Former Governor Bob Riley seemed annoyed when he took the witness stand on Friday in the corruption trial of Mike Hubbard, Speaker of the Alabama House of Representatives. After each question posed by the lead prosecutor, Matt Hart, he let out a long sigh, stared blankly into space for a long moment, and then answered in a slow, bored voice.
“Are you asking me if these are emails between me and Mike?” he asked as Hart showed him a thin stack of documents. “Let’s see. Do I read this from the bottom up?”
After Riley finally confirmed them, Hart had the emails projected on a screen facing the jury and read them aloud, stopping after a missive in which Hubbard wrote about his job as Speaker: “The hours and pay for this job is not good. I really want to work for BR&A!”
“Is BR&A your lobbying firm, Bob Riley and Associates?” Hart asked.
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“You have to understand my relationship with Mike,” Riley replied after a pause. “Mike once told me at one point, ‘I can’t talk to my dad about this. You’re like a father to me.’”
The question and answer drill right to the core of one of the 23 felony charges against Hubbard, and to the core of the case Hubbard’s attorneys are making in his defense. Alabama law prohibits elected officials from asking for and/or receiving a thing of value from a lobbyist or someone who employs lobbyists. But the law has an exception for friendships and preexisting business relationships.
Regardless of which argument ultimately sways the jury, this day in court is surely not what Hubbard had in mind on December 20, 2010, when then-Governor Riley, surrounded by Cub Scouts and Hubbard and other legislators, signed one of the nation’s toughest ethics bills into law.
‘Voice of the people’
Riley and Hubbard met in 1995, when Riley was making his first foray into politics with a bid to represent Alabama’s 3rd District in Congress. Former Auburn quarterback Pat Nix introduced them, suggesting that Hubbard’s experience in media and marketing might benefit the campaign.
It did. Riley won, and in the process the two became close friends. “Like family,” the form er governor testified.
Two years later, Riley encouraged Hubbard to make a run for the Alabama House of Representatives, and in 1998 he won a seat representing Auburn in Montgomery. In 2002, Riley joined him by winning a campaign for governor. At the time, both houses of the state legislature were controlled by Democrats, as it had been for more than 100 years, since Reconstruction. But for several national election cycles, Alabama, like other Southern states, had been solidly red, and Riley wanted Hubbard to lead the charge to flip the state house as well.
With Riley’s support, Hubbard assumed leadership of the state’s Republican Party, and he conjured a four-year plan to unseat the Democrats. He recruited candidates in more than 20 Senate and House districts across the state and he devised a fundraising scheme modeled on a capital campaign. Central to this was the “Governor’s Circle,” a tier of more than 100 donors who agreed to chip in $10,000 for each of the four years leading up to the 2010 election.
They called it the “Republican Handshake with Alabama,” and its centerpiece was a promise of ethics reform.
In the years leading up to the 2010 campaign, a parade of state Democrats — from a former governor and state legislators down to the mayor of Birmingham — had been convicted on corruption charges. And this in a state that at the time had some of the loosest ethics laws in the nation; lobbyists could give elected officials up to $250 dollars on any given day, day after day, without either of them having to report it.
Each of the eight years he served as governor, Riley had pushed ethics reform. But every time it died in the House or Senate. Emboldened by the victory, Hubbard encouraged Riley to call a rare special session in December to quickly pass ethics reform so that Riley could sign it and cement his legacy as governor.
“I set as our goal maintaining the tradition of two words that are so important they appear on the seal of the Alabama House of Representatives: Vox Populi — Voice of the People,” Hubbard would later write in his book, “Storming the Statehouse: The Campaign that Liberated Alabama from 136 Years of Democrat Rule.” “The phrase does not say voice of the special interests, voice of the powerful, or voice of the campaign contributors.”
The new Republican majority voted the ethics package through, and Riley invited Cub Scout Pack 397 to the signing, saying the boys “represent what we should be like” in government. “It really is that simple.”
A powerful job
In addition to laying out the charges against Hubbard, the speaker’s criminal trial also offers a clear behind-the-scenes view into how the state legislature functioned under his leadership, and this view doesn’t quite align with his “vox populi” declaration.
Numerous witnesses have testified that the speaker position is perhaps the most powerful in Alabama state government. “If the speaker doesn’t want something to happen in the House, it doesn’t happen,” said Steve French, a former state senator. “And if the speaker does, the chances are much greater — in the range of 90 percent.”
And Hubbard wielded this power with a particular bravado, Montgomery politicos say, removing legislators from committees and killing their bills for even the smallest transgressions against his agenda. “It’s been very much like a dictatorship,” says Claire Austin, a Montgomery lobbyist and Republican political consultant. “He controls the House with an iron fist. He’s very vindictive and he has a long-term memory.”
The details of one of the charges against Hubbard illustrates this unique power. He’s accused of voting for legislation that included a clause that would have given a monopoly over the state’s Medicaid prescription drug program to American Pharmacy Cooperative, Inc., with which he had a $5,000 a month contract at the time. The move — which would impact more than 600,000 poor children, senior citizens and people with disabilities — was discussed and agreed upon in a single meeting in the speaker’s office between Hubbard, a top staffer, a pair of lobbyists, and two legislators Hubbard had appointed to leadership positions on the House committee charged with shaping the general fund budget.
With Hubbard’s approval, the representatives slipped the language into the bill, moved it through their committee with no public discussion and it went onto the House floor for a full vote. It was only after Hubbard’s chief of staff learned of Hubbard’s contract with APCI, late on the day the budget was up for vote, that the speaker moved to have the language removed. He told his staffer to try to get it out, and when it couldn’t be done in time, Hubbard went ahead and voted for the budget with the language still in it, against his staffer’s advice. The bill moved to a Senate and House conference committee, and there, with Hubbard’s blessing, the language was removed.
In addition to this one highly detailed example, evidence and testimony have shown that a handful of lobbyists and representatives of special interest groups have enjoyed a level of access to and influence over the speaker that other lobbyists and special interest groups — much less, regular Alabamians — haven’t had.
“There are a handful of lobbying firms he’s friends with, and those are the only ones he’ll work with,” Austin says. “He pushes their bills and diminishes other lobbyists.”
Personal financial woes
Evidence and testimony has shown that, in addition to former Governor Riley, the core of Hubbard’s inner circle has consisted of Dax Swatek, who is the founder and co-owner of a lobbying firm in Montgomery, and Billy Canary, the president and CEO of the Business Council of Alabama. Both Swatek and Canary had a standing weekly meeting with Hubbard during legislative sessions to strategize and craft the state’s legislative agenda. Both Swatek and Canary had worked closely with Hubbard on the 2010 “Republican Handshake” campaign to seize control of the state legislature.
At these meetings, however, they also discussed Hubbard’s personal financial issues, about which he was greatly distressed. In January 2011, Hubbard lost one of his sources of income when a company he was working for was bought out. The company offered him another year’s salary in a severance deal, and after that a commission-based service contract. And he continued to draw a $132,000 salary from his own company, Auburn Network (which provided him with a company car), in addition to the more than $60,000 he earned as speaker, and his wife was paid $173,000 as a dean at Auburn University. But a company he co-owned, Craftmaster Printers Inc., had fallen behind in paying its federal payroll taxes and was on the brink of bankruptcy.
“We would hear about it if his business was going poorly,” Swatek testified about the speaker’s weekly meetings with him and Canary, both registered lobbyists. “He talked about being laid off. Asked about ways to generate new business. He would say how the speaker’s job was somewhat overwhelming and it was impacting his ability to make money. He was wondering if it was time to quit and do something else. He said he might quit and work for Bob Riley and Associates.”
And while the trial’s evidence has shown this to be the case, it has also revealed that Hubbard tried to keep his speaker position while working for Riley’s business, a lobbying firm. In emails to the former governor, Hubbard urged Riley to “deregister” as a lobbyist and hire him. “I still believe that you are a ‘strategic business consultant,’ not 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,” he wrote.
Asked about this, Riley said from the witness stand, “You’ve got to understand, Mike Hubbard is doing everything he can to not break the law.”
Riley wasn’t the only lobbyist Hubbard reached out to for support. He also solicited Swatek, as well as several executives who employ lobbyists.
With his printing business teetering near bankruptcy, he reached out to Will Brooke, who was then chairman of the board of directors for the BCA. Brooke worked as executive vice president of Harbert Management Corporation, an investment firm overseeing $4 billion in a variety of funds, and he came up with a turnaround plan for Craftmaster.
The plan called for Hubbard to find 10 investors willing to pony up $150,000 each so the company could retire its debt and pay its delinquent taxes. “The tax issue was the biggest concern from a moral stand point, because it’s the law,” Brooke testified.
Brooke himself bought in, as did three other top businessmen at companies that employ lobbyists: Jim Holbrook of Sterne Agee Group Inc., a financial firm based in Birmingham; Rob Burton, of Hoar Construction; and Jimmy Rane of Great Southern Wood Preserving Inc. These deals would result in four of the felony charges Hubbard now faces.
Swatek, one of Hubbard’s favored lobbyists, learned through the grapevine that Hubbard intended to hit him up as well, and he told Hubbard’s top staff to let their boss know he wasn’t interested.
“You said that if you were asked, your answer would be no?” prosecutor Hart asked Swatek in court on Thursday.
“That’s right,” Swatek replied.
“In fact,” Hart continued, “your answer wouldn’t just be no, but hell no.”
Yet at a meeting later in Hubbard’s office in Auburn, Hubbard pulled out a list of potential investors and said, “I’d like for you to be an investor.”
“I said, ‘No, thank you. I can’t do that,’” he testified.
“Why?” Hart asked.
“I told him that at a minimum it was a perception issue, and my understanding of the ethics law was that he couldn’t ask, and I couldn’t give,” Swatek answered, adding that it was “an awkward conversation.”
‘His way of selling himself’
The state’s evidence is full of dozens of examples of such requests from Hubbard to lobbyists and their employers for investments in his company, for job leads and, in the case of Riley, for a job outright. And in nearly all these correspondences, he also apprises them of work he’s done in the legislature with regards to legislation they were either for or against.
In one message to Brooke, he wrote, “Politically for me, things are going very well,” adding that the House “will be rolling out the Charter School legislation and the ‘fix’ for the immigration law over the next few days,” referring to two of the BCA’s top issues during the 2012 legislative session. And in the next paragraph he wrote that his year-long severance deal was about to end.
“As you know,” Hubbard wrote, “my concern is financial and the fact that serving as Speaker consumes a (sic) enormous amount of time and generates virtually no income. I have been in conversations with Governor Riley and believe I would have an opportunity to work with him and his company if I were to give up being speaker and resign from the legislature.”
“I am of greatly mixed emotions as I consider your note,” Brooke replied. “You are, in my mind, and in the minds of many others, the single strongest and most effective leader in Alabama politics today. It would be a huge loss for our state should you find yourself in a position of having to resign.”
Brook testified that he considered Hubbard’s situation “to be a real problem.” In addition to the possibility of losing a speaker who met weekly with Canary, the BCA’s top man, Brooke feared that Hubbard might fall under financial influence and into a scandal. “That’s always a risk,” he said Thursday. “There has been a pattern in the past with speakers getting influenced by businesses.”
Asked about Hubbard’s mix of personal and state businesses in his correspondences, Brooke testified: “I would’ve preferred that not be the way he’d do it. But it’s just his way of selling himself to me to get me to help with his job situation.”
After Brooke drew up the business plan, Hubbard got a call from French, the former state senator. He was now working for Sterne Agee, a financial firm in Birmingham, and he said his boss, CEO Jim Holbrook, wanted him to meet with the speaker to discuss the financial precariousness of Jefferson County, which was heading toward what would become the largest bankruptcy of a municipality in American history — at $4.2 billion.
The two met at the Birmingham Marriott on Grandview Parkway off U.S. 280, and French told Hubbard that state legislators from Jefferson County were working to come up with a solution. He asked the speaker if he would support it when they presented it. Hubbard said he would, French testified, and added, “Once I finished, he asked if we could talk about his business.”
Hubbard told French about Craftmaster. “He said it wouldn’t just be a printing company in East Alabama going bankrupt,” French recalled to the jury. “It would be the business of the speaker of the House of Representatives that would go bankrupt.”
Hubbard asked French if he thought Holbrook would help him out, and French told the speaker he believed he would. Soon thereafter, French hand-delivered Hubbard a checkk for $150,000.
‘Are you serious?’
As the five o’clock hour neared on Friday in the Lee County Courthouse, the court staff propped open the doors to alleviate the heat and humidity of the room. The exchange between Hart, the prosecutor, and Riley, the former governor, grew increasingly testy.
“Are you serious?” Riley asked in response to one of Hart’s questions.
“I’m very serious,” Hart said.
For many longtime observers of Alabama government, Riley’s tenure shines among a long history of tarnished governors. “In my nearly 40 years in Alabama, he is the best governor I’ve ever seen,” says Joey Kennedy, who won a Pulitzer in 1992 as a reporter for the Birmingham News and is now a columnist for the independent news site Alabama Political Reporter. “Bob Riley is one of the best governors Alabama has ever had.”
Kennedy pins Riley’s legacy on three main issues: “Education, economic development and ethics.”
But, he says, the trial of Mike Hubbard, who hails Riley as his mentor and named one of his sons after the governor, is in his opinion a display of “the worst corruption Alabama has ever seen.”
Joe Miller is an independent contractor. Contact him at firstname.lastname@example.org, @JoeMillerWriter
On Monday in the corruption trial of Mike Hubbard, the prosecution will finish former Alabama Gov. Bob Riley’s testimony and rest its case. Then the defense will begin its case.