Alabama Ethics Panel Pulls Back
December 13. 2016
By BRYAN LYMAN Montgomery Advertiser
MONTGOMERY, Ala. (AP) — The Alabama Ethics Commission withdrew an opinion that nonprofits
said was hurting their fundraising activities.
Initially released in September, the opinion related to efforts by a nonprofit in McCalla to raise money
for a sports complex. The opinion - which said that the state ethics law's definition of a principal, an
individual or organization that hires a lobbyist - was broad, and included not only a firm that hired the
lobbyist but anyone in the organization with authority, including executives, officers and members of
boards of directors.
Lobbyists and principals cannot provide legislators with things of value.
"While all employees of an entity are not principals, the individuals described above are," the opinion
said. "Members of an Association who have no authority within the Association, and are otherwise
not within the proscriptions stated above, are not considered principals." The issue came up in the trial of House Speaker Mike Hubbard, convicted in June on 12 felony ethics charges. Hubbard's convictions included charges that he solicited those who hire principals, including a member of the Business Council of Alabama's board of directors, for investments in a business in which he held a partial interest. Hubbard's jury accepted a broad definition of principal favored by prosecutors with the Alabama attorney general's office. That stirred unease among members of the business community, concerned that including board members, who are not usually involved in the day-to-day operations
of a business, was a broader definition than anticipated. The Auburn Republican maintains his innocence and has appealed his convictions.
Representatives of nonprofits who spoke before the Ethics Commission Wednesday morning said
many of their chief donors had cut off funds over concerns about the principal definition. Many also
noted that public officials serve on their boards. "The big issue, and it's already begun, is the for-profit companies and our for-profit partners are not contributing," said Shannon Ammons, director of the Alabama Association of Nonprofits. "There's a fear that, 'Are they defined as a principal?' If they are, are they trying to buy influence through a nonprofit donation?"
Former Alabama Chief Justice Sue Bell Cobb, speaking for Alabama Children's First, a nonprofit,
said the loss of funding would hurt the organization's ability to advocate for childhood issues in the
Legislature. "It's made it such that (donors) don't know if they're committing a crime," she said. "That
overbreadth needs to be fixed."
The opinion, which chiefly addressed fundraising for Friends of McCalla, the group building the
complex, said public officials and employees who served on the board could raise money for the
organization from principals "as long as the purpose for doing so is to benefit the public, and as long
as funds raised will not provide any personal gain to the public official, public employee, their family
or a business with which they are associated as noted herein." The opinion said a public employee
or official or family member employed by Friends of McCalla could not solicit on their behalf.
Alabama Ethics Commission Director Tom Albritton asked the commission to suspend the
implementation of the opinion. He said there was "absolute agreement" in the value of the work that
nonprofits do, but added that there were limits to what officials could get involved with, limits he said
the commission still needed to determine. But he said the opinion was not intended to hurt
nonprofits' ability to pull in money. "Whatever fundraising efforts you used last year are the efforts you should use this year," he said.
But commission members, who voted unanimously for the opinion in September, voted 3-2
Wednesday to withdraw it. Chairman Jerry Fielding and commissioners Butch Ellis and Charles Price
voted to withdraw it; commissioners Stewart Tankersley and James Wood voted against it.
"I just didn't think it should be voted down but suspended so we could clarify it based on comments
we heard today," Wood said after the vote. Ellis said he believed the opinion amounted to lawmaking.
"I do not think our role is a legislative role," he said, adding, "I think we ought to stick with the
statutory definition of a principal. If we need to change it, I think the Legislature needs to change it."
The Ethics Commission could self-generate an opinion on the issue, or wait for another question on
the definition of a principal to be raised.