Financial Review of Mike Hubbard's Tenure As Party Chairman Stirs Up Discord In The Alabama GOP

Mike Hubbard

The Republican Party takeover of the Alabama Legislature in 2010 might have come with the aid of financial chicanery. A review of the party's finances during that time period has uncovered questionable transactions and led to discord in the state GOP hierarchy.

Current chairman Bill Armistead ordered the review--he calls it an audit--focusing heavily on the actions of his predecessor, Mike Hubbard, now speaker of the Alabama House of Representatives. The review unearthed at least one instance where Hubbard appears to have used GOP dollars for his personal gain, according to a report last week at al.com.

What else did the review find, and what does it mean for the future of the Alabama Republican Party? It probably is too early to answer those questions, but this much is clear: The state GOP is experiencing a rancorous split, with Armistead and his associates on one side and those loyal to former Republican Governor Bob Riley (which includes Hubbard and state Senate leader Del Marsh) on the other.

At the heart of the conflict might be the rise of Bob Riley's 2014 PAC, which is competing for political donations with the Alabama GOP.

Some curious journalism surrounds the story. Reporter Charles J. Dean and al.com deserve credit for breaking one of the biggest state political stories of the year. But why did they break it on the day before Thanksgiving, typically a slow readership day? And how will al.com follow up, considering its long-standing support of the Riley political machine?

For now, the story shines light mostly on a printing contract that raises questions about the way Mike Hubbard conducts business. From the al.com report:

In 2010, the Alabama Republican Party negotiated a deal with a Florida company to design hundreds of glossy and colorful campaign flyers for GOP candidates seeking seats in the Legislature. 

The contract with Majority Strategies of Ponte Vedra Beach, Florida was for $848,687. 

Once the deal was signed, Majority Strategies then subcontracted out the printing, shipping and postage costs of the flyers to another company: Craftmaster Printing of Auburn.

One of the shareholders in Craftmaster Printing is Mike Hubbard. This is not the first time the press has shined light on Hubbard's tendency to mix politics with business. Editor Paul Davis spelled it out in a 2010 piece for The Tuskegee News:

Since he became Republican Party chairman in February 2007, [Hubbard] has paid from party funds $176,826 directly to his own companies. 

Huge payments to Craftmaster Printers date back to the days when the company was nearly bankrupt. He is a major Craftmaster stockholder, along with former AU Coach Pat Dye. 

Since 2002, his companies have received at least $1,494,566 from the coffers of the State Republican Party.

No wonder Armistead thought it would be wise to examine Hubbard's handling of the party's purse strings.  How has Hubbard reacted to news of the financial review? Not well, according to al.com:

In a recent interview with the Birmingham News/al.com, Hubbard saw the financial review and after reviewing it a few moments, tossed it back across the table.

What was Hubbard's best effort at an explanation? Well, he claims to have made a personal profit of a little more than $9,000 on the deal. This is the same Mike Hubbard who has trumpeted the federal prosecution of former Democratic governor Don Siegelman, who made zero personal profit on the transaction in question.

For now, we seem to have a stalemate in the Alabama GOP. Hubbard and Marsh say they have done nothing wrong, and they want Armistead to release the financial report. Armistead says the state GOP Executive Committee has not agreed to release the report.

Meanwhile, rumors persist that the Riley machine might try to force out Armistead as party chair. Will Armistead have sufficient ammunition to fight back? Well, you have to wonder if Hubbard's actions might eventually attract the attention of federal prosecutors. We already have noted that the speaker could be in trouble if federal laws and state ethics laws were applied to him the way they have been applied to two former governors--Siegelman and the late Guy Hunt.

Bob Martin, of the Montgomery Independent, showed in a series of articles last fall that Hubbard's "boss" style of politics goes well beyond his printing company. Martin showed that taxpayers were helping pick up the tab for Hubbard's book, Storming the State House. And it doesn't end there. Writes Martin:

Hubbard is also president of the Auburn Network, which is owned by IMG College and was recently purchased from ISP Sports. State records and other reports I have seen show that since State Fiscal Year 2008, over $4 million in state funds have been spent on advertising with the Auburn Network or its parent company. This is the firm which has the contract to broadcast Auburn football games and other Auburn sports events . . . and, of course, sell advertising for those events. 

It is the observation of most Goat Hill regulars that Speaker Hubbard has a virtual iron grip on the passage or failure of legislation before the House. Therefore is there any state agency with legislation and budgets before the House who would not want to please the Speaker by patronizing his business? I doubt it.

Mike Hubbard claims that he wants Armistead's financial review to be released. But can Hubbard's actions withstand serious scrutiny? Perhaps we soon will find out.