After a jury found former Alabama House Speaker Mike Hubbard guilty on 12 felony corruption charges, the state’s prosecutors held a press conference on the courthouse steps.
First question: Will there be more indictments in the future?
“We cannot comment on that at this time,” Acting Attorney General Van Davis replied ominously.
The question and non-answer refer to seven of the guilty charges against Hubbard, in which a pair of businesses and four of the state’s richest and most high-powered corporate executives were also named.
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The charges stem from a provision in the Alabama ethics law forbidding elected officials from soliciting and/or receiving “a thing of value” from a principal, the legal term for an employer of lobbyists.
But the law goes both ways. It states very clearly that no “principal shall offer or provide a thing of value to a public employee.”
The parties named in Hubbard’s guilty verdicts are:
▪ Will Brooke, former chair of the Business Council of Alabama’s executive board and executive vice president of Harbert Management Corporation, an investment firm with more than $4 billion in assets.
▪ Rob Burton, CEO of Hoar Construction, one of the largest construction companies in the South.
▪ Jim Holbrook, former CEO of Sterne Agee, Birmingham’s largest investment bank.
▪ Jimmy Rane, owner and CEO of Great Southern Lumber, named recently by Forbes as Alabama’s richest man.
▪ American Pharmacy Cooperative, Inc. (APCI), a Bessemer-based corporation that serves independent pharmacists; Greg Wren is its CEO.
▪ Edgenuity, a Scottsdale, Ariz.-based education software company; Michael Humphrey, its executive vice president, hired Hubbard as a consultant.
Brooke, Burton, Holbrook and Rane—all of whom are principals under Alabama law—each invested $150,000 in one of Hubbard’s businesses, Craftmaster Printing. Brooke is named in an additional charge, relating to a business turnaround plan he had written for the speaker. APCI and Edgenuity, also principals, both hired the speaker to work as a consultant.
During Hubbard’s trial, state prosecutor Matt Hart revealed that the state still has a grand jury empaneled on the Hubbard matter, and this, combined with Davis’s “no comment,” strongly suggest that these businesses and business men are now at risk of facing prosecution.
Sending a message
A core group of about 20 journalists attended the trial from gavel to gavel, and in the gallery sat a rotating cast of attorneys for some of the witnesses, as well as curious citizens from across Lee County and beyond.
During breaks, attendees would often ask one another, “What do you think?” Opinions varied widely as to the effectiveness of this or that testimony or piece of evidence. But one thing everyone seemed to agree on: the faces of the jurors gave no hints about what they were thinking.
“I’ve never seen a jury that’s so hard to read,” said one reporter at the end of a long day of testimony.
They all listened intently, and with the exception of a few lighter moments that drew laughter from everyone in the courtroom, including the judge, these 12 men and women from Lee County were absolutely poker-faced.
It suggested that they fully understood the importance of their task, which was not only to decide the fate of a fellow Alabamian but to establish precedent and parameters for the state’s tough new ethics law, which the defendant himself spearheaded into existence in a special session in December 2010, his first act as speaker.
With their guilty verdicts for the charges in which Brooke, Burton, Holbrook and Rane were named, as well as those that named Edgenuity and APCI, the jury sent a clear message: If you’re a public official, don’t do business with companies or executives who hire lobbyists in the state.
The other guilty verdicts
The first guilty verdict Judge Jacob Walker read was for voting in favor of legislation that would benefit APCI, with which Hubbard had a $5,000 a month contract. This surprised few who’d watched the trial from start to finish.
Hubbard and his defense team never tried to deny that he had the contract or that he’d cast the vote. They argued instead that the conflict of interest lay in a mere 23 words of text in a bill that was hundreds of pages long, that Hubbard wasn’t aware until the last minute that the language would benefit his client, and that he later took steps to have the language removed.
The jury didn’t buy it.
Rounding out the 12 guilty verdicts against Hubbard were four relating to his dealings with Bobby Abrams and his company, CV Holdings. A New York-based tycoon, Abrams owned several businesses in Auburn and Lee County, including Capitol Cups, which makes sippy cups, and SIO2 Medical Products. Abrams offered Hubbard a $10,000 per month contract to help him find new corporate clients for Capitol Cups through the speaker’s contacts in the business world.
Prosecutors presented evidence that Hubbard used his own staff and the mantle of his office to pursue these clients. The state also also used emails and witness testimony to show that Hubbard had lobbied the state’s executive branch to provide Abrams with millions of job-training dollars to develop a workforce for his medical products business, and that the speaker directed his staff to lobby officials in the U.S. Patent Office to approve a patent that would help Abrams in a multimillion-dollar lawsuit Abrams was fighting in federal court.
But unlike the parts of the law covering the crimes in which Brooke, Burton, Holbrook and Rane are named, the provisions Hubbard is guilty of violating with Abrams appear to fall entirely on the former speaker and his own decisions and actions.
The not guilty verdicts
In a statement following his conviction, Hubbard maintained his innocence and declared that the verdict set a “scary and dangerous” precedent that will make it “impossible for citizen-legislators to serve in public office” by limiting their ability to make a living. But eight of Hubbard’s “not guilty” verdicts suggest otherwise.
The first four counts against Hubbard were for steering state Republican Party resources to his own businesses while he was the party’s chair. The defense didn’t deny this, but pointed to a provision in the ethics law allowing for continued work in pre-existing business relationships. The Alabama GOP had paid Hubbard’s companies to do work for them both before and after his term as party chair, so the jury found his actions to be acceptable under the law.
Another four not guilty charges related to Hubbard’s work as a consultant for the Southeast Alabama Gas District (SEAGD). Prosecutors argued that the speaker used the mantle of his office to help his clients and lobbied the executive branch on behalf of economic development projects in the Wiregrass region.
The defense argued that SEAGD had received an informal letter of approval from the state’s Ethics Commission for their contract with the speaker, and that contract called for the speaker to do economic development, which required Hubbard to lobby the executive branch in order to secure state economic incentives.
These not-guilty verdicts showed that the jury took seriously their charge to convict beyond a reasonable doubt. But to many who watched the trial from start to finish, the SEAGD cluster of charges raised serious concerns about how Alabama is governed.
For one, Hubbard didn’t contact SEAGD for a job; they came to him. And the defense tried unsuccessfully to enter into evidence similar contracts held by other legislators. At one point, the lead defense attorney got three names into a list of such lawmakers over repeated objections from the prosecution before Lee County Circuit Judge Jacob Walker told him to stop.
Together, these facts reveal in hazy outlines a system in which Alabama municipalities and special interest groups, facing a perennially austere state budget, pay elected officials to help them secure scarce state resources.
With friends like these...
Hubbard’s defense team leaned hard into a provision in the state’s ethics law offering exceptions for gifts and favors exchanged between friends, and the jury bought the argument on three charges, delivering not-guilty verdicts for those involving lobbyist and former Governor Bob Riley, his lobbyist daughter Minda Riley Campbell, and Billy Canary, CEO of the Business Council of Alabama and a registered lobbyist.
Unlike just about every other witness co-named in one of Hubbard’s charges, these three testified that they and the defendant have actually done things together that friends do, including dinners, vacations and concerts.
Jimmy Rane testified that he’d been friends with Hubbard since 1984, long before the former speaker entered politics. But the jury found Hubbard guilty in the charge in which Rane was named.
With the differing verdicts, the jury drew a hard line regarding friendly gifts and straight-up business deals. While the Rileys and Canary tried to help the speaker find work and clients, a favor that friends from all walks of life commonly do for one another, Rane, a principal, gave the speaker a personal check for $150,000 to save his ailing business.
“They can go on hunting trips together, they can go fishing together,” prosecutor Michael Duffy said in closing arguments, “but they can’t do business together.”
The jury was swayed by this argument, and with their guilty verdict provided teeth and backbone for Alabama’s ethics law.
But the defense’s friendship argument also provided a profound new twist to the story of the rise and fall of Mike Hubbard. At the onset, Hubbard’s tale teemed with hubris and irony: a politician campaigns for ethics reform and wins, he champions new ethics laws, and then he turns around and gets nailed by them.
But three weeks of trial testimony revealed a classic tragedy.
In the end, Hubbard’s defense helped his friends, not him.
The Rileys and Canary are seasoned political operatives, and they drew Hubbard into their world. Hubbard testified that when he told his wife Susan that he wanted to help Riley run for Congress in 1996, she said, “Absolutely not. You don’t know anything about politics.”
But he jumped in anyway, building a new life and identity in politics. Riley encouraged Hubbard to run for the statehouse in 1998, asked him to be state party leader in 2006, and was a fellow mastermind of the “Republican Handshake with Alabama” campaign that gave Hubbard the speakership and the governor-turned-lobbyist a close friend (“like family”) in the state’s most powerful seat.
Same thing with Canary. A former staffer in the George H.W. Bush White House, former chief of staff for the Republican National Committee, and accomplice with Karl Rove on numerous and notorious campaigns in Alabama in the 1990s and early 2000s, Canary provided polling that was indispensable in Hubbard’s first run for office.
With Canary at the helm, the BCA’s political action committee and the organization’s members contributed hundreds of thousands of dollars to the 2010 Republican takeover, after which Canary had in Hubbard a powerful lever over the state’s interests — the two had a standing weekly meeting in the speaker’s office during legislative session to work together to shape the legislative agenda.
But other than power, which the 12 guilty verdicts showed Hubbard couldn’t handle, these friends gave him nothing of real value. None of the assistance from Canary or the Rileys related to Hubbard’s charges resulted in a job. The only thing that paid off was the investment scheme in Craftmaster, which Canary helped facilitate.
And that ended badly for Hubbard.
Now it could also end badly for four towering titans of Alabama’s business community, the very constituency that Canary, as head of the BCA, is paid to help and represent.
Joe Miller: email@example.com, @JoeMillerWriter