Alabama House Speaker Mike Hubbard indicted

Ending months of investigation, accusation and speculation, House Speaker Mike Hubbard Monday surrendered to authorities Oct. 20 after being indicted on 23 counts of using public office for personal gain.

If convicted, Hubbard faces a maximum penalty of 20 years imprisonment and fines of up to $30,000.00 for each count, which are all Class B Felonies.

The sweeping indictment stems from more than a year of jury proceedings that became the great known unknown in Montgomery political circles. The Auburn Republican is charged with using his role as House Speaker and prior position as head of the Alabama Republican Party to steer business to companies under his control and solicit investments in those firms.

The Speaker, who helped engineer the Republican takeover of the state Legislature in 2010, is also accused of soliciting help with his business from some of the most prominent names in the state. The list includes former Gov. Bob Riley, now a lobbyist; his daughter Minda Riley Campbell, a prominent lobbyist; Billy Canary, Business Council of Alabama president, and Jimmy Rane, owner of the Great Southern Wood Company, Auburn trustee and a major political contributor.

Hubbard has said for months that the charges are politically motivated, a sentiment he repeated in a statement Monday.

"If there was any doubt by anybody that this is a political witch hunt, it became crystal clear today when these allegations were brought two weeks before an election," the statement said.

The Alabama Attorney General's Office did not have an immediate comment Wednesday on the indictment. The indictment appears to have been signed Friday by the grand jury.

Mark White, an attorney representing Hubbard, said the Speaker was allowed to turn himself in.

"This is a day where finally we can start beginning to tell our story," White said. "The speaker is confident, comfortable and ready to go."

The charges facing the Speaker fall broadly into four areas.

Craftmasters: The indictment accuses Hubbard, who served as chairman of the Alabama Republican Party from 2007 to 2011, of steering business to and soliciting investments in Craftmasters, an Auburn-based printing firm in which Hubbard owns an interest.

According to an audit commissioned by the Alabama Republican Party, the Alabama GOP in 2010 paid a total of $800,000 to Craftmasters. The party paid $83,524 to Craftmasters directly. Another $752,262 was paid to Craftmasters by Florida-based Majority Strategies, a direct mail firm that the party hired to do work.

The audit report led to sharp divisions between Hubbard and Bill Armistead, the current party chairman, who ordered the audit. Armistead, who initially kept the report under wraps, said Hubbard did not do anything illegal with the Craftmasters' contract, but that he felt it was improper for the party to enter the contract without the GOP steering committee being informed. Hubbard, however, said he wanted the report circulated, insisting that the Craftmasters deal saved the party money.

The attorney general's office subpoenaed the audit and other party financial records in December, 2012. Armistead, who had said he did not want to "embarrass" Hubbard, released the report after the subpoena came in.

Hubbard, along with Gov. Robert Bentley and Lt. Gov. Kay Ivey, backed Montevallo attorney Matt Fridy in an attempt to unseat Armistead as party chairman in February, 2013. Fridy and his supporters said fundraising had declined under Armistead's leadership; Armistead said the challenge was punishment for commissioning the audit report. Armistead ultimately prevailed.

In addition, the indictment accuses Hubbard of soliciting or receiving $600,000 in investments in Craftmasters from four individuals: Great Southern Wood's Rane; Robert Burton, CEO of Hoar Construction; former Sterne Agee CEO James Holbrook and BCA board member Will Brooke. Hubbard is also accused of soliciting an investment in the business from Montgomery lobbyist Dax Swatek.

Medicaid: The indictment accuses Hubbard of voting for a version of the FY 2014 General Fund budget that included language that would have made Bessemer-based American Pharmaceutical Cooperative, Inc. (APCI) virtually the only firm that could obtain a pharmacy benefit manager (PBM) contract from the Alabama Medicaid Agency. That language was ultimately struck out.

The Auburn Network, a company owned by Hubbard, had a consulting contract with APCI. Hubbard said in 2013 the contract was focused exclusively on out-of-state issues.

Former Rep. Greg Wren, R-Montgomery, who inserted the language into the budget, said in a plea deal in April that"subsequent" to Hubbard endorsing the language, Wren was told about Hubbard's "ongoing financial relationship" with APCI. "The Speaker of the House had not informed Wren, or others Wren interacted with, in those meetings, of that ongoing relationship," the agreement says.

Wren. later received a $24,000 consulting contract from a firm partly owned by APCI. As part of his deal, Wren pleaded guilty to a misdemeanor ethics charge, resigned from his House seat and cooperated with investigators.

Consulting contracts: The Auburn Network had a $12,000 a month consulting contract with the Southeast Alabama Gas District, aimed at supporting marketing efforts. The contract won the approval of the Alabama Ethics Commission in 2012, but the indictment says Hubbard used his office to obtain payments from SEAGD, and represented them before the Governor of Alabama and the Alabama Department of Commerce. The indictment also saysHubbard's firm represented CV Holdings before the Governor and Department of Commerce, apparently in consulting postures.

The Speaker canceled the contract with SEAGD in August, 2013. The relationship between Hubbard and CV Holdings is not clear.

The indictment also accuses Hubbard of "soliciting or receiving" checks from Edgenuity, an online education firm.

Clients: Hubbard is accused of using his official position to obtain help from former Gov. Riley, the BCA's Canary and BCA Board member Brooke to help solicit new clients for the Auburn Network. In addition, Hubbard is accused of obtaining financial advice regarding Craftmasters from Brooke, and of seeking "consulting assistance and support" for the Auburn Network from Minda Riley Campbell.

Attempts to reach Gov. Riley and Canary Monday evening were unsuccessful.

Neither Hubbard nor White addressed the specifics of the charges Monday, but both vowed to fight.

"Mike Hubbard expressly and emphatically denies any wrongdoing. We will vigorously defend against these baseless charges," White said in a statement. "Mike has used his office appropriately, and he has worked to advance the cause of ethics reform in this state; in fact, ethics reforms which had been sought for decades were passed almost immediately after Mike's colleagues selected him as their leader."

Not surprisingly, political reaction to the indictment Monday fell down party lines. Armistead released a statement saying that "no one needs to rush to judgment."

"Right now, all we have is a list of charges," the statement said. "We don't have the Speaker's position on these matters and to speculate about them would be unfair to him and an exercise in futility, since we do not know whether any of these charges are true."

Micky Hammon, the House Majority Leader, released a statement saying that since winning the Legislature in 2010, Republicans had strengthened the state's ethics laws.

"Corruption at any level of government will not be tolerated, but an indictment is not a determination of guilt," Hammon's statement said. "This is simply the beginning of a long judicial process, and at its end, regardless of verdict, justice will be done."

However, House Minority Leader Craig Ford, D-Gadsden, said the indictment "shakes people's faith their elected leaders."

"It's obvious this is not politically motivated, because it is a Republican Attorney General leading the investigation," the statement said. "It is sad to see that, in less than four years, our leaders have embraced the culture of corruption that they ran against in 2010."

Rumors about the Lee County grand jury have swirled for months in Montgomery, aided in part by Hubbard's retention of White last year to fight what he described as "false, misleading or libelous claims" in the media. According to campaign finance records, Hubbard's campaign paid $231,000 in legal fees through the end of August.

Hard evidence of the grand jury's activities was absent until April, when Wren made his plea agreement.

A few weeks after Wren's plea, Rep. Barry Moore, R-Enterprise, was indicted on perjury and false statement charges. The indictment was based on conversations Moore had with attorney Josh Pipkin, a challenger for his House seat, in June, 2013. On a recorded conversation, Moore told Pipkin that Hubbard had threatened to hold up the expansion of an electronics firm in the district if Pipkin challenged Moore for his House seat, and that Hubbard would bring "holy hell" on Pipkin if he ran.

Moore denied making those statements in testimony in January. The state representative's attorneys say the statements were "materially true" and have mounted challenges to the existence of the grand jury, which were rejected by the Alabama Supreme Court last month. Moore's trial is scheduled to begin Oct. 27, with Pipkin as the state's key witness.