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A spirit that is not afraid

Rep. Steve Clouse: Hubbard 'probably' had a conflict of interest

On Wednesday Deputy Attorney General Matt Hart and Acting Attorney General W. Van Davis continued questioning witnesses in the felony ethics trial of Alabama House Speaker Mike Hubbard.

Taking the second today were Majority Strategies owner Randy Kammerdiener and state Rep. Steve Clouse.

Kammerdiener is a part owner of Majority Strategies, a political consulting firm in southern Florida. Hubbard is accused of using Majority Strategies to direct business and financial gain to his own Auburn-based printing business Craftmasters Printing.

Kammerdiener said he felt like Majority Strategies had no other choice but to use Craftmasters when printing campaign direct mailers and other campaign materials for the Alabama Republican Party during the 2010 and 2014 election cycles.

Hubbard is charged on 23 counts of using his offices as Alabama GOP chairman and House speaker to benefit himself and his businesses financially. Four of those counts relate to Hubbard using his office as chairman to direct business to Craftmasters.

The prosecution asserts Craftmasters received upwards of $700,000 from the deals Hubbard made as GOP chairman with Majority Strategies. 

The defense says Hubbard's company didn't profit from the arrangement, the party used Craftmasters because they did good work, and the arrangement was cheaper for the party.

But when questioned by Hubbard's defense attorney Lance Bell, Kammerdiener said Hubbard never directly told him he had to use Craftmasters for the firm's printing and mailing services.

"I never had a specific conversation with Mike Hubbard telling me I had to use Craftmasters," Kammerdiener said. He was never clear if he just had a feeling he needed to Craftmasters, or if he was actually forced to by the party or Hubbard.

His emails seem to tell a different story, though.

"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 money and we don't like being forced to use them," Kammerdiener said in a 2011 email to his business partner Brett Burek.

Kammerdiener testified that he "certainly" felt the party wanted Majority Strategies to use Craftmasters for their printing. He said they agreed to use Craftmasters even though their profit margin was significantly less than it would have been otherwise.

"Per Mike, we're printing at Craftmaster and just passing the actual charges on to you all," Kammerdiener said in another email to former Alabama GOP Political Director Michael Joffrion.

According to Kammerdiener, after they finished the 2010 election season Hubbard told them there would be more opportunities for Majority Strategies to work in Alabama again. Kammerdiener said they wanted to make more money in the state.

"I think if Mike knows there's more opportunities to make money his greedy will be our ally," Kammerdiener's business partner Burek said in a reply.

According to the defense's cross examination of Kammerdiener, Majority Strategies had used Craftmasters before Hubbard became state party chairman. In 2006 the firm also used Craftmasters under former chairwoman Twinkle Andress-Cavanaugh.

"You were trying to reach out and secure a relationship like you had with the previous chairwoman," Bell questioned.

In 2010 with the help of Majority Strategies Hubbard, the Alabama Republican Party was successful in flipping the Alabama Legislature from Democratic control to Republican control for the first time in 136 years.

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Hubbard has been called the "general" of that operation.

Majority Strategies helped as many as 15 other states do the same, according to Kammerdiener. Kammerdiener said in emails that the only way they could work in Alabama was if they used Craftmasters printing.

Hubbard is also accused of taking something of value from four principals.

Principals are businesses, associations, firms or persons who employ lobbyists in Montgomery. The special prosecutors say Hubbard signed several contracts with principals ranging from $5,000–$12,000 per month.

During the 2013 legislative session, Hubbard's Auburn-based media and advertising firm Auburn Network Inc. was receiving checks for $5,000 per month from a pharmacy association called the American Pharmacy Cooperative Inc.

According to the defense, Hubbard's contracts were for media consulting outside of the state. The state says Hubbard voted on pro-APCI language in the 2014 fiscal year General Fund budget despite the conflict of interest.

The language in the budget would have essentially allowed for a monopoly if the state pursued a sole pharmacy benefits manager for the state's medicaid system. APCI represented a group of more than 30 percent of the state's small, independent pharmacists.

Those pharmacists were afraid the state would pursue a deal with a commercial pharmacy benefits manager that would have effectively shut them out of the medicaid pharmaceuticals business.

Instead, the prosecution says APCI's lobbyist Ferrell Patrick convinced Hubbard and other legislators to insert the pro-APCI language into the bill to flip the favor to their organization.

Rep. Steve Clouse, chairman of the House General Fund Ways and Means Committee, said the vote was "probably" a conflict of interest when he testified today for the prosecution. He said he didn't know the speaker was on the payroll of APCI when the pro-APCI language was added to the budget.

The defense maintains the language was "only a few line" in a 100-plus-page budget that "affects every department in the state except for education."

During today's cross examination of former Legislative Fiscal Office Director Norris Green by defense attorney Bill Baxley, Norris testified that the final budget that passed did not have the language in it.

Green said Hubbard never directed him personally to add the language to the bill, though he did say emails came to him from the speaker's office with directions to add the language to the bill.

Hubbard did vote on the House version of the bill before the final version was passed by the Senate. The defense says Hubbard worked to have the language removed in conference committee when he found out about the issue.

Emotional testimony from Hubbard's former chief of staff Josh Blades confirmed that his staff advised him not to vote on the budget, but Blades said Hubbard voted anyway because abstaining would have "raised too many red flags."

According to Clouse's testimony today, Hubbard also encouraged Gov. Robert Bentley's office and the office of the Department of Commerce to push for the relocation of aircraft refurbisher Commercial Jet to the Dothan, Ala. area.

At the time Hubbard was on the payroll of the Southeast Alabama Gas District. SEAGD had financial interest in having Commercial Jet relocate to the area — the more jobs and residents living in the area, the more natural gas they would sell.

At one point, Hubbard was receiving $12,000 a month from SEAGD.

The defense's questioning asserts Hubbard was only doing his job advocating for economic development as a state official.

Mary Lawrence, a health and social services analyst with the Legislative Fiscal Office, also testified this morning along with LFO Assistant Director Rachel Riddle. Lawrence and Riddle testified they attended a meeting about the pro-APCI language.

Riddle testified Ferrell made under-handed comments that the speaker sent them and they had already discussed the language. The defense's questioning implies Hubbard did not directly lobby to insert the language into the bill.


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