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A spirit that is not afraid

Updated: First day of Hubbard's ethics trial complete

Updated at 5:45 p.m.

The legal teams, led by Deputy Attorney General Matt Hart and defense attorney Bill Baxley, conducted opening arguments in the felony ethics trial of Alabama House Speaker Mike Hubbard.

The court also heard the testimony of Hubbard's two long-time business associates and GOP colleagues, but they were called by the prosecution.

The prosecution told the jury Hubbard used his positions as a public official to solicit personal gain. Hubbard and his businesses made nearly $2.3 million off of his state positions, according to prosecutors.

Baxley, representing the defense, told the jurors today that many of the relationships the prosecution highlighted and charged Hubbard with were personal relationships that existed before Hubbard became speaker. In his opening argument, he also told the jurors many of the relationships originated because of Hubbard's media experience not because of his title as House speaker.

Hubbard was indicted by a Lee County Grand Jury in October 2014 on 23 charges of violating the state's ethics law. Each charge was a felony indictment, and one guilty verdict on any of the charges could carry a sentence of up to 20 years or a $30,000 fine.

Many of the charges originate — according to prosecutors — from a loss of income and financial difficulties Hubbard faced when IMG bought the athletic media rights from International Sports Properties.

Hubbard served as a senior executive for ISP after the company bought the athletic media rights from his company, Auburn Network Inc. IMG bought the rights from ISP in 2010, and Hubbard was terminated from the company in January 2011.

He received a severance package that lasted until later in the year.

The state's prosecutors allege that Hubbard received $733,848 from a group of high-profile lobbyists and major businessmen in the state, including more than $5,000 a month from American Pharmacy Cooperative Inc., more than $10,000 a month from the Southeast Alabama Gas District for "financial development", more from a CV Holdings subsidiary Capitol Cups and another salary from Edgenuity, a computer education software company.

According to Hart's opening statement, Hubbard had private meetings with many of the lobbyists and then lobbied himself before the executive and the Legislature for the benefit of the companies from which he was receiving financial gain.

"[All the factors when voting on a bill] need to be considered with a true heart for the people, but guess what shouldn't factor into it: $5,000 a month going into your pocket," Hart told the jury in his opening statement.

Hart and the prosecution allege that Hubbard voted to give the APCI essentially a monopoly as a pharmacy benefits manager, even when the ethics law mandated that he should have abstained from those decisions.

The part of the budget that contained the vote in question never passed, as Hubbard had it removed when he found out others knew about his contract with APCI. The portion was removed from the final bill before being passed by the Senate, but not before it passed the House.

Former Alabama Republican Party Executive Director John Ross was the first witness called by the prosecution to take the stand. Ross served as the executive director under Hubbard during Hubbard's term as chairman from 2007–2011.

However, Ross later went to work as a lobbyist in the Legislature. Ross was working with Hubbard and another lobbyist for the APCI Ferrell Patrick when he found out Hubbard was on the payroll of the APCI.

Ross and the second witness Tim Howe — another former GOP executive director — testified they terminated all business relations with Hubbard when they found out he had the ties to APCI.

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Howe also testified to the court that his firm, the Howe Group and its subsidiary SRM Media and Advertising, served as a go-between from the state GOP's account and Hubbard's advertising firm Network Creative Media.

NCM placed ads for several 2010 campaigns, but Howe's group received the checks from the GOP first, took a 5 percent commission, and then passed the money on to Hubbard's group Network Creative Media.

Before lunch defense attorney Bill Baxley called the prosecution's opening statement baseless and told the jury that Hart left out several exceptions to the ethics law that allowed for pre-existing business and relationships.

However, Baxley also said that Hubbard did nothing wrong, and that Hubbard would not even need the exceptions to be acquitted.

"You'll be the ones that decide [if Hubbard is guilty], not Mr. Hart or the attorney general's office," Baxley said.

Hubbard became chair of the Alabama Republican Party in 2007. He was later replaced in 2011. Four of the prosecution's charges allege while he was serving as chairman, he directed thousands of dollars worth in business to his printing company, Craftmasters.

Hubbard reached out to Ross to serve as the director and was effectively Ross' boss during his time there. According to Ross, the state party used Craftmasters printing for materials during the 2010 election season and invitations to special events.

"I knew that he had some percentage ownership in Craftmasters printing," Ross said. "He told me that we would get better service and we could do it for cheaper if we were able to use (Craftmasters)."

Ross also testified that Hubbard told him to use another campaign firm out of Florida, Majority Strategies, to develop direct mailers for the campaign season.

Majority Strategies used Craftmasters for the printing of those mailers. Ross also testified that Network Creative Media, a subsidiary of Hubbard's Auburn Network Inc., facilitated the purchase of radio and TV air time during the election season.

During defense's cross examination of Ross, he said that the state party used Craftmasters before Hubbard became chair. Baxley asked Ross if he knew Hubbard donated $40,000 of his own money to fund the campaigns in 2010. Ross confirmed he knew.

Another set of five charges allege that Hubbard solicited over $1 million in investments from Alabama movers and shakers using the mantel of his office as speaker of the House for his Auburn-based printing company Craftmasters.

"Hubbard sent money to his businesses, and that's what counts," Hart said. "You can't use that power [as speaker] to send money to your businesses. … Mr. Hubbard asked people things he was not allowed to ask, and he took things he wasn't allowed to take."

The ethics laws prevent public officials and employees from taking things of value from lobbyists or people who hire lobbyists known as principals.

"There's no error here … when the evidence comes from the witness stand and from the exhibits ... that evidence is going to show without a reasonable doubt that this guy knew exactly what he was doing," Hart said. "He should be held accountable just like any other citizen."

The prosecution plans to call former Gov. Bob Riley, his daughter Minda Riley Campbell and Gov. Robert Bentley to testify in the case. According to Baxley, they're happy the state chose these witnessed.

"What Mr. Hart said and what I say is not evidence," Baxley said. "Thank goodness they're calling these witness. We want you to hear what they're saying. If they don't call these people, we will."

Riley was a longtime mentor to Hubbard.

Judge Walker swore in 15 members of the jury at 10 a.m. this morning and reiterated instructions not to speak to one another or anyone else about the case.

Gibbs began the day with a motion to limit. He asked Judge Walker to prevent the testimony of several witnesses on the defense's list. According to Gibbs, several of the defense's witnesses were also called for the pretrial hearings concerning allegations of prosecutorial misconduct.

Gibbs said the potential witnesses were employees of the Alabama attorney general's office, and they were only being called again to call the state's conduct into question. Several attempts to dismiss and delay the case for state misconduct have been denied by Judge Walker.

The defense alleged Hart, chief of the special prosecutions division, improperly influenced the Lee County Grand Jury responsible for indicting Hubbard in 2014.

"Conduct of the state is not an issue in this trial," Gibbs said.

Walker told the legal teams that any issues concerning an individual witness could be brought to him the day before the witness was set to testify. The state and the defense legal teams both agreed to disclose to one another a day prior whom they would be calling to testify.

The trial will continue tomorrow at 9 a.m. in Opelika. The first witness is expected to be Barry Whatley, president of Auburn Network Inc.


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