing benefits to his consulting business or his clients. Otherwise other than this we see no problems.”

As reported by this publication in 2013, Hubbard received a $12,000/month contract with the utility company. In a March 5, 2013 press release, SEGAD’s incoming Director of Economic Development and Governmental Affairs Wiley Lott stated, “The Speaker [Hubbard] and Mr. Camp have served this company well and I will draw upon their experience and knowledge as we seek new opportunities for economic growth in the communities we serve.”

Emails between Hubbard, former Gov. Bob Riley’s and others, show that Hubbard repeatedly referred to his speaker’s position while soliciting business opportunities for his various high paying clients.

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Court filings show that Hubbard, through the assistance of Riley and others, was able to obtain a lucrative contract with not only SEAGD but also American Pharmacy Cooperative, Inc. (APCI), Edgenuity/E2020, and Robert Abrams/DBA CV Holdings, LLC.

All of these companies were contracted with Auburn Network, Inc. In a contract proposal with IMG Auburn Network, Hubbard requests that the contract be made with Auburn Network instead of him personally, so he “would not have to list IMG on my Alabama Ethics Financial Disclosure Form as a source of income.”

During the period Hubbard held contracts with SEAGD, they ran continuing advertisement on AL.COM. Also, on May 30, 2013, Tim Hamrick, CEO of APCI, was given editorial space on AL.COM to promote the company’s commitment to Medicaid. 

SEAGD paid Hubbard a total amount of $208,848.88 to work as an “economic development consultant” from March 2012 to August 2013.

As part of his agreement with SEAGD, Hubbard was to “submit monthly written reports of his activities in form and substance acceptable to SEAGD on or about the 15th day of each month, but not later than the third Tuesday of each month.”

In March 2013, this publication requested copies of those reports by SEAGD. Those requests were denied. However, in the State’s reply to Hubbard’s request for a more defined statement of his indictments, some of those monthly reports have been made public. These monthly reports reveal some of the activities took on SEAGD’s behalf.

On one occasion, Hubbard reported to SEAGD that he met with Commerce Secretary, Greg Canfield, 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.

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Hubbard also reported meetings he arranged or attended, in an official capacity, with Governor Robert Bentley, as work from which he sought compensation from SEAGD. For example, Hubbard reported meeting with Governor Bentley about the “Abbeville project” and Hubbard outlined to the Governor what the State would need to provide to “land the project.” In that same report, Hubbard informed SEAGD that the Governor would provide the necessary resources.

On another report to SEAGD, Hubbard states that he arranged a meeting for July 19, 2012, with Governor Bentley and others to discuss the relocation of a business from Miami to the Dothan Airport.

Hubbard also recruited an industrial refurbishing business, Commercial Jet, to relocate its business operations to the Southeast Alabama area.

Hubbard reported to SEAGD that on July 12, 2012, he had a meeting with Governor Bentley and his Chief of Staff, David Perry, to discuss the Commercial Jet project and the commitment the “State of Alabama would need to make as well as funding sources.”

In August 2012, Hubbard submitted a report to SEAGD describing his “coordinating” a second meeting with Governor Bentley regarding Commercial Jet on August 31, 2012. Hubbard further reported Governor Bentley, Representative Paul Lee, Representative Steve Clouse, Blaine Galliher, David Perry and local officials were present at that August meeting.

Hubbard continued to seek compensation from SEAGD for his duties as a public official regarding Commercial Jet in September 2012.

Hubbard reported to SEAGD for that month as follows: “The Commercial Jet project continues to move forward. I participated in a conference call with Governor Bentley, Greg Canfield and David Perry regarding the incentive package the State will offer. I continue to be a cheerleader for the project and point out the obvious economic and political benefits created by the successful recruitment of the company. I received a commitment that the State will provide the necessary incentives.”

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In October 2012, Hubbard reported to SEAGD that an executive from Hankook Tire, Mr. Kim, suggested that Hubbard travel to South Korea to visit with him. Hubbard explicitly noted the importance of his public office to Kim in his October 2012 activity report: “Mr. Kim believes that my role in government would mean a great deal and put Alabama at the top of the list if I were to visit.” Hubbard further reported that he had spoken with Secretary Canfield and ensured that “our area” is considered and “we are included in the mix”.

While in Paris, Hubbard also met with Mr. Tan Pheng Hock, the President of Singapore Technologies Engineering Ltd., an international aerospace company and the parent company of Mobile Aerospace. In his June 6, 2012 report, it appears that negotiations were in place to relocate the Mobile facility to Dothan where they would become a SEAGD client.

When Hubbard attended the Paris Air Show in June 2013, he wore a name tag that identified him as Speaker of the House, even though SEAGD paid for Hubbard to attend the Air Show. In an email from lobbyist Minda Riley Campbell to Hubbard, she attached a picture with the caption, “Here are the pictures I took of Mr. Speaker/Economic Development Superstar.”

In June of 2013, this publication revealed Hubbard’s financial arrangement with APCI.

Days later, an almost identical report was published by AL.COM, in which Hubbard and then House member Gerald Wren said that the contract was fully in compliance with ethic’s laws (Hubbard had long since stopped returning phone calls or emails from this publication).

Hubbard’s solicitation and receipt of $5,000 per month from principal APCI and his votes in favor of legislation that uniquely benefited his clients, is further detailed in the recent court filing and reveal heretofore unknown emails from Hubbard and others.

In September 2012, the Alabama Medicaid Agency began researching the financial benefits of implementing a pharmacy benefit manager program (PBM) for Medicaid. APCI, an Alabama-based pharmacy cooperative, represented the interests of independent pharmacies.

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APCI was not initially in favor of Medicaid’s idea of a commercial PBM. Accordingly, during 2012 and 2013, APCI engaged in efforts to influence the Alabama Legislature and affect legislation related to the implementation of a PBM by Medicaid. As part of these efforts, APCI employed lobbyist Ferrell Patrick to advocate for their interests in the PBM legislation.

At the same time that it was paying Patrick for his lobbying efforts, APCI was paying Hubbard $5,000 per month (approximately $95,000 total from August 2012 to December 2013) to work as a “consultant.”

While he was being paid by APCI to act as its consultant, Hubbard sent an email to Ferrell Patrick in which Hubbard agreed to send a letter to the Chair of the Alabama Medicaid Transition Task Force, Dr. Don Williamson, which would discourage Medicaid’s attempt to implement a PBM program.

Wren and Patrick had various meetings with members of the Alabama Legislature, from whom Wren sought support for the APCI drafted language. Relevant leadership of the Alabama House of Representatives, including Hubbard and his staff, attended some of those meetings. After attending such meetings, Hubbard endorsed the language.

The Hubbard-approved bill would result in APCI being the sole Medicaid PBM, and Hubbard directed his staff to add the language to Medicaid’s section of the General Fund Budget. In fact, Hubbard’s Chief Legal Adviser, Jason Isbell, emailed the APCI language to Norris Green, the head of the Legislative Fiscal Office, for inclusion in the General Fund Budget Bill. Shortly thereafter, the APCI-drafted language became a part of the House of Representatives substitute version of the General Fund Budget. The President and CEO of APCI, Tim Hamrick, then sent a letter to Hubbard thanking him for adding the APCI drafted language in the legislation.

In the letter from Tim Hamrick addressed to Hubbard’s State House Office dated April 19, 2013, the second paragraph reads, “Mr. Speaker, by adding the necessary language to the 2014 General Fund Budget, you placed a great deal of faith in trust in us. For that, our industry and the people we serve are forever grateful. I pledge to you that we will not let you down.”

By voting for this legislation, and participating in the legislative process to bring the bill to a vote in the House, Hubbard is accused of violated the ethics law’s prohibition against legislators voting for legislation on which they have a conflict of interest.

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Beginning in April 2012, Hubbard was paid $7,500.00 per month from another principal, Edgenuity, Inc. and/or E2020.

That company, like APCI, employed lobbyist Ferrell Patrick in Alabama and had active interests in State government. APCI and Edgenuity employed Patrick and Hubbard because Patrick assisted Hubbard in obtaining lucrative “consulting” contracts with Patrick’s clients. Indeed, Hubbard emailed Patrick after meeting with him and wrote he was “very excited about the opportunity to work with some of your clients and appreciate your assistance.”

In the same email, Hubbard told Patrick that he had helped one of Patrick’s other clients: “On another note, I met with [State Superintendent] Tommy Bice and talked to him about iTeach. He is reviewing the material and will get back with me on setting up a meeting. I will let you know.”

Edgenuity’s internal emails show that Hubbard served as the company’s “contact for House Speakers in all 50 states.”

Hubbard emailed the President of Edgenuity, Michael Humphrey, to report that he assisted Edgenuity’s lobbying efforts with the South Carolina Speaker of the House, Bobby Harrell. Hubbard emailed Humphrey and said: “I hope the contract in Charleston you were having issues with a while back is still going well. I know Speaker Harrell got involved in that one following my call to him.”

In October 2014, Harrell pled guilty to the illegal use of campaign funds. He was sentenced to six one-year prison terms for his guilty pleas on six misdemeanor counts of using campaign funds for personal use. He received a suspended sentence in exchange for his ongoing cooperation with federal prosecutors.

In October 2012, Hubbard received a $10,000.00 per month contract with Robert Abrams/ DBA CV Holdings, LLC.

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Counts 11 through 14 arise out of Hubbard’s contract with Bobby Abrams and his businesses operating under CV Holdings, LLC.

In September 2012, Hubbard solicited Abrams to have Abrams “hire Auburn Network, Inc., to help his plastic cup company with sales”, even though Hubbard candidly admitted that he did not “know anything about the cup business…”

State indictments disclose that Hubbard also used State equipment, facilities, time, human labor and other public property under his control for the private benefit of himself and his employer, Abrams.

For example, in July 2013, CV Holdings requested Hubbard’s assistance with a patent for which Abrams had applied. Hubbard directed his Chief of Staff, Josh Blades, to assist Abrams with speeding up the patent process. Hubbard also made calls on Abrams’ behalf to the patent office. With Blades assistance, Hubbard successfully helped Abrams obtain the patent, which was issued in August 2013. Hubbard then commented to Abrams that he “hope[ed] [his] calls and pushing help speed it up a bit.”

Hubbard is also accused of using his position for personal gain by assisting Abrams with lobbying the Alabama Department of Commerce and the Office of the Alabama Governor to build a “training center” for workers that could be hired by Abrams’ company. Hubbard personally spoke with Secretary Canfield and Governor Bentley on Abrams behalf on that issue. Hubbard also utilized another State employee under his control, Kristen Hull, to arrange meetings with Canfield regarding Abrams’ businesses.

The Ethic’s Commission advised Hubbard not to use his position or mantle of his office to assist him in obtaining consulting opportunities or providing benefits to his consulting business or his clients. They further informed him in person and in writing that he would need to recuse himself from any votes that might affect his clients stating, “As we stated yesterday, the only potential issue that we saw would be if something came before the Legislature that uniquely affected the Southeast Alabama Gas District differently than it affected all other utilities around the state of Alabama. Should this happen, we would expect that Speaker Hubbard would have plenty of notice in which to remove himself from discussions, votes, etc.”

The information made public at the request of Hubbard’s criminal defense attorney, J. Mark White, demonstrates that Hubbard did not listen one bit.

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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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