By Bill Britt
Alabama Political Reporter
OPELIKA—”A bad day for the defense” is how one prominent defense attorney described Day Two of the Mike Hubbard felony trial.
Hubbard’s former chief of staff, Josh Blades, was the State’s star witness on this second day of testimony. Blades revealed Hubbard’s actions regarding the adding of 23 words into the Medicaid budget, to give his lobbying client, American Pharmacy Cooperative, Inc. (APCI), a monopoly over a proposed Pharmacy Benefits Management (PBM) program.
Hubbard’s scheme would have netted his client upwards of $20 million per year from the Medicaid benefits.
Blades also dropped a bombshell when he revealed, that he believed Hubbard was being paid lavishly for helping CV Holdings’ CEO Bobby Abrams. While Blades said that his former employer was the best boss he’d ever had, he still forthrightly and without hesitation, provided damning testimony for around two hours, under direct questioning by Deputy Attorney General Michael Duffy.
During the 2013 Regular Legislative Session, an idea was floated by Department of Health Chief, Don Williamson, that a potential way to save money in the Medicaid budget was to contract the services of a PBM. As John Ross testified on the first day of trial, his lobbying firm had been hired to stir discontent among small pharmacies, to counter a plan that Williamson had put forward to use one of the national brand named PBMs, such as Walgreen, CVS or Walmart.
Lobbyist Ferrell Patrick hired Ross’ firm, and it was Patrick who was driving new legislation that would favor APCI. As Blades and others testified, they had no knowledge that Hubbard held $10,000 a month with the pharma group. Blades said, the first time he learned of Hubbard’s lucrative agreement was when Ross alerted him to the fact, while the bill was on the floor of the House.
Blades, in his testimony, made it clear that he was worried about the legal implications should Hubbard vote to pass the legislation favorable to his client. He said that his concern was so great, that he actually went into the House Chambers and called Hubbard off of the Floor to talk to him about the situation. When Blades and Ross confronted Hubbard, he admitted that he had a contract with APCI, but assured them it was only to do lobbying outside the State of Alabama.
Blades said, because of the language placed in the legislation that was about the pass, he cautioned the Speaker not to vote for it. Hubbard said that he had to vote for the budget because if he did not, it would raise too many red flags. Hubbard returned to his dais. Blades followed and stood next to him as the vote was about to occur, still urging him to not vote or vote “abstain.” When asked what button did Hubbard push, Blades said he pushed the green button registering a “yes” vote.
Blades said later that evening, he was so distraught that he went to see his friend Phillip Bryan, who serves as chief of staff for President Pro Tem Del Marsh, to discuss the matter. He said that he told Bryan he was upset because he felt he may have taken part in an illegal activity, and that the Speaker might be in trouble.
On cross examination, Bill Baxley once again tried to change the subject, saying that the language placed in the Medicaid budget was just a few small lines in a huge document containing billions of dollars.
He also asked Blades if he was one of the highest paid employees on the legislative staff. Blades said, “Yes.” Baxley then said, “But you kept your comfortable, high-paying job after all of this?”
Blades also gave testimony about another of Hubbard clients, CV Holdings. The company owns several manufacturing concerns in Auburn, and has generated multiple patented technologies over the past 30 plus years. In 2013, the company was having difficulty getting a patent approval through the US Patent Office. Hubbard was asked if he could speed up the process, and he tasked Blades with getting making it happen.
Through friends and acquaintances in Mississippi, Blades was able to make a connection with the Patent Office in DC, and began the process of persuading the Patent Office with moving the process forward. Under oath, Blades said he did not know that Hubbard had a $10,000 contract with Abrams companies. He thought this was an attempt to help a constituent in Hubbard’s district.
Blades admitted that Hubbard was not pleased with his slow progress, which caused him to ask why this was so important. On the stand, he then paused, and said, “The Speaker said, ‘I have a hundred thousand reasons to care.’” When asked did he think Hubbard was referring money he said, “Yes.”
He confessed that the statement worried him, and when the Speaker asked about the patent progress again, he told him he thought he had spent enough administrative time on it, and that he thought it best for Hubbard to handle it moving forward, which he did.
The last witness of the day was Jason Isbell, former chief legislative legal council, who reported directly to Mike Hubbard.
Isbell testified to his involvement in placing language into the Medicaid budget, that would benefit Hubbard’s client, APCI. Isbell recalled how lobbyist Ferrell Patrick and Representative Greg Wren (R-Montgomery) had brought him the language that would later become part of the budget. Isbell stated that the two men brought him the language handwritten on a yellow legal pad. He said he entered it into the computer, cleaned it up for spelling and punctuation, making no further changes.
He recalled that he felt compelled to seek Hubbard’s approval before sending it on to Norris Green, then head of Legislative Fiscal Office (LFO). Given the urgency to have the language vetted before placing it in the budget in the next day’s Ways and Means Committee meeting, Isbell entered the House Chamber during Session and asked for Hubbard’s approval from the dais. Hubbard read the language and gave his approval. Isbell said he was under the impression that Hubbard and others were aware of Wren and Patrick’s plan, and only needed to approve the final language.
Representative Wren later pleaded guilty to using his office for personal gain because he was being paid by a company affiliated with APCI to put language into the Medicaid budget.
As part of his plea agreement, Wren agreed to testify against others who were involved in the scheme. Wren, who was forced from his House seat after his conviction, is set to give testimony against Hubbard later in the trial.
The day’s first witness was the president of Hubbard’s business interest, Craftmaster Printers, who testified about the company’s troubled financial situation.
Former senior vice president of Hubbard’s Auburn Network, Chris Hines, a 15-year employee, testified that he had scant knowledge of Hubbard’s multiple consulting contracts. He was only charged with billing and depositing the checks.
Jeff Woodard, Clerk of the House of Representatives, was called to the witness stand to verify the official records that showed the language favorable to Hubbard’s client, APCI was, in fact, at one time, part of the General Fund Budget voted for by Hubbard and passed by the House.
Court observers agreed that the Prosecution’s case was building witness by witness.
The only notable attendee to the day’s proceedings was Rob Riley, who took copious notes during the trial.
Set to testify on Day Three are: Robert Kammerdi; Representative Steve Clouse (R-Ozark) General Fund Budget Chair; Norris Greene, former director of LFO; Mary Lawrence; Rachel Riddle; and Don Williamson, former Public Health officer.