Governor Took $10,000 Gift from Indicted Appointee
MONTGOMERY, Ala. (AP) _ Gov. Guy Hunt acknowledged Thursday that he accepted a $10,000 gift shortly before his 1986 election, paid no taxes on it and then appointed the donor to a state board now under criminal investigation.
The donor, Don Martin, also is under indictment in an alleged $29 million savings and loan fraud, and a grand jury returns next week to resume its investigation of Hunt’s finances.
For Republican stalwarts, it’s one more blow against the man they helped become Alabama’s first GOP governor this century.
″He has been an embarrassment to the state and I regret I ever supported him,″ said Jean Sullivan of Selma, a former Republican National Committeewoman.
Hunt, a Primitive Baptist minister, last year repaid the state nearly $10,000 after a series of Associated Press reports disclosed that he flew on state planes at taxpayer expense to church meetings where he accepted money in the form of offerings.
In October 1986, Hunt accepted two checks totaling $10,000 from Martin, a Montgomery developer. On Feb. 25, 1987, a month after taking office, Hunt appointed Martin to the Alabama Alcoholic Beverage Control Board.
Hunt declined an interview Thursday about the Martin money, but issued a statement saying: ″I received the money. I understood at the time that it was a personal gift, and I treated it as such.″
His press secretary, Terry Abbott, said: ″The governor discussed the matter with his tax accountant at the time and was advised that he did not have to include the gift as part of his income tax return. ... The gift from Mr. Martin absolutely did not have anything to do with the subsequent appointment.″
Officials with the Internal Revenue Service and the state Revenue Department said cash gifts are not taxable income and do not fall under Alabama’s ethics statutes.
″But you have to make sure it is a gift and there are no strings attached,″ said Peggy Haviland of the IRS.
The two checks from Martin to Hunt were subpoenaed by Monteballo Brands of Baltimore as part of its lawsuit against Hunt and the liquor board for ordering its products removed from state liquor stores this year.
Monteballo contends its problems began after it ignored advice to hire Martin as an agent in Alabama. State liquor officials said the removal was part of a restructuring to improve sales.
Martin told The Montgomery Advertiser he assumed Hunt would use the $10,000 in his campaign. He referred other questions to his attorney, Ron Wise, who declined to comment other than to say: ″Mr. Martin did not do anything illegal.″
Martin, 64, resigned from the liquor control board on Feb. 15, 1990, one month after filing for bankruptcy. A federal grand jury indicted him June 15. He was accused of defrauding savings-and-loan associations and investors of $29 million on home mortgages.
In connection with Hunty’s use of state planes, the Ethics Commission voted 4-0 that there was probable cause Hunt may have violated the ethics law and referred the case to Attorney General Jimmy Evans, who convened a grand jury to investigate.
The same grand jury will investigate the two checks from Martin and the liquor board’s handling of state liquor business, Evans said.