Consultant: No direct order to use Hubbard-affiliated printer

A political consultant said Thursday morning he never had “a specific conversation” with Alabama House Speaker Mike Hubbard telling him to use a printing firm in which Hubbard held a partial interest.

Randy Kammerdiener, co-owner of Majority Strategies, a Florida-based direct mail firm that has done work for the party since 2005, also testified in Lee County Circuit Judge Jacob Walker’s court that Hubbard negotiated a contract with the company that brought them less money than other places where they did business.

“Certainly the way he did it, we were making less than we would have,” Kammerdiener told defense attorney Lance Bell.

The firm’s use of the printer – and emails between Kammerdiener and other owners suggesting Hubbard forced them to do so – are key parts of four counts in the Auburn Republican’s ethics case. Prosecutors accuse Hubbard of steering business to Craftmaster, which he co-owned and has gone through financial struggles in recent years while chairman of the Alabama Republican Party.

Kammerdiener’s testimony was, at best, equivocal on the arrangement. Under questioning from lead prosecutor Matt Hart, the consultant read emails between himself and Brett Buerck, his partner in the firm, in which the men complained about the prices Craftmaster charged.

“Because I am a greedy bastard, I would rather us swallow our pride and also make a lower profit margin in order to keep the client rather than getting black-balled in a state because we think the printer is making too much and we don’t like being forced to use them,” Kammerdiener wrote in an Oct. 1, 2011 email to Buerck.

Buerck replied to Kammerdiener that “we need to co-exist” with Craftmaster. “I think if Mike knows there’s more opportunities to make money his greedy (sic) will be our ally.”

On the stand Thursday, Kammerdiener said he “certainly believed” the Alabama Republican Party wanted them to use the printer. He agreed with statements from Hart that they had "no other options" besides Craftmaster, and that “no one else in the world” could force them to use the printer. Kammerdiener did not say why he believed there were no other options, and was not asked his reasons by either side.

Hubbard’s attorneys have maintained Craftmaster did good work and saved the party money. Under cross-examination from defense attorney Lance Bell, Kammerdiener said their work for the Alabama Republican Party began in 2005 when Twinkle Andress Cavanaugh chaired the party, and that he did not remember any problems with the printers.

Craftmaster president Barry Whatley testified Wednesday that he felt Majority Strategies was squeezing them on their profit margins.

Testimony for the rest of the morning focused on charges that Hubbard in 2013 approved and later voted for budget language that would have benefitted American Pharmacy Cooperative Inc. (APCI), with whom he had a consulting contract. The language would have created a pharmacy benefit manager (PBM) for Medicaid that could save money. Prosecutors say the language would have made APCI the only entity that could make a winning bid.

Both House Ways and Means General Fund budget chairman Steve Clouse, R-Ozark, and Norris Green, the former director of the Legislative Fiscal Office, said they attended a meeting on the language, suggested by APCI lobbyist Ferrell Patrick. Both said the discussion included ideas that the PBM could save Medicaid $10 million. That money, they said, could have gone to the state’s court system.

Clouse said he had a concern with the proposal as it affected Medicaid, which gets more than two-thirds of its funding from matching funds from the federal government.

“Even if they could save $10 million, I wasn’t sure we would be able to move $20 million from Medicaid, which would cost us $20 million with the two-to-one match,” Clouse said.

The budget chairman testified during cross-examination from defense attorney Bill Baxley that Hubbard did not “force” him to add the language to the budget. But on redirect from W. Van Davis, the acting attorney general in the case, Clouse said he did not become aware of Hubbard’s relationship with APCI until after the session ended. Asked if he considered it a conflict of interest Hubbard’s part, Clouse said “probably so.”

The APCI language came out of the final part of the budget, and Hubbard’s defense team argues that if the speaker wanted to keep it, he could have instructed members of a conference committee that developed the final version of the budget.

Clouse was a member of that committee and testified Thursday to the speaker’s power to shape legislation, but neither prosecutors nor the defense asked him any questions about requests Hubbard made or did not make about the budget in conference committee.

Past and current Medicaid officials testified Thursday afternoon that the PBM language caught them by suprise, and that they had grave concerns with the proposal.

“We had concerns it was creating a monopoly for one group to obtain PBM business for the state,” Medicaid Commissioner Stephanie Azar said under questioning from Hart.

Officials said the language raised political, organizational and business concerns.

“Doing a PBM, you reduce the amount of money to pharmacies and limit access,” said Dr. Don Williamson, the president of the Alabama Hospital Association who in 2013 was State Health Officer and leader of an effort to transition the state’ Medicaid program to a managed care model.  “That’s a weighing factor.”

Williamson testified that he and Blaine Galliher, then Gov. Robert Bentley’s legislative liaison, tried to stop passage of the budget on the night that Hubbard voted for it. The next day, he said, he met with Hubbard who said he had been “furious” at learning about the language and promised not to appoint then-Rep. Greg Wren, R-Montgomery, to a committee that would resolve differences between House and Senate versions of the budget. Wren had introduced the language.

Baxley, suggesting that Wren was the main mover of the language, said that Hubbard’s efforts showed that Hubbard had no intention to benefit from the language.

“The speaker decided he would take care of it, or agree to it,” the attorney said to Williamson on cross-examination.

Azar and Williamson remembered Hubbard’s stated plans after the meeting. Williamson testified that Hubbard said he would work to get the PBM language out of the budget. Azar only said that Hubbard directed them to meet with Wren.

Both testified that Wren was angry at the attempts to remove the language.

“Mr. Wren became almost extraordinarily angry, and just yelling the language was his, he had written the language,” Williamson said. “Basically we said, ‘We can’t live with this.’”

Wren pleaded guilty to a misdemeanor ethics charge on April 1, 2014 and resigned his seat. He said in his plea agreement that APCI had helped him secure a $24,000 consulting contract with a company APCI partially owned. In the plea agreement, Wren said Hubbard endorsed the “exclusive language and directed staff to add it to Medicaid’s section of the General Fund budget,” after meetings with Wren on the subject.

Azar testified that mediation from Sen. Greg Reed, R-Jasper resolved the matter to Medicaid's satisfaction.

The trial will continue Friday, with a number of officials from APCI and southeast Alabama scheduled to testify.

Hubbard faces 23 counts of using public offices for private gain. Conviction on any charge could leave him facing up to 20 years in prison and a $30,000 fine. It would also mean his automatic removal from office.