Summary
The big question in the final days of Alabama’s runoff election for the GOP gubernatorial nomination isn’t just who is going to win the tight race between Bradley Byrne and Robert Bentley. It’s the mystery of who’s behind a largely bogus TV ad attacking Byrne.
A group calling itself the “Conservative Coalition for Alabama” is airing an ad that falsely accuses Byrne of a host of offenses. It says Byrne “took a 500 percent pay raise” (that’s misleading); steered government contracts to “cronies” (there’s no evidence of that); lost millions of dollars in the state’s prepaid college savings plan (so did nearly all other state plans); and ran up the taxpayers’ tab drinking “expensive wines” (false) and traveling in “style” (not entirely true).
Byrne suspects that the Conservative Coalition is a front group for the Alabama Education Association. He has good reason. AEA Executive Secretary Paul Hubbert (who also is co-chairman of the state Democratic party) admitted that he used “True Republican PAC” as a front group to attack Byrne during the June 1 primary fight.
For a quick lesson in Alabama politics — and the shortcomings of campaign finance law — read on.
Analysis
The Conservative Coalition for Alabama, which ran its first ad June 24, started running a second one July 1 titled “Reformer” — which seeks to cast doubt on Byrne’s claim to being a “reformer.” It distorts the truth in every claim.
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Conservative Coalition for Alabama TV Ad: “Really?”
Announcer: “Reformer? Really? When Bradley Byrne became School Chancellor, he took a 500% pay raise. He lost millions in the PAC College Fund. Gave big no-bid contracts to his political cronies. Gave big legal contracts to his old law firm. And Byrne traveled in style at tax payers expense. He even stuck us with a tab for his expensive wine. With his record how can you really trust Bradley Byrne?
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‘500% Pay Raise’
Let’s start with the pay raise. The ad says, “When Bradley Byrne became school chancellor, he took a 500 percent pay raise.” Here are the simple facts behind the eye-popping number: Byrne resigned as state senator in 2007 to head the Alabama Department of Postsecondary Education, so his state salary went from $30,410 as a part-time legislator to $248,325 as a full-time chancellor. That’s actually a 700 percent raise. But the ad fails to note that Byrne had to give up his full-time law practice in order to take the government job.
What’s particularly deceptive about this claim is that Byrne has a legislative record of refusing pay raises. In the Alabama legislature, Byrne and Bentley voted against a 62 percent pay raise for state legislators in 2007. The pay hike bill passed anyway, but Byrne was one of seven lawmakers who refused to take the money — which worked out to $18,790 a year. (Bentley accepted the pay raise, and has been criticized for it by Byrne.)
Contracts for ‘Cronies’
OK, now how about that charge that Byrne “gave big no-bid contracts to his political cronies.” The ad — in the usual small print on the bottom — cites a contract between the Department of Postsecondary Education and the law firm of Hand Arendall. True Republican PAC, the teacher-funded group behind the attacks on Byrne during the primary, made a similar charge and provided more information on its website, The Real Bradley Byrne.
TheRealBradleyByrne.Com: “He handed out more than $200,000 in no-bid legal fees the Birmingham law firm of Hand Arendall, LLC in 2008. The son of Senator J.T. “Jabbo” Waggoner – Byrne’s political mentor and ally – is a lawyer at Hand Arundel and billed the state at least $100,711 for legal services.
It is true that Hand Arendall received a $200,000 contract from the department approved by Byrne in April 2008. And it is true that the contract was not bid, because it was a professional contract not subject to public bidding requirements.
But here’s the context that the ad does not provide, courtesy of department spokeswoman Martha Simmons: Hand Arendall, one of Alabama’s biggest law firms, “has worked with the Department of Postsecondary Education and the State Board of Education since 1996, 11 years before Bradley Byrne became chancellor and before Mark Waggoner was employed at the firm.” Did Waggoner bill the state for $100,711? The Department of Postsecondary Education’s general counsel says Waggoner’s name would appear on some of the bills, but that contracts are with the law firm, not its individual attorneys.
More Flimsy Cronyism Charges
That’s not the end of the cronyism charges: The ad also claims Byrne “gave big legal contracts to his old law firm.” The ad cites a May 12, 2009 article in the Birmingham News about the hiring of a single lobbying firm to represent all of Alabama’s two-year colleges. As chancellor, Byrne did have a role in the selection of the Jones Walker firm for the contract. Jones Walker however was not his old law firm. Byrne had previously worked for the Miller Hamilton firm from 1982 to 1995. The two companies merged in 2008 — more than a decade after Byrne left. It’s also worth noting that Jones Walker won the contract through a competitive process. The article explains:
Birmingham News, May 12, 2009: Byrne’s office received seven proposals for the lobbying contract. A committee of college presidents ranked them and forwarded the top three to the chancellor, for his selection. The deal with Jones Walker was approved by the Legislative Contract Review Committee in January.
Lost Millions
The ad claims that Byrne “lost millions in the PACT College fund.” It’s true that Alabama’s Prepaid Affordable College Tuition Program, known as PACT, lost money. But Byrne didn’t run the program. According to the official PACT website, “The PACT Program is administered by the Office of State Treasurer Kay Ivey.” Byrne, as chancellor, was among 10 members of the PACT board of directors, which oversees the fund.
The program aims to cover college tuition payments for students who prepay college costs, protecting students and their families from future tuition increases. The ad cites a March 3, 2009 Birmingham News story that said PACT lost nearly half of its value in an 18-month period, declining from $899 million in September 2007 to $484 million in March 2009.
Three reasons were cited: tuition rose faster than expected, more students were enrolling in state schools, and the stock market collapsed. About 20 percent of the loss — or roughly $83 million — stemmed from stock market loses, the paper said. A chart released that day by the Alabama Department of Treasury shows the 20 percent drop. But what investor didn’t lose money in the market? The question is: was Byrne to blame and what impact did the program’s poor investment results have on students?
The newspaper article cites a Birmingham investment manager saying he has steered his clients away from the program for 15 years because its investment strategy is “too aggressive.” So, perhaps Byrne missed an opportunity to recommend a change in investment strategy, which he might have done as a member of the board. On the other hand, Alabama was not alone. The New York Times reported in October 2009 that 16 of the 18 prepaid tuition programs in the country were in the red because of rising tuition costs and poor investment returns. As for the impact on Alabama’s students, Byrne in March 2009 waived tuition increases for PACT students through the 2012 school year.
‘Traveled In Style’
Lastly, there is the charge that “Byrne traveled in style at taxpayers’ expense. He even stuck us with the tab for his expensive wine.” We obtained the travel vouchers through a public records request for the three trips mentioned in the ad. Taxpayers did not pay for the $52 bottle of Chianti that Byrne and others had at dinner in Washington, D.C., during a trip to advocate for the state’s two-year colleges. The travel vouchers show Palmer Hamilton, a lobbyist for Jones Walker who dined with Byrne, paid for the wine, and Hamilton told us the state did not reimburse him for it. Byrne also traveled to West Virginia to participate in the Southern Governor’s Conference. Both were typical state business trips.
But traveling to Hawaii in January? Busted.
Byrne was part of Governor Riley’s delegation to lure new businesses to Alabama at an event called, “Sweet Home Alabama Goes To Maui.” An editorial in the Huntsville Times questioning the value of the trip — which included a golf tournament sponsored by Mercedes-Benz — said Byrne gave a speech to industry officials on the state’s educated work force. The editorial called the trip “puzzling.” For better or for worse, the trip wasn’t all paid for by taxpayers. News accounts at the time said that corporate sponsors and the Alabama Development Office split the cost.
AEA Supports Sparks, Not Bentley
Byrne has fired back at the shadowy group that aired the attack ad by taking aim at the AEA and Bentley.
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Bradley Byrne for Governor TV Ad: “Republicans Speak Out”
Multiple speakers: “We don’t support AEA and the Democrats, and they support Robert Bentley. AEA Democrat bosses are trying to steal our Republican primary. They’re for Bentley. AEA is attacking Bradley Byrnes for him. That’s why they spent millions of dollars to try to destroy his reputation. Robert Bentley sure does not act like a Republican. He took $10,000 dollars of their money. That doesn’t sound conservative to me. He turned a blind eye to AEA double dipping. And that bothers me. Alabama needs a leader. Bentley isn’t. I’m voting Byrne.”
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The latest ad, “Republicans Speak Out,” which first aired July 5, says the Alabama Education Association and the Democrats “support Robert Bentley” and they are “attacking Bradley Byrne for him.” It is not true that the AEA supports Bentley, although the union’s attacks during the primary arguably helped Bentley by forcing a runoff election.
Alabama state campaign finance records show that Bentley received $2,500 in contributions from Alabama Voice of Teachers for Education (A VOTE) — the teachers’ PAC – in 2008 and a $1,000 in-kind contribution from the AEA in 2003, but nothing during his race for governor. Rather, the evidence is overwhelming that the AEA supports Democratic nominee Ron Sparks, giving his gubernatorial campaign $210,500, campaign records show. (In Alabama, there are no campaign contribution limits — except for corporations.)
As for Byrne’s claim that AEA is behind the attack ad? Nobody knows for sure, at least not yet. It could be gambling interests, given Byrne’s strong anti-gambling position, or maybe both (and others?) have joined forces to stop Byrne from becoming governor. We may not know until after the election, because of the state’s weak campaign finance laws and enforcement policies.
As of July 9, a day after the filing deadline for campaign finance reports, the Conservative Coalition for Alabama hasn’t registered with the Alabama Secretary of State or disclosed its donors. By law, the group had to file within 10 days of raising or spending its first $1,000, says Elections Director Janice McDonald. That deadline has passed. Its first ad aired June 24. Then again, the law says PACs have to disclose donors but the teachers’ union has raised millions of dollars this campaign cycle and has disclosed only one donor — a candidate who gave $951.42 in January 2009. “That’s typical,” McDonald said.
The Elections Division has no enforcement powers. That’s left to the Attorney General’s office. The Byrne campaign says the Attorney General’s office has agreed to its request for an investigation into the Conservative Coalition for Alabama.
A History of Fighting Dirty
What we know is this: the teacher’s union has a history of surreptitiously going after Byrne in this election.
In a May 2 story in the Birmingham News, Hubbert admitted that the organization helped finance True Republican through a series of PAC-to-PAC contributions that is commonly used in Alabama to avoid disclosing the true source of the contributions. Our own review of campaign finance records showed that the teachers’ PAC gave $1.5 million to 10 PACs, which in turn gave nearly $1 million to True Republican PAC. Joe Cottle, a lobbyist for the teachers’ group, is the treasurer of five of the PACs, and Rudy Davidson, a former education lobbyist and a contributor to A VOTE, was treasurer of four others. Such PAC-to-PAC contributions are legal. Cottle told us they are necessary in cases when a candidate or group doesn’t want to be publicly associated with AEA — which is unpopular in some circles, particularly in a Republican primary — but wants its money, or when the AEA wants to help moderate Republicans.
In all, True Republican raised and spent about $1.4 million during the primary, including on one ad titled “Peas in a Pod” that linked Byrne to Democratic presidents Bill Clinton and Barack Obama.
Birmingham News, May 2: While the money funneled to the True Republican PAC was obscured by a series of PAC-to-PAC transfers, now that it is out in the open, Hubbert had no hesitation in talking about it. He said AEA worked with a Marengo County Republican, Andy Renner, to set up the PAC and worked with Denver-based Media Strategies and Research on the Byrne ads. Media Strategies commonly works for Democratic candidates and for the National Education Association. Hubbert said the ads were an answer to Byrne’s ads that touted his taking on the AEA. “The first ad he ran he attacked us,” Hubbert said. ” He started the fight and we sat still for months and months.” Hubbert said he stands by the ads. “All of the things are documented,” Hubbert said. “If the truth bothers him, I’m sorry.”
Hubbert did not return our calls. Neither did Renner, who resigned as county GOP chairman on July 7 because of the controversy. But Hubbert did talk July 7 to the Associated Press and he didn’t deny that the union is involved with the Conservative Coalition for Alabama. Asked about the group, Hubbert said: “I know about it, but that’s all I’ll say about it.”
— by Eugene Kiely, Lara Seligman and Michael Morse
Correction, July 9: We originally reported that Byrne’s department was responsible for administering the PACT program, which isn’t correct. It’s administered by the state treasurer, and Byrne is only one of 10 board members who oversee the program.
Update, Aug. 4: Paul Hubbert, the executive secretary of the Alabama Education Association, told the Associated Press that the teachers’ association “had an interest” in the Conservative Coalition for Alabama, but he would not say how much his group may have donated. As of Aug. 4, the Conservative Coalition for Alabama had yet to disclose its donors.
Update, Sept. 30: The mystery has been solved. The Conservative Coalition for Alabama has filed IRS records that show its attack on Republican Bradley Byrne was entirely funded by the Alabama Education Association, as Byrne suspected. Read all about it here.
Sources
Haas, Brett. “Riley Looking to the Islands For Industry.” WAAY-TV. 21 Dec 2007.
Contract Review Permanent Legislative Oversight Committee. “Contract Review Report: Hand Arendall, LLC.” 18 Apr 2008.
Orndorff, Mary. “Alabama two-year colleges down to one lobbyist.” The Birmingham News. 12 May 2009.
Diel, Stan. “Alabama’s prepaid college tuition program down 45%; money not insured.” The Birmingham News. 3 May 2009.
Hamill, Stan. “Prepaid College Savings Plans Might Not Cover All Costs.” New York Times. 4 Oct 2009.
Cook, Jim. “Alabama College Chancellor waives tuition increases for PACT program.” Dothan Eagle. 27 Mar 2009.
Rawls, Phillip. “7 state legislators refuse to accept 61% pay raise.” The Decatur Daily News. 6 Apr 2007.
Alabama Department of Treasury. “Equity Asset Model.” 3 March 2009.
Alabama Department of Finance. “Travel voucher – D.C.” 12 Dec 2008.
Alabama Department of Finance. “Travel voucher – Hawaii.” 23 Jan 2008.
“The Island Getaway.” Editorial. Huntsville Times. 9 Jan 2008.
Alabama Secretary of State. “Sparks, Ron (Gov)” Accessed 9 Jul 2010.
Alabama Secretary of State. “Bentley, Robert Julian (Gov)” Accessed 9 Jul 2010.
Alabama Secretary of State. “True Republican PAC.” Accessed 9 Jul 2010.
Alabama Secretary of State. “AL Voice of Teachers for Education” Accessed 9 Jul 2010.
Spencer, Thomas. “AEA is hedging its bets in race for Alabama governor.” The Birmingham News. 2 May 2010.
Dean, Charles. “Republican official resigns over ties to AEA’s Paul Hubbert.” Birmingham News. 7 Jul 2010.
Rawls, Phillip. “New group running ads attacking Byrne.” Associated Press. 8 Jul 2010.
“Sen. Bradley Byrne Approved As Alabama’s Two-Year Schools Chancellor.” University Business. 29 May 2007.