Despite the felony convictions of its president and sole shareholder, Auburn Network Inc. should not have its broadcast licenses revoked.
That’s the initial decision by an FCC administrative law judge. She determined that the commission’s Enforcement Bureau did not satisfy its burden of proof to prove that Michael Hubbard and his company are unqualified to be a commission licensee.
Hubbard is former speaker of the Alabama House of Representatives. He is serving a 28-month prison sentence on six counts of violating the Alabama Ethics Code.
Auburn Network, which he started in 1994, is the licensee of WANI(AM) in Opelika, Ala., and WGZZ(FM), Waverly, Ala., plus three FM translators in Auburn that rebroadcast the FM station. It also holds a CP for a LPTV station and it has other media holdings including a magazine.
Hubbard was elected to the Alabama House in 1998. He became minority leader in 2004, chairman of the Alabama Republican Party in 2006, and speaker of the House in 2010, a post he held until resigning in 2016.
The six felonies for which Hubbard stands convicted were based on consulting contracts between Auburn Network and three private companies.
His actions were found to violate laws that prohibit public officials from soliciting a thing of value from a principal of a lobbyist, from using an official position for personal gain and using state property for private benefit; and that prohibit members of the legislature from representing a business entity for compensation before a state department or agency.
After he was convicted, Auburn Network filed an application to assign his licenses to Auburn Networks LLC, an entity owned by Frank Lee Perryman that apparently is operating the stations now. But that application has been held in abeyance pending this proceeding.
The Enforcement Bureau argued that Hubbard’s felony convictions make him unqualified to remain a licensee because he “deliberately monetized his political office through a series of private contractual arrangements for which he personally received substantial financial compensation.” It said he had betrayed the public trust, and it noted that the FCC system of licensing depends on truthfulness of its licensees.
The bureau thought it significant that the structure of the consulting agreements was between each client and Auburn Network, “a media company with no history in offering business or political consulting services,” despite the fact that it was clear that the consulting work was to be performed by Hubbard. Deceptive use of the company to hide criminal activity and evade his obligations as a public official to identify sources of income amounted to a lack of candor, it said.
Auburn Network disputed the bureau’s arguments on numerous grounds, among them that Hubbard operated his businesses through Auburn because it was simpler for accounting and tax reporting purposes. Auburn called Hubbard’s convictions “an aberration in a life of exemplary public and community service” and said the bureau had failed to meet its burden of proof.
The FCC case turns on whether Hubbard’s behavior warrants license revocation under the commission’s character qualifications policy.
In her ruling, the judge laid out the history and rationale of those policies. She noted that in the past 30 years the commission has indeed revoked licenses for a variety of felony convictions, including drug offenses, child molestation, burglary and murder. And the judge agreed that the FCC “relies heavily on the honesty and probity of its licensees in a regulatory system that is largely self-policing.”
But she said the Enforcement Bureau had not shown that an intent to obfuscate was inherent in Hubbard’s actions. What the bureau submitted, she wrote, was conjecture, not evidence.
“Public officials in Alabama are permitted by the Alabama Ethics Code to conduct outside business, and Mr. Hubbard consulted ethics officials for advice in that regard. While there were obvious flaws in the way he followed the advice that he was given, the fact that he reached out arguably belies an effort to deceive.”
More importantly, she said, “there are legitimate reasons why a businessperson would choose to provide consulting services through a business entity rather than in a personal capacity.”
The bureau tried to show that Hubbard’s purpose was to “set Auburn up as the ‘dummy’ consultant and financial beneficiary” to justify omitting the consulting companies from his financial disclosure forms.
But the judge didn’t accept that argument, noting, among other things, that Auburn Network had been in existence for almost two decades and had served as the umbrella under which Hubbard had operated a number of other businesses.
“Rather than concealment of his consulting clients, what got Mr. Hubbard into trouble, and ultimately convicted of six felonies, was his failure to properly separate his official state position and his extra-official business activities,” she wrote.
However, “No persuasive evidence has been introduced … to show that Mr. Hubbard’s conviction on public corruption felonies logically leads to the conclusion that he is likely to behave dishonestly with the commission.”
Such questions of fitness after a felony conviction have to be determined case by case, she wrote; and while there is no defined “hierarchy” of disqualifying felonies, the bar is higher in some cases, such as child molestation and murder, than in others. And FCC policy is clear that not every felony is disqualifying.
“The crimes of which Mr. Hubbard is guilty are not trivial; indeed, he is currently incarcerated as a result,” the judge wrote.
But “a careful review of the criminal record and all the evidence submitted fails to persuade the Presiding Judge that Mr. Hubbard does not possess the character to remain a commission licensee. The goal of the commission’s character qualifications policy ‘is not to pass moral judgment on applicants but, instead, to determine whether the public interest will be served.’
“The misdeeds of a public servant may indeed be relevant in gauging that person’s ability to serve the public interest as an FCC licensee, but in this particular case and under these particular circumstances, the evidence presented does not satisfy the burden of proof. Accordingly, the licenses of Auburn Network will not be revoked.”
You can read the judge’s detailed rationale in her initial decision on the FCC website. The Office of Administrative Law Judges is responsible for conducting the hearings ordered by the commission; initial decisions of the judges may be appealed to the commission.
This also was the first hearing proceeding conducted on a written record, rather than by live oral hearing, under streamlined procedures adopted by the commission in 2020.
In her decision the judge addressed some complications that the new processes raise, saying, “We may still have some work to do in developing procedures for the consideration of evidentiary arguments in written hearings.”