By Bill Britt
Alabama Political Reporter
OPELIKA—On day one of the State of Alabama vs. Michael G. Hubbard, there were no fireworks, but there was some insight into the days ahead, and a little more backstory on the 23 counts of felony corruption for which Hubbard stands accused.
Those notable in attendance included Rob Riley, Rep. Pebbling Warren, Rep. Barry Moore and attorney Baron Coleman.
The day began at 9:00, with the jury being seated at 10:00. The Attorney General’s Special Prosecution Division Chief, Matt Hart, gave opening statements for the Prosecution.
Two defense attorneys, who do not necessarily share a very high opinion of Hart, agreed that he had given a well-structured and compelling opening statement.
In contrast to his reputation as a forceful, even bullying prosecutor, Hart’s opening was a calm, friendly, detailed lesson on how State government works, what are ethics laws, why we have them, and a point-by-point narration of the charges against Hubbard.
Perhaps the only great surprise was when an attorney told the Alabama Political Reporter that Hubbard had a placed a plea deal on the table, prior to the begining of the trial. According to this attorney, who asked to remain anonymous, Hubbard has made an offer to the State, but they have not accepted at this time.
It is important to remember that a plea offer stays in effect until the jury comes back in with a verdict.
During Hart’s presentation, some jurors could be seen leaning forward, nodding yes, and taking notes. This was especially true when Hart detailed how Hubbard was paid to add language to the Medicaid budget for his client, American Pharmaceutical Cooperative Inc. (APCI). Some jurors seemed shocked when Hart revealed that Hubbard had raised $1.5 million for Craftmaster Printer, because he needed more than $300,000 to pay delinquent withholding taxes. They also paid close attention when he described the many schemes Hubbard used for his own financial gain.
Former Attorney General, Bill Baxley, presented the opening statements for the Defense. In his usual style, Baxley blustered, stammered and offered up a corn-pone-rich narrative. While calling the charges against Hubbard “gobbledy-goop” and “mumbo jumbo,” he offered up a narrative that Hubbard was a business man and a part-time politician, who needed to make money. He also said that other lawmakers had, in the past and present, held the same consulting jobs as Hubbard.
He spent a particularly long 30 minutes recounting Hubbard’s rise to power, starting as a cub scout who dreamed of being a radio announcer, to a humble family man who so loved Bob Riley, that he even named his first child after him.
Baxley spoke about how Hubbard met his wife, Susan, their courtship and marriage, Mrs. Hubbard’s education, and rise to full professorship at Auburn University.
During opening statements, Baxley painted a picture of how Hubbard’s hard work and talent had gone a long way to helping Hershal Walker and Bo Jackson win the Heisman Trophy. He said while those players had great talent, and had put for an enormous effort, it was Hubbard’s packaging that played an instrumental role in them winning the coveted trophy.
He concluded that he would prove beyond a reasonable doubt that Hubbard was innocent of all charges against him. Then he said, “Let this man and his family go back to living their life (lives) in peace.”
During the Baxley presentation, jurors did not seem to be as attentive, fewer notes were taken and they seemed tired. Of course, Hart’s statement was before lunch and most of Baxley’s was after.
Two witnesses were called: John Ross and Tim Howe, both from Swatek, Howe and Ross. Deputy Attorney General John Gibbs, who came out of retirement to fill out the Prosecution team, led the direct questioning of the witnesses. Ross was first in the jury box. He was questioned about his time as Executive Director for the Alabama Republican Party. Ross was confident and polite and answered questions without hesitation. The Prosecution questioned Ross about how the Party came to decide to use Hubbard’s business interests, Craftmaster Printers, Inc. and Network Creative Media. He answered that this was a strategy conceived by Hubbard to use economies of scale to reduce costs and maximize use of campaign dollars. Ross said that Hubbard had made the decision to use his companies, but that he agreed that it was a good idea.
One of the charges against Hubbard was for funneling money from the ALGOP through Florida-based Majority Strategies and back to his company, Craftmaster Printers. Ross said he was not initially aware of this arrangement, but later became aware because he was informed by Hubbard.
The State also questioned Ross about his company’s lobbying agreement with APCI during the 2013 Legislative Session. Ross revealed that he was the primary lobbyist from his firm, representing APCI in a grass roots campaign to persuade lawmakers to give the company a monopoly over the Medicaid Pharmacy Benefits Program. Hubbard has been accused of placing language into the Medicaid budget to benefit APCI which was paying him $10,000 per month for his “consulting” work. Ross stated that on the night in which a vote was to be cast to pass the General Fund Budget containing the favorable language, he was alerted by lobbyist Ferrell Patrick that Hubbard also had a lucrative contract with APCI. Ross’ company had been hired by Patrick to lobby for the pharmacy group without informing them of the potential conflict of interest. Ross said once he understood Hubbard’s relationship with APCI, he immediately alerted his partners and asked for a meeting with Hubbard’s Chief of Staff, Josh Blades. The meeting took place in the Speakers conference room on the fifth floor of the State House. In attendance were Ross, Blades and Howe. During the meeting, his concerns over Hubbard’s involvement with the company were expressed to Blades.
Next up, was Tim Howe, who testified about his companies, Howe Group and SRM Media’s, involvement in a scheme, whereby money to purchase advertising was paid to his company by the ALGOP and then immediately transferred to Hubbard’s company, Network Creative Media. Howe seemed to be both angry and hesitant about having to testify against his close colleague, Hubbard. He admitted under oath that while he received five percent of the money from ALGOP, he did no work. He said the money went directly from him to Hubbard. He intimated that Hubbard was angry when he learned that Howe was taking five percent, but later agreed that Howe should keep the small percentage for his troubles. Howe was also questioned about APCI. He said that when he and Ross met with Josh Blades, he said he told them that this could mean ethics problems for them all.
On cross examination of both men, Baxley asked about the quality of work performed by Craftmaster and Network Creative Media, and both agreed it was good.
He also suggested that Howe received his five percent because he was doing so much “other” work for the ALGOP. On redirect, Howe admitted to Prosecutor Gibbs that he did not receive that five percent for the other work he was doing for the ALGOP.
That concluded Day One of the Hubbard Trial.
Tomorrows witnesses are expected to be Barry Whatley, president of Craftmaster; Josh Blades, Hubbard’s former Chief of Staff; Jason Isbell, former Hubbard’s former legal advisor; Jeff Woodard, clerk of the House; and Representative Steve Clouse. Others may be called as well.
Tuberville calls for term limits, balanced budget and lobbying reform
Tuberville has also made a major media buy across the state to trumpet this message.
Senate candidate Tommy Tuberville’s campaign began emphasizing key structural reforms that the Republican nominee hopes to advance if elected to the U.S. Senate including congressional term limits, withholding lawmakers’ paychecks unless a balanced budget is passed and a ban on former officials becoming lobbyists.
“Only an outsider like me can help President Trump drain the Swamp, and any of the proposals outlined in this ad will begin the process of pulling the plug,” Tuberville said in a statement. “Doug Jones has had his chance, and he failed our state, so now it’s time to elect a senator who will work to fundamentally change the way that Washington operates.”
Tuberville has also made a major media buy across the state to trumpet this message.
“You know Washington politicians could learn a lot from the folks in small town Alabama, but Doug Jones … he’s too liberal to teach them,” Tuberville added.
Polls consistently show that term limits are popular with people across both political parties, but the U.S. Supreme Court has ruled that imposing term limits would be adding a qualification to be a member of Congress and that can only be done by constitutional amendment.
It is an unspoken truth that when Americans send someone to Congress they never come back. They either keep getting re-elected like Alabama’s own Sen. Richard Shelby, who is in his sixth term in the Senate after four terms in the U.S. House of Representatives. On the other hand, they may become lobbyists getting paid to influence their colleagues on behalf of corporations, foreign governments or some well funded non-government organization.
Tuberville said he would ban that practice.
A balanced budget amendment almost passed in the 1980s and again in the 1990s.
Since that failure, Congress has increasingly passed bigger and bigger budget deficits. The U.S. government borrowed more money during the eight years of President George W. Bush’s presidency than the government had borrowed in the first 224 years of the country combined.
President Barack Obama followed and the TARP program propped up the post-Great Recession economy. Rather than cutting the deficit, President Donald Trump invested billions in the military and a tax cut without cutting domestic spending. The 2020 coronavirus crisis has further grown the budget.
The government has borrowed trillions to prop up the economy and provide stimulus while investing billions into medical research and treating the virus victims. Congress is currently debating a fifth stimulus package that would add more to the deficit.
Both a balanced budget amendment and a term limits amendment would have to be ratified by the states if passed by Congress. Tuberville is challenging incumbent Sen. Doug Jones, D-Alabama.
House passes General Fund Budget
By Brandon Moseley
Alabama Political Reporter
The Alabama House of Representatives passed the state General Fund Budget on Tuesday.
The General Fund Budget for the 2019 fiscal year is Senate Bill 178. It is sponsored by Sen. Trip Pittman, R-Montrose. State Rep. Steve Clouse, R-Ozark, carried the budget on the House floor. Clouse chairs the House Ways and Means General Fund Committee.
Clouse said, “Last year we monetized the BP settlement money and held over $97 million to this year.”
Clouse said that the state is still trying to come up with a solution to the federal lawsuit over the state prisons. The Governor’s Office has made some progress after she took over from Gov. Robert Bentley. The supplemental we just passed added $30 million to prisons.
The budget adds $50 million to the Department of Corrections.
Clouse said that the budget increased the money for prisons by $55,680,000 and includes $4.8 million to buy the privately-owned prison facility in Perry County.
Clouse said that the budget raises funding for the judicial system and raises the appropriation for the Forensic Sciences to $11.7 million.
The House passed a committee substitute so the Senate is either going to have to concur with the changes made by the House or a conference committee will have to be appointed. Clouse told reporters that he hoped that it did not have to go to conference.
Clouse said that the budget had added $860,000 to hire more Juvenile Probation Officers. After talking to officials with the court system that was cut in half in the amendment. The amendment also includes some wording the arbiters in the court lawsuit think we need.
The state General Fund Budget, SB178, passed 98-1.
Both budgets have now passed the Alabama House of Representatives.
The 2019 fiscal year begins on Oct. 1, 2018.
In addition to the SGF, the House also passed a supplemental appropriation for the current 2018 budget year. SB175 is also sponsored by Pittman and was carried by Clouse on the floor of the House.
SB175 includes $30 million in additional 2018 money for the Department of Corrections. The Departmental Emergency Fund, the Examiners of Public Accounts, the Insurance Department and Forensic Sciences received additional money.
Clouse said, “We knew dealing with the federal lawsuit was going to be expensive. We are adding $80 million to the Department of Corrections.”
State Representative Johnny Mack Morrow, R-Red Bay, said that state Department of Forensics was cut from $14 million to $9 million. “Why are we adding money for DA and courts if we don’t have money for forensics to provide evidence? if there is any agency in law enforcement or the court system that should be funded it is Forensics.”
The supplemental 2018 appropriation passed 80 to 1.
The House also passed SB203. It was sponsored by Pittman and was carried in the House by State Rep. Ken Johnson, R-Moulton. It raises securities and registration fees for agents and investment advisors. It increases the filing fees for certain management investment companies. Johnson said that those fees had not been adjusted since 2009.
The House also passed SB176, which is an annual appropriation for the Coalition Against Domestic Violence. The bill requires that the agency have an operations plan, audited financial statement, and quarterly and end of year reports. SB176 is sponsored by Pittman and was carried on the House floor by State Rep. Elaine Beech, D-Chatham.
The House passed Senate Bill 185 which gives state employees a cost of living increase in the 2019 budget beginning on October 1. It was sponsored by Sen. Clyde Chambliss, R-Prattville and was being carried on the House floor by state Rep. Dimitri Polizos, R-Montgomery.
Polizos said that this was the first raise for non-education state employees in nine years. It is a 3 percent raise.
SB185 passed 101-0.
Senate Bill 215 gives retired state employees a one time bonus check. SB215 is sponsored by Senator Gerald Dial, R-Lineville, and was carried on the House floor by state Rep. Kerry Rich, R-Guntersville.
Rich said that retired employees will get a bonus $1 for every month that they worked for the state. For employees who retired with 25 years of service that will be a $300 one time bonus. A 20-year retiree would get $240 and a 35-year employee would get $420.
SB215 passed the House 87-0.
The House passed Senate Bill 231, which is the appropriation bill increase amount to the Emergency Forest Fire and Insect and Disease Fund. SB231 is sponsored by Sen. Steve Livingston, R-Scottsboro, and was carried on the House floor by state Rep. Kyle South, R-Fayette.
State Rep. Elaine Beech, D-Chathom, said, “Thank you for bringing this bill my district is full of trees and you never know when a forest fire will hit.
SB231 passed 87-2.
The state of Alabama is unique among the states in that most of the money is earmarked for specific purposes allowing the Legislature little year-to-year flexibility in moving funds around.
The SGF includes appropriations for the Alabama Medicaid Agency, the courts, the Alabama Law Enforcement Agency, the Alabama Department of Corrections, mental health, and most state agencies that are no education related. The Alabama Department of Transportation gets their funding mostly from state fuel taxes.
The Legislature also gives ALEA a portion of the gas taxes. K-12 education, the two year college system, and all the universities get their state support from the education trust fund (ETF) budget. There are also billions of dollars in revenue that are earmarked for a variety of purposes that does not show up in the SGF or ETF budgets.
Examples of that include the Public Service Commission, which collects utility taxes from the industries that it regulates. The PSC is supported entirely by its own revenue streams and contributes $13 million to the SGF. The Secretary of State’s Office is entirely funded by its corporate filing and other fees and gets no SGF appropriation.
Clouse warned reporters that part of the reason this budget had so much money was due to the BP oil spill settlement that provided money for the 2018 budget and $97 million for the 2019 budget. Clouse said they elected to make a $13 million repayment to the Alabama Trust fund that was not due until 2020 but that is all that was held over for 2020.
Clouse predicted that the Legislature will have to make some hard decisions about revenue in next year’s session.
Day Care bill delayed for second time on Senate floor, may be back Thursday
By Samuel Mattison
Alabama Political Reporter
The day care bill, which would license certain day care centers in Alabama, was once again delayed on the state Senate floor after one lawmaker requested more information.
Its brief appearance Tuesday ended with state Sen. Gerald Dial, R-Lineville, saying a compromise had not yet been worked out with the bill’s detractors.
Alabama’s Senate has been hesitant to act on the legislation because of complaints of state Sen. Shay Shelnutt, R-Trussville, who has been an opponent of the bill since its introduction last year. The bill’s delay on Tuesday marks the second time its been taken off the Senate’s agenda.
The bill has had a rocky time in this year’s session, but the bill’s sponsor state Rep. Pebblin Warren, D-Tuskegee, said she is still confident about its passage out of the Legislature.
Warren, D-Tuskegee, filed the bill this session with the support of influential lawmakers including Gov. Kay Ivey, who told reporters last year that she though all day cares should be licensed.
Mainly sparked by the death of 5-year-old boy in the care of a unlicensed day care worker, the bill had great momentum coming into this year’ session.
Despite the growing support from lawmakers, Religious groups had concerns that the bill would increase state-sponsored reach into religious day cares in churches and non-profit groups.
Spearheading the dissenters was Alabama Citizens Action Program, a conservative religious-based PAC.
Warren, proponents, and ALCAP announced a compromise to the bill while it was still in the Alabama House.
Announced by ALCAP originally, the new bill was a weaker version in that it did not require that all day cares in the state be regulated. Instead, religious-based day cares would only need to be registered if they received federal funds. At a Senate committee meeting in February, Warren said a similar requirement was about to come from federal law in Congress.
The bill moved through the House in a overwhelming vote in favor of the proposal and passed unanimously out of a Senate committee a few weeks ago.
Warren, speaking to reporters after its passage from the House, said she was unsure if the bill would encounter resistance in the upper chamber.
It was the Senate that killed the daycare bill last year amid a cramped last day where senators took the bill off the floor. The bill may face similar complications this year, as lawmakers seem to be preparing to adjourn within a few weeks.
Fantasy sports bill fails on Senate floor
By Samuel Mattison
Alabama Political Reporter
Would-be Fantasy Sports players in Alabama will have to wait to legally play in the state following a Senate vote on Tuesday.
The Alabama Senate decisively killed a bill to exempt fantasy sports from the state’s prohibition on gambling.
Not even entertaining a debate on the Senate floor, the proposal was killed during a vote for the Budget Isolation Resolution, which is usually a formality vote preluding a debate.
Fantasy sports are contests where participants select players from real teams to compete on fantasy teams using the real-world players’ stats.
Since 2016, the practice has been illegal in Alabama following a legal decision by the Attorney General’s Office that categorized it as gambling.
The bill’s sponsor, state Sen. Paul Sanford, R-Huntsville, predicted the bill’s failure during a committee meeting two weeks ago, where the bill passed unanimously.
- Sen. Paul Sanford speaks to reporters after a Senate Committee meeting on Feb. 28, 2018. (Samuel Mattison/APR)
Speaking to reporter’s after the committee meeting, Sanford said the decision to file the bill was mainly a philosophical belief that the practice shouldn’t be illegal.
Sanford, a fantasy sports player before its ban, said that fantasy sports are a way to bring people closer together and not a means to win money. The Huntsville senator is not seeking re-election.
The bill’s failure in the Senate follows its trajectory last year too. A similar version of the bill, also sponsored by Sanford, failed in the Senate during the final days of the 2017 Legislative Session.
Since Sanford is retiring, it is unclear if the bill will even come back next session, or if it will even have a Senate sponsor.