By Brandon Moseley
Alabama Political Reporter
A Federal Grand Jury indicted two Birmingham lawyers and an Alabama coal company executive on charges of conspiracy, bribery, wire fraud and money laundering conspiracy.
The indictment charges that the three paid former state Rep. Oliver Robinson, D-Birmingham, who has already pleaded guilty, to take official action favorable to their interests in connection with preventing the expansion and prioritization of an Environmental Protection Agency Superfund site in North Birmingham.
U.S. Attorney Jay E. Town, FBI Special Agent in Charge Johnnie Sharp Jr., and Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge James E. Dorsey announced the indictments in a press conference on Thursday attended by The Alabama Political Reporter and other media.
Specifically, a six-count indictment alleges that Joel Iverson Gilbert and Steven George McKinney, both partners in the Birmingham law firm Balch & Bingham, conspired with David Lynn Roberson, vice president of government and regulatory affairs for Drummond Company, to provide Robinson with a valuable and confidential consulting contract in exchange for his taking official action favorable to Balch & Bingham and its client, Drummond, regarding an environmental cleanup site in north Birmingham that could have cost Drummond tens of millions of dollars.
“It matters not on which side of the bribe one falls in public corruption,” Town said. “Those who pay and those who receive will be prosecuted to the fullest. The work done by this trial team and investigators with the FBI and IRS has been as diligent as it has been exceptional.”
“Public corruption tears at the fabric of democracy and undermines the public’s trust in government,” Sharp said. “Those who choose to engage in corrupt practices can expect the FBI and our partners will be working to bring you to justice.”
“The allegations against these defendants show personal gain and agendas were placed above the overall health of the citizens who lived and worked in this community,” Dorsey said. “Bribery of political officials is against the law and IRS Criminal Investigation will continue to assist with the ongoing effort to expose everyone involved in this conspiracy.”
This all began when the EPA designated an area of north Birmingham, including the neighborhoods of Harriman Park, Fairmont and Collegeville, as a Superfund site after finding elevated levels of toxins during soil sampling.
Town told reporters that these chemicals are commonly associated with coal.
In September 2013, the EPA notified five companies, including ABC Coke, a division of Drummond Coal, that they could potentially be responsible for the pollution. A company determined to be responsible “could have faced tens of millions of dollars in cleanup costs and fines,” according to the indictment.
In September 2014, EPA proposed adding the 35th Avenue Site to its National Priorities List, signaling that it required priority attention. Placement on the priorities list would have allowed EPA to use the federal Superfund Trust Fund to conduct long-term cleanup at the site, provided the state of Alabama agreed to pay 10 percent of the costs, which could equal millions of dollars, according the charges. EPA also was considering the petition of a Birmingham advocacy group, GASP, to expand the site to the Tarrant and Inglenook neighborhoods.
Town said that if the 35th Avenue Site had been placed on the EPA’s National Priorities List it would have meant that the federal government would just clean up the site and then come after the polluters, including ABC Coke/Drummond, after the fact without any input or negotiation with the polluters. Drummond would not be able to negotiate a cap on their exposure. The U.S. government could clean up the site and then come after the alleged polluters after the cleanup. There is no way to limit their exposure. Expansion of the site would have increased Drummond’s eventual exposure to this even more.
The EPA contacted the Alabama Department of Environmental Management (ADEM) to notify the state of EPA’s proposal for the site. Then Alabama Gov. Robert Bentley put ADEM on points for the superfund site.
Drummond decided to mitigate their exposure here by fighting the process. The company hired Balch & Bingham to help them come up with a plan. Roberson, Gilbert, and McKinney began crafting a plan.
Town said that the goals of the defendants were to: prevent the site from going on the national priorities list; prevent the proposed expansion to Inglenook and Tarrant; and defeat the EPA’s actions in the state all together.
To make their plan work, they needed a point man. Robinson was perfect because he represented the area in the House, he was vice chairman of the Jefferson County Legislative delegation, and he was willing to do it. Robinson took $14,000 down and $7000 a month.
The three were charged with conspiracy, bribery, three counts of honest services wire fraud, and one count of money laundering conspiracy.
The bribery count charges that the men agreed to give the lucrative contract and monthly payments to the Oliver Robinson Foundation to influence and reward Robinson for, among other things, using his official position to: Publicly pressure and advise the Alabama Environmental Management Commission and the Alabama Department of Environmental Management’s director to take a position for the state that was favorable to Balch & Bingham and Drummond in relation to EPA’s efforts to place the 35th Avenue Site on the NPL and expand it into Tarrant and Inglenook; Meet with and advise EPA officials to take a position favorable to Balch & Bingham and Drummond regarding the site listing and expansion; and vote as a member of the Alabama House Rules Committee to send a joint resolution, written by Gilbert, to the House floor for consideration with a recommendation for adoption. The resolution urged the state attorney general and ADEM to “combat the EPA’s overreach.” Robinson voted for the Gilbert resolution.
According to the indictment, Gilbert, McKinney and Roberson formed a tax-exempt corporation named Alliance for Jobs and Economy and recruited corporations to contribute money to it to help fund opposition to EPA’s actions in north Birmingham. Roberson opened and controlled AJE’s bank account. During 2015 and 2016, Drummond and four other corporations contributed a total of $195,000 to AJE, according to the indictment, and Gilbert and Roberson directed almost all of that money to the Oliver Robinson Foundation. Gilbert and Roberson also directed more than $150,000 from Drummond to the Oliver Robinson Foundation. In total, the Oliver Robinson Foundation received approximately $360,000 under the contract during 2015 and 2016.
As part of the conspiracy, payments from Drummond and AJE to the Oliver Robinson Foundation were routed through Balch & Bingham. According to the charges, the Oliver Robinson Foundation invoiced Balch & Bingham; Balch & Bingham paid the invoices; Balch & Bingham invoiced Drummond or AJE in an identical amount; and Drummond or AJE promptly paid those amounts to Balch & Bingham.
Town said that the accounting department at Balch was misled by McKinney and Gilbert as to what the money was for.
Town dismissed suggestions of a much wider conspiracy. He said that, “Those contacts at Drummond and Balch were in my opinion duped by the conspirators.” The conspirators, “Did not share all of the details with the principals at Balch and at Drummond.”
Town said that one of the terms of the contract was that Oliver Robinson could never divulge the existence of the contract.
Town said that Oliver Robinson never disclosed his conflict of interest while dealing with the EPA, ADEM, or the legislature, “Never once did he say that he was representing the interest of a law firm and a coal company.”
Robinson, 57, of Birmingham, pled guilty on Sept. 7 to conspiracy, bribery, and honest services fraud for accepting a valuable contract between Balch & Bingham and his non-profit Oliver Robinson Foundation to influence and reward him for using his elected position to oppose prioritization and expansion of the EPA site, designated the 35th Avenue Superfund Site. At the time, between November 2014 and November 2016, Robinson represented Alabama House District 58.
Town would not disclose how the federal government became aware of all of this or when. Town said government investigators were, “Very deliberate in our investigation.” Town said that the government wanted to protect their methods.
Town said that what the conspirators did “Was buying a public official.” They made the decision, “That is is cheaper to pay for a politician than to paying for an environmental cleanup.”
Town said that the lawyers crafted all of Robinson’s talking points and coached him in his dealing with EPA, ADEM, and the legislature. “McKinney and Gilbert were the brains behind every official action taken by Robinson.” “This is the worst type of public corruption. For the greed of a few and at the expense of families and children potentially exposed to pollutants.”
Town said, “You don’t get to buy politicians.”
A reporter asked Town about Gilbert’s Attorney’s, Jack Sharman, claim that Gilbert was innocent of any wrongdoing.
Town said that was part of the adversarial process. “There was nothing he said that I did not expect him to say.”
Town said of Robinson, “He has been a helpful witness.”
Town said there have been, “No discussion about plea deals,” with the defendants.
APR asked how the government reached the conclusion that others at Drummond and Balch were not involved in this?
Town said, “They were not given the full details and that was remarkably clear in the evidence.” Town said that Robinson was the “Only public official” involved. At Drummond, “Roberson appears to be the only one exposed at that point.”
Town expected that the alleged conspirator will be arraigned in the next two weeks.
Town said that the government had, “A remarkable amount of evidence” in this case and would be surprised if we get this case to trial this year as it will take defense counsel time to digest it all, “But we are ready to go.”
ABC 33/40’s Lauren Walsh asked about how the money could flow through Balch and everyone there be unaware. Town said, “I don’t believe that the folks writing checks to the Oliver Robinson agreement knew,” what it was for.
APR asked since Gilbert and McKinney were acting on behalf of Balch & Bingham and Roberson was acting on behalf of Drummond as a whole why the government did not go after the whole entities with civil action?
Town said, “We are not going to ever count those options out, but at this time we are going to focus on the criminal prosecutions.’
Regarding the exposure of possible other bad actors, Town said, “If more evidence comes up, that we can prove beyond a reasonable doubt, we will charge them.”
The maximum penalty for conspiracy is five years in prison and a $250,000 fine. The maximum penalty for bribery is 10 years in prison and a $250,000 fine. The maximum penalty for honest services wire fraud is 20 years in prison and a $250,000 fine, and the maximum penalty for money laundering conspiracy is 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction.
The FBI and IRS investigated the case. Assistant U.S. Attorneys George Martin, Robin Beardsley Mark and John B. Ward are prosecuting.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty and the defense teams have not yet had a chance to present their defense.
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.
House OKs bill to clarify consulting contracts by state legislators
By Brandon Moseley
Alabama Political Reporter
Tuesday, the Alabama House of Representatives passed a bill to try to clarify how legislators accept consulting contracts under Alabama’s 2010 ethics law. Some pundits have suggested that House Bill 387 is actually designed to weaken the existing ethics law.
Sponsor state Rep. Rich Wingo, R-Tuscaloosa, argues that the legislation is merely a clarification and is intended to prevent legislators from inadvertently crossing the line into illegality.
Wingo said that his bill would require legislators to notify the Alabama Ethics Commission that they have entered into a consulting agreement in an area outside of their normal scope of work.
State Rep. Paul Beckman, R-Prattville, said, “I have never understood why members of this body were allowed to take contracts as consultants or counselors.”
Wingo said, “Never do I use the word counselor in my bill; it is consulting.”
Beckman asked, “Are we going to be getting into an area where every time we turn around we create a bureaucratic nightmare where we have to go get an opinion. These opinions whether it is orally or written don’t hold up in a court of law.” Beckman said, “We are serving the people here but we get this admonition that we can still be a consultant if we get an opinion.”
Wingo said, “This does not apply to professions where a member is currently licensed.”
Beckman said, “I would like to see more opinions coming out of the Ethics Commission. Right now we have the Ethics Commission competing with the Attorney General’s office over who has more authority.”
State Rep. John Rogers, D-Birmingham, said,”This happened to a friend of mine. He just got out of prison. He was a state senator and had a written letter from the Ethics Commission which his lawyer read at trial and the jury convicted him anyway.”
Rogers never named his friend, but reporters think he was talking about former state Sen. Edward Browning ‘E. B.’ McClain who spent over 22 years in the legislature until he was convicted on 47 counts of conspiracy, mail fraud, bribery, and money laundry in 2009.
A federal jury found that McClain and the Rev. Samuel Pettagrue were guilty in a scheme where McClain would secure public funds for Pettagrue’s community programs and then receive a kickback once the funds were in hand. McClain was sentenced to five years and ten months in prison. McClain was not prosecuted under the Alabama ethics law as the state has a much weaker ethics statute then. The current ethics law was passed in 2010.
Rogers said, “If they offer me a consulting contract for a field like aerospace engineering that I know nothing about they are trying to pay me off. If you can already be a consultant for something you know about why would you seek a consulting contract for something you don’t know about.
Rogers this is how they can pay you off for your vote.”
State Rep. Artis “A.J.” McCampbell said, “I don’t like making changes to things like this because we get into things called unintended consequences.”
McCampbell was reading from the bill and Wingo said, “You are reading from the original version it has completely changed.” “We worked tirelessly on this bill with the Ethics Commission this is not a fly by night bill.”
“If a member of the legislature enters into a contract to do a consulting contract outside of their normal field of work this bill requires that they consult with the Ethics Commission first,” Wingo said. “It is up to the member to notify the Ethics Commission not to the company or person offering them the money.”
State Representative Pebblin Warren, D-Tuskegee, said, “Everybody but legislators are allowed to do contract work up to $30,000.”
Rep. Wingo said, “This is not intended to be a roadblock.”
State Representative Arnold Mooney, R-Indian Springs, said, “The whole purpose of this is not to prevent members from doing work in your field.” “What you are doing is offering to protect me.”
State Representative John Knight, D-Montgomery, asked Wingo what the Alabama Attorney General said about this legislation.
Wingo replied, “I have not contacted the Attorney General.”
Knight responded, “Something from the Ethics Commission does not carry a lot of protection from the Attorney General. We have seen that in the past. I think the Attorney General and the Ethics Commission should be in agreement in the working on this.”
Wingo answered, “Maybe this is a first step.”
Rep. Laura Hall, D-Huntsville, asked, “Do we have anybody doing work outside of their regular scope of work?”
Wingo answered, “Yes I think so.”
Wingo said, “If we had had this bill four or five years ago maybe we could have been spared the embarrassment that this body experienced with the former Speaker.”
Wingo was referring to former Speaker of the House Mike Hubbard who was convicted of 12 counts of felony ethics violations in June 2016. Ironically, Hubbard is largely responsible for creating the ethics law that he was found guilty of violating 11 times in his relentless pursuit of outside contracts and personal wealth.
Unlike McClain, however, Hubbard has not yet served any of this sentence.
House Bill 387 passed 67-0 with 26 legislators abstaining.
The bill now moves to the Senate for its consideration.
(Original reporting by the Alabama Media Group’s Lisa Osborn in 2009 was consulted in this report.)