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Scrushy was accused and convicted of paying the governor of Alabama US $500,000 as a bribe to appoint Scrushy to a government committee. The manner in which this was done shines a light on the way Scrushy and HealthSouth conducted business.
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Every attempt is made to provide accurate and well written material. Your contributions, suggestions, additional information and advice sent to the web address at the foot of the page are welcome. Where possible they will be included in revised pages.
The intention is to show the general thrust of corporate practices as well as the nature and extent of any allegations made. Material contained here represents my views based on my study of the operation of the health care marketplace and the material available to me. It should not be assumed to represent the views of any other individual or organization.
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Richard Scrushy donated $350,000 to Democrat Siegelman's republican opponent at the state elections. Siegelman was elected. Scrushy was on the state Certificate of Need review board where he exerted influence. Siegelman demanded a US $500,000 donation to his lottery fund to reappoint Scrushy. Scrushy paid up but did not want be seen to be supporting a lottery. A complex payment system was arranged to hide this. It all eventually became public. Siegelman, Scrushy and others were charged and convicted. The story gives an interesting insight into state politics in the USA - the way appointments are made. It throws more light on that complex character of Richard Scrushy and the way he managed HealthSouth. This is congruent with the sort of conduct described by other staff whose evidence the jurors in Birmingham discounted.
In a surprise 2007 development there have been accusations that Siegelman was set up by his political rivals - that this was a political conviction. We await developments!
During the period of Scrushy's investigations an inquiry had been opened into bribery allegations involving the governor of Alabama Don Siegelman. The two investigations started to share data and Scrushy was soon implicated and charged with paying Siegelman US $500,000 in return for an appointment to a health panel where he could exert influence on decisions involving HealthSouth and its competitors. He was also alleged to have paid other members of the panel to vote with him.
The trial was held in Montgomery which was not Scrushy's home. He tried the same strategies as those used in Birmingham but with less success. McGahan so glaringly absent from the other case appeared to give damaging evidence. Scrushy was convicted.
In June, two Alabama businessmen, Clayton Young and William Kirsch, and Nicholas Bailey, a top aide to former Gov. Don Siegelman, pleaded guilty to fraud related to bribes paid to Mr. Bailey. That investigation is continuing.
Now, according to people familiar with both Justice Department probes in Alabama, prosecutors in the two investigations have begun sharing information to determine if there are links between the scandals.
HealthSouth investigation widens Wall Street Journal August 22, 2003
A federal grand jury investigating public corruption allegations heard evidence Tuesday that a state board rejected a Birmingham hospital's request for a new MRI scanner after HealthSouth Corp. opposed the request.
While Brookwood fought over the MRI application, Richard Scrushy or another high-ranking HealthSouth official sat on the CON Review Board. The HealthSouth officials removed themselves from discussion in the Brookwood matters, but speculation remained as to the influence they could exert.
Jefferson County Circuit Judge Mervin Cherner in 2002 reversed the board's decision, saying it was "arbitrary and capricious and inconsistent with the board's established standards and practices."
A grand jury in Birmingham has indicted former Gov. Don Siegelman and two others on charges of health care fraud and conspiracy concerning Medicaid contracts.
Grand jury eyes denial of MRI request The Birmingham News June 23, 2004
Siegelman's party had funded the campaign for a state lottery. The community voted against this. A large debt remained and Siegelman was personally responsible for this. Donations were made by a number of donors after the lottery was rejected. The donors should have been disclosed but there was some hanky panky until the local newspaper investigated. The donations were then disclosed. Of interest are donations of $250,000 from HealthSouth and Integrated Health Services, an almost bankrupt nursing home group closely associated with Scrushy.
The former governor and two others already face an eight-count federal indictment in the Birmingham-based Northern District of Alabama. Those charges accuse Siegelman, his chief of staff Paul Hamrick and Tuscaloosa physician Phillip Bobo of a bid rigging scheme involving state Medicaid contracts.
Siegelman later played an instrumental role in pushing through legislation that exempted HealthSouth from the CON process during construction of its $300 million digital hospital.
In the weeks following the disclosure of the payment, and under pressure from the state attorney general's office, the Siegelman administration amended a series of campaign disclosure statements and IRS returns to reflect at least $920,000 in previously undisclosed donations.
Those included a $250,000 donation from HealthSouth; $250,000 from Maryland-based Integrated Health Services, a nursing home company that went into bankruptcy shortly after the donation was disclosed; $100,000 from Alfa; $100,000 from the Alabama Education Association, the state teachers union; $25,000 from Kimberly-Clark; and $25,000 from IPSCO steel company.
Several of those donations were made well after voters defeated the lottery proposal in October 1999 and after the original foundation had reported to the secretary of state that its political activities were done.
Lawyer: Grand jury looks at lottery foundation : Session continues probe of events during Siegelman term The Mobile Register June 25, 2004
The key allegation against Scrushy in the trial was that Siegelman demanded US $500,000 from Scrushy if he wanted to retain his seat on the Certificate of Need (CON) review board. Scrushy had to pay a premium because he had supported Siegelman's republican opponent at a recent election. Scrushy paid up.
Former Gov. Don Siegelman was charged Wednesday in a ''widespread racketeering conspiracy'' that includes allegations he took a bribe from former hospital executive Richard Scrushy for a key state appointment.
Also indicted on federal charges were two members of Siegelman's administration and Scrushy, the former head of the HealthSouth medical-services company who was acquitted earlier this year in a massive accounting-fraud case.
In all, Siegelman is accused of soliciting more than $1 million for himself, his 1998 campaign for governor or his unsuccessful bid in 1999 to get Alabama voters to approve a state lottery. Prosecutors say he made official state decisions in return for the money.
Scrushy was charged with bribery and fraud in an indictment filed May 17 but kept under seal, prosecutors said.
The indictment claims Scrushy made ''two disguised payments'' totaling $500,000 to Siegelman in exchange for Siegelman appointing him to the state's Certificate of Need Review Board, which decides on hospital expansions.
Three other people with ties to the Siegelman administration have pleaded guilty to corruption in the alleged scheme -- Nick Bailey, a former executive secretary and Cabinet head; Lanny Young, a former lobbyist and landfill developer; and Curtis Kirsch, a Montgomery architect who did work for the state during the Siegelman administration.
Wednesday's indictment alleged that Siegelman and Hamrick took hundreds of thousands of dollars in bribes from Young to aid Young's business interests, including awarding contracts to companies controlled by Young.
Ex - Ala. Governor Indicted in Conspiracy The New York Times (ASSOCIATED PRESS) October 26, 2005
In court, Scrushy entered a plea of "absolutely not guilty," and outside the courtroom, he told reporters, "None of it is true." He said HealthSouth gave a $250,000 donation to the lottery campaign as part of its "civic duty."
Fired HealthSouth CEO Pleads Not Guilty Forbes October 28, 2005
"There's no motive, no reason," he (Scrushy) said at a press conference denouncing charges he bribed Don Siegelman by steering $500,000 to a lottery foundation set up by the then-governor.
The HealthSouth founder's lawyers and advisers see yet another motive: payback.
Attorney Donald Watkins labeled the sequel "sour grapes" and reminded a reporter of Scrushy's stunning June 28 victory in Birmingham.
In the 1998 gubernatorial election, Scrushy supported Fob James, not Siegelman. The next year, prosecutors say, Scrushy held meetings with Siegelman. Scrushy, according to this scenario, wanted to retain his seat on the Certificate of Need Board, which controls growth in the state's health care industry.
Then, prosecutors say, Scrushy arranged for two $250,000 checks to go to a foundation set up by Siegelman to fund his failed lottery initiative. Siegelman had personally guaranteed a $730,000 loan to the foundation, which was heavily in debt, the indictment says.
Scrushy II is already shaping up as a bruiser. : Gloves off already for Scrushy II The Birmingham News October 30, 2005
The latest indictment alleges that Scrushy and Siegelman directed payments to influence votes on a HealthSouth hospital and PET scanner. In a statement, Scrushy said he was not involved in a conspiracy and didn't need to bribe Siegelman because he already had a seat on the CON board.
Scrushy faces new charges in Ala. CON bribery case Modern Healthcare December 13, 2005
The revised indictment issued Monday afternoon adds accusations that Scrushy bribed one, or possibly two, members of the state's Certificate of Need review board in return for taking actions that benefited HealthSouth.
Siegelman participated in some fashion in the scheme to guarantee CON board actions favorable to HealthSouth, according to the grand jury. The CON board -- made up of nine people appointed by the governor -- reviews most hospital expansion plans and major equipment purchases, mainly to prevent duplication of services.
According to revised indictment, on Aug. 2, 2002, Scrushy arranged for a $3,000 payment to a board member, who in turn, voted in favor of a matter involving HealthSouth.
On Feb. 6, 2002, the indictment alleges, an unidentified member of the panel received $8,000 in return for drafting a CON application for a PET scanner being sought by HealthSouth, and later, for voting to approve the scanner. It's unclear if the CON member accused of accepting $3,000 is the same as the one who received the $8,000.
Grand jury levels more charges The Mobile Register December 13, 2005
Former HealthSouth Corp. CEO Richard Scrushy threatened to fire the company's investment banking firm if it didn't provide money for Gov. Don Siegelman's campaign for a state lottery, a former executive told a grand jury.
In an appearance before the grand jury in August 2004, Martin (former HealthSouth Chief Financial Officer) said Scrushy initiated the push for a $250,000 donation. Prosecutors contend the money was part of a plan for Scrushy to provide $500,000 in lottery donations for Siegelman in return for influence on a state hospital regulatory board.
Martin testified that at Scrushy's instruction, he contacted William McGahan of UBS, one of HealthSouth's investment bankers, to inquire about a donation to Siegelman's 1999 lottery campaign.
Martin testified that Scrushy told him to tell the investment firm that it would be fired if it didn't help.
Martin said he had a harsh conversation with McGahan, telling him that "he would be fired."
Martin testified that it was later decided that UBS would forgive a debt owed by a Maryland nursing home company if the company made a donation to the lottery campaign. Prosecutors say that $250,000 fulfilled half of Scrushy's promised $500,000 for the lottery campaign.
McGahan testified to the grand jury that Scrushy and Martin telephoned him to seek a contribution to a "good cause" in Alabama. McGahan said he initially hoped the request would fade away, but he received more phone calls from Martin and HealthSouth lobbyist Eric Hanson.
McGahan testified that he felt he would no longer be HealthSouth's investment banker if he didn't come up with the money.
Former aide: Scrushy made threats to get money for lottery bid The Ledger-enquirer.com (Associated Press) Jan. 24, 2006
An aide to former Gov. Don Siegelman testified Tuesday that the governor showed him a $250,000 check after a 1999 meeting with then-HealthSouth CEO Richard Scrushy.
"What in the world is he going to want for that?" Nick Bailey testified he asked the governor at the time. "The governor said the CON board." Seven days after the date on the check, Scrushy was among the people Siegelman appointed to the Certificate of Need Review Board, which decides whether hospitals can expand and add services.
Bailey, considered a key witness for the prosecution, has a plea deal with prosecutors and testified about various aspects of the government's allegations that Siegelman's administration sold political favors for gifts.
Bailey testified Siegelman told a HealthSouth political consultant in 1999 that they needed to contribute $500,000 to his lottery campaign to make amends for Scrushy's support of Republican Fob James in the governor's race the year before.
After a private meeting between Scrushy and Siegelman, Bailey said, Siegelman showed him a $250,000 check from a Maryland company and made a comment about Scrushy being "halfway there."
Aide testifies money was for board seat The Birmingham News May 3, 2006
It is widely recognised that political donors in the USA are rewarded with positions where they can exert power or influence. It is not often that it is as clearly spelt out as in the quote below.
Cline (consultant for Siegelmans election campaigns) also told jurors he was upset when he heard Siegelman appointed Scrushy to the CON Board because Scrushy didn't support Siegelman's gubernatorial campaign. Cline said he wanted someone from the Nursing Home Association appointed to the board because it contributed almost a million dollars to Siegelman's governors race.
Siegelman Trial Day 6 - Suspicious Money WSFA Television Montgomery Al May 8, 2006
Cline was the first in a series of witnesses the government plans to call this week as it focuses on one of its key allegations: that Scrushy steered $500,000 to the unsuccessful lottery effort in exchange for Siegelman reappointing him to a state board that regulates expansion of hospitals and health care operations. Prosecutors allege that the money eventually covered lottery campaign debt for which Siegelman was personally liable.
Cline did testify that he warned Siegelman not to cover up the $250,000 check from the Maryland company -- a "colossal" contribution, even in big-time campaigns, Cline said -- by routing it through a Boston bank account opened by state Democratic Party Chairman Anthony Fant.
"I told him he was an idiot for doing it," said Cline. "I told him it (would be) bank fraud."
Cline said he first received the check from Siegelman and Bailey, both of whom told him it was from Scrushy. After consulting with former Siegelman Chief of Staff Paul Hamrick, they told him to hold on to the check. Siegelman and Bailey later reclaimed it, Cline recalled, and told him it would be returned. The check, however, was deposited anyway -- a fact Cline said he did not know until federal investigators visited him in 2004.
Ultimately, the money covered the Democratic Party's payment of debt incurred by the Alabama Education Lottery Foundation that Siegelman started to fund the referendum campaign. The money was not disclosed, as required by law, on the party's campaign finance forms until after federal investigators began probing the Siegelman administration in 2001.
Siegelman warned not to hide big check Mobile Register May 09, 2006
One wonders about the lengths Scrushy went to to secure the payment from UBS and IHS and the reasons. This is not the way to maintain a business relationship. If he did not want to be seen to be donating to a lottery because of his religious beliefs then why did he get HealthSouth to put up the second US $250,000?
In July 1999, when Richard Scrushy was still the chairman of the HealthSouth Corp., he threatened to fire the company's longtime investment banker Bill McGahan if he didn't come up with a $250,000 donation for the campaign to establish a lottery in Alabama.
McGahan made the donation to Siegelman's lottery campaign, and he made it from the account of Integrated Health Services Inc., a Maryland-based nursing home company then on the cusp of bankruptcy.
How and why this financially destitute company came to have its name on a $250,000 check to the Alabama Education Lottery Foundation and the long strange trip taken by that check prior to it being cashed is a linchpin in the prosecution's charges as they relate to Scrushy and Siegelman.
According to prosecutors, Siegelman met with Scrushy in the summer of 1999 and demanded that HealthSouth come up with $500,000 for the foundation created by Siegelman for the campaign to pass a state lottery.
Former top Siegelman aide Nick Bailey testified last week that Siegelman arrived at that figure by taking the $350,000 or so that HealthSouth gave in 1998 to then-Gov. Fob James in the campaign against Siegelman, and adding what Siegelman called -- according to Bailey -- interest.
Transactions engineered by McGahan for HealthSouth generated fees of up to $7 million, and as such, HealthSouth was a very important client to him, he testified.
McGahan, thin and inexpressive, said that in late June or early July, he received a call from Martin, his main contact at HealthSouth for years, and someone he'd often socialized with.
It was then that Martin told McGahan that Scrushy wanted a large donation -- Martin testified the initial request was well over $250,000 -- to the lottery foundation.
"I sarcastically said, 'Thanks a lot," McGahan testified.
"I was hoping (the request) would go away," McGahan said. "But even if the answer is 'No,' you want to give the appearance that you thought about it and tried."
USB regularly made charitable donations, but $250,000 would have been unprecedented, McGahan said.
Martin, who said he worked with Scrushy every day and was the second-highest ranking officer in the company, testified to being told by Scrushy about Siegelman's demand.
"Mr. Scrushy told me that HealthSouth couldn't make the payment to the lottery foundation, and he couldn't do it personally because he hadn't supported the lottery, and his wife didn't support the lottery and it would look bad," Martin said.
It (record of calls) showed, and McGahan testified to, receiving calls from Martin daily and sometimes several times a day during the period. Martin would curse and "increase his pressure" on McGahan, the investment banker testified.
"I wanted Mr. McGahan to understand the seriousness of it and the severity of it because Mr. Scrushy was definitely going to fire him," Martin testified. "I didn't want to fire him (McGahan), so I really started putting pressure on Bill."
At one point, Scrushy joined Martin in a speaker phone call to McGahan, whose office was in New York, and Scrushy stressed the importance of USB coming up with the $250,000, both Martin and McGahan testified.
After about two weeks and fearing he was about to lose a major client, McGahan came up with a way to get the money, he testified.
Integrated Health Services owed more than $1 million in investment banking fees to USB as a result of work by McGahan.
It was decided, McGahan testified, that USB would forgive about $267,000 of that debt if Integrated Health cut the $250,000 check to the lottery foundation.
Leif Murphy, a second HealthSouth official who worked under Martin, testified that he was directed to send a fax to Integrated Health with incorporation papers of the foundation and directions for the company to send the check as fast as possible.
Martin testified that it was "very important to Mr. Scrushy that he hand-deliver the check to Gov. Siegelman."
"I didn't want to have anything to do with it," he (Martin) said. "We had not supported the lottery, and secondly, we were asking one of our primary vendors to make a donation we didn't want to have anything to do with publicly.
The Integrated Health donation, like a later contribution for $250,000 from HealthSouth, was among about $730,000 in contributions to the foundation that it didn't disclose, as required, to the Alabama Secretary of State.
Witness: Scrushy demanded lottery donation The Mobile Register May 10, 2006
Once again Scrushy tried to woo the black vote and get a black jury. He also promoted his religiosity.
Fuller issued his decision shortly after a federal magistrate held a hearing, where he decided Scrushy and Siegelman will get the information they need to challenge the racial makeup of juries in the federal courts in Montgomery, but they will have to do their analysis quickly.
Scrushy and Siegelman, who are white, contend blacks are underrepresented in the grand juries and the pools of potential trial jurors for the federal courts in Montgomery. They argue that their indictment should be dismissed or that changes be made in the process of choosing potential jurors before they go on trial.
Judge rules Scrushy, Siegelman to be tried together The Associated Press February 2, 2006
Ordained as a minister and acquitted in a $2.7 billion fraud, fired HealthSouth CEO Richard Scrushy is done with the corporate boardroom. Now, he says, it's all about God.
Scrushy has helped found a ministry he says is feeding starving children in Africa and is planning even more missions work. It will also build a Bible-based university and offer services including mortgages, insurance and health care, he says.
Working with a small group of Birmingham-area ministers who have relatively little business experience, Scrushy co-founded Kingdom Builders International Ministries, which was unveiled recently with the introduction of its Web site.
The site appeared just ahead of Scrushy's May 1 trial on felony charges unrelated to the HealthSouth Corp. accounting scandal, but he said Kingdom Builders has been in the works for months.
"This is about building God's kingdom and helping his children," Scrushy said in an interview with The Associated Press. "My wife and I have been called to this."
A federal prosecutor said it was "more than a coincidence" that Scrushy's ministry was expanding amid the run-up to his trial in Montgomery, where a religious TV program featuring Scrushy and his wife also has started airing
Kingdom Builders' Web site touts Scrushy's rise at HealthSouth, mentioning his Wall Street experience but avoiding his legal troubles, which include his upcoming federal trial in an alleged government bribery scheme unrelated to the debacle at HealthSouth.
Working with his wife, Scrushy now pastors a church of his own. The congregation meets in the studio of a television station owned by one of Scrushy's sons-in-law.
Former HealthSouth CEO Focuses on Ministry The Associated Press April 16, 2006
It took only 2 weeks for the jury to find Siegelman and Scrushy guilty. Scrushy unsuccessfully tried various strategies to appeal the conviction.
A federal jury began deliberations Thursday in the government corruption trial of former Gov. Don Siegelman, accused of bribery in a wide-ranging case that alleges illegal deals with ex-HealthSouth CEO Richard Scrushy and two Cabinet members.
Jury deliberations begin in Siegelman corruption trial The Ledger-enquirer.com (Associated Press) June 15, 2006
HealthSouth Corp. founder Richard Scrushy was found guilty of giving Don Siegelman, then governor of Alabama, $500,000 in state lottery campaign donations return for a seat on a hospital regulatory board.
A federal court jury in Montgomery, Alabama, today convicted Scrushy, 53, and Siegelman, 60, of bribery and mail fraud. The convictions are punishable by as much as 30 years, according to U.S. prosecutors.
Prosecution witnesses testified the board voted on two HealthSouth projects during Scrushy's tenure, approving an application for a cancer screening device and one for a 38-bed rehabilitation center.
Scrushy, Alabama Ex-Governor Siegelman Found Guilty Bloomberg News June 29, 2006
Richard Scrushy's felony convictions Thursday in a state bribery scheme linked to his days as chief executive of HealthSouth Corp. aren't the end of his legal troubles.
Rather, it's just on to another courthouse for the next round.
Scrushy Facing More HealthSouth Trials Newsday.com (Associated Press) June 29, 2006
Attorneys for former HealthSouth Chief Executive Officer Richard Scrushy and former Alabama Gov. Don Siegelman filed a motion in U.S. District Court in Montgomery, Ala., seeking a new trial in the bribery and conspiracy case against the two men.
Scrushy, Siegelman seek new trial in bribery case Modern Healthcare September 26, 2006
In a bid for a new trial, the defense claimed that some of the jurors who convicted Siegelman and Scrushy on government corruption charges discussed the case with each other by e-mail during the trial and during deliberations in violation of U.S. District Judge Mark Fuller's instructions.
The defense motion also quoted the affidavit of a juror as saying outside evidence, apparently obtained from the Internet, was considered by jurors during their deliberations.
DA: Claim About Siegelman Jury Baseless The New York Times October 15, 2006
Richard Scrushy got a fair shake in the trial that resulted in his conviction on bribery charges, a federal judge ruled. U.S. District Judge Mark Fuller in Montgomery, Ala., said that while certain jurors "have been criticized for a lack of perfection regarding their service," the jury had fulfilled its duties.
Judge: Scrushy bribery trial was fair Modern Healthcare's Daily Dose December 14, 2006
After hearing attorneys for Siegelman and Scrushy object to findings in a sentencing report filed by federal probation officers, U.S. District Judge Mark Fuller issued his findings on a sentence range for the defendants.
He found that the range for Siegelman was from 121 months to 151 months, with a fine range from $17,500 to $175,000. The prison sentence range for Scrushy was from 97 months to 121 months and the fine range from $15,000 to $150,000.
In making his findings, Fuller ruled that his decision was influenced by a determination that both Siegelman and Scrushy had failed to take responsibility for their crimes.
Fuller at times Wednesday lost patience with bickering between attorneys and at one point told Feaga to "sit down."
Prosecutors: Siegelman, Scrushy Have Shown No Remorse Dow Jones News Service June 26, 2007
Former Alabama Gov. Don Siegelman was sentenced to more than seven years in federal prison and ex- HealthSouth CEO Richard Scrushy got nearly seven years Thursday in a bribery and corruption case the judge said damaged public trust in state government.
Siegelman was fined $50,000 due immediately, plus $181,325 to a state agency where prosecutors said kickbacks were made.
He is to perform 500 hours of community service when his sentence of seven years, four months is completed.
Scrushy was fined $150,000 due immediately, plus ordered to pay restitution of $267,000 to be paid to United Way of Central Alabama.
He also was ordered to perform 500 hours of community service when released.
Ex-governor, former CEO sentenced The Record (ASSOCIATED PRESS) June 29, 2007
In February 2007 Ben Hallman wrote a a long article for American Lawyer analysing and comparing the fraud and bribery cases to see why Scrushy got off in one and not the other. The implications for what were then upcoming actions against Scrushy by the SEC and by shareholders were discussed.
Hallman had interviewed several of the participants in the case. It is so interesting that I take the liberty of reproducing quite a large section from the material on the bribery case as it throws more light on both cases. The interesting thing is that in this analysis the fact that Scrushy may have been guilty or innocent was not part of the discussion - the hidden assumption seems to be that he probably was. They are talking about how the lawyers got him off or failed to do so.
True to form, the Scrushy trial team underwent another makeover. Watkins-spokesman, protocol officer, and tone-setter for the defense-retired. Parkman, nicknamed "Matlock" by jurors in the Birmingham trial for his aw-shucks demeanor, departed to join Johnnie Cochran's law firm. That left Leach, the former federal prosecutor, and a handful of local attorneys, including veteran civil rights lawyer Fred Gray. Leach's role in the first trial was as evidentiary expert; in the second trial he also assumed the mantle of lead trial counsel. "It made a big difference," says Franklin. "[Leach] is a seasoned prosecutor, but he doesn't have the charisma" of Watkins and Parkman.
Parkman says Leach simply lacked experience: "Art had tried a few cases as a prosecutor and a few as a defense lawyer, but over the long haul nothing of a substantial nature." He says that the inexperience of the defense team as a whole showed in the courtroom, particularly in several heated confrontations with prosecutors.
Franklin, an otherwise affable career prosecutor, says that his was an easier case to try, that juries grasp bribery as a concept better than the intricacies of arcane accounting rules. A paper trail tied Scrushy to the bribe, he says-a key difference from the fraud trial, where despite a wealth of witnesses and circumstantial evidence, prosecutors were unable to present written orders from Scrushy to show he directed the fraud. Another difference, Franklin says, was that they had a more educated jury, including a foreman who was a fund-raiser for Auburn University, "so he knew how fund-raising was supposed to work."
Government lawyers also made an effort to simplify their case, Franklin says. That started with the indictments. This time Scrushy faced six charges. The simplification effort continued with the witnesses. Franklin's team called just one of the five former CFOs to testify-Martin, who testified that Scrushy had bragged to him about the bribe. "We did try to streamline the case," Franklin says. Despite their efforts, he says, defense lawyers managed to drag everything out. "We would examine a witness for three hours," he says. "They would cross-examine for three days." Parkman says in those cross-examinations, defense lawyers played the government's game by focusing on documents instead of the credibility of the witnesses. But that had a lot to do with the judge, other lawyers say. U.S. district court judge Mark Fuller didn't allow Scrushy's lawyers as much leeway. When the defense tried again to portray a witness using antidepressants as a drug abuser because of antidepressant use, for example, Fuller quickly cut off the line of questioning.
There was also little of the antipathy between the judge and the prosecutors that existed in the fraud trial. This was a local effort staffed out of the Montgomery U.S. attorney's office, and the relationship between the local prosecutors and judges was collegial. "We have to work together every day," Franklin says.
The most glaring difference between the two Scrushy trials is how the defense handled race. Watkins mostly avoided racial rhetoric in the courtroom (though he did refer to Scrushy as "the boy from the other side of the Edmund Pettus Bridge," the site of a famous Selma, Alabama, clash between police and civil rights marchers). In contrast, the Montgomery team's appeal to black jurors had all the nuance of a bulldozer. In his closing statement, Gray, who had represented Martin Luther King, Jr., and Rosa Parks, asked the jury to return a not guilty verdict "to make Dr. King's dream come true." As Gray spoke, according to an account in Mobile's Press-Register, another member of the Scrushy legal team quietly put up a poster board of King's "I Have a Dream" speech.
With his voice rising to a crescendo, Gray implored federal jurors to "fulfill Dr. King's dream and fulfill that old song." He continued: "Free at last! Free at last! Thank God almighty we're free at last!"
The tone of Gray's argument suggests it wasn't just the media that seized on race as the deciding issue in the first Scrushy trial. Interestingly, Scrushy himself seems not to have understood what Watkins was up to in Birmingham. Parkman says that hiring Gray, who was brought in for the opening and closing arguments, was a mistake. "It sends the signal he's doing it for one reason and one reason only, to buy the African American vote," he says. There's just no comparing Scrushy to King, he says, and doing so is likely to make black jurors mad. In Montgomery, the birthplace of the modern civil rights movement, Scrushy's lawyers dared to compare his struggles with those of icons.
The jury of seven blacks and five whites-the same breakdown as in the first trial-convicted Scrushy and Siegelman on June 29, 2006
"I don't say this to malign other lawyers, but I have no doubt I could have won the [second trial]," Parkman says. "They made it a trial about paper and documents, when it should have been about people."
Pushing His Luck; Feature; Lawyers hit upon a winning formula in Richard Scrushy's; first criminal trial. But when they tried the same tactics; in a second trial, they lost. What happened? American Lawyer Volume Vol. 29, No. 2; Issue February 1, 2007
It appears that in early July 2007 a number of articles were published in the press suggesting that Siegelman (a Democrat) and Scrushy were set up and convicted by a republican conspiracy and were in fact innocent. I do not have these reports. Apparently Siegelman claimed in the media but not in court that his prosecution and conviction was political.
The Department of Justice issued a long rebuttal on July 17, 2007.
INFORMATION ISSUED BY U.S. ATTORNEY'S OFFICE FOR THE MIDDLE DISTRICT OF ALABAMA ON JULY 17: MIDDLE DISTRICT OF ALABAMA'S RESPONSE TO ERRORS IN SIEGELMAN/SCRUSHY NATIONAL NEWS ACCOUNTS US Fed News July 17, 2007
In spite of this there is a New York Times article indicating that an Alabama lawyer is heading to Washington to tell a congressional investigation of overhearing republicans talking about this. It is suggested that the last state governor election was rigged against Siegelman and that the subsequent trial may have been a set up.
The article indicates that the Justice department refused to appoint an "independent prosecutor to examine whether these and other cases were politicized, Congress must provide the scrutiny".
The Strange Case of an Imprisoned Alabama Governor The New York Times September 10, 2007
I am not going to explore this issue at this stage but await developments.
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This page first created Oct 2007 by Michael Wynne