Former HealthSouth CEO Richard Scrushy denies hiding millions amid ongoing scandal
The man who once led HealthSouth, a huge provider of outpatient rehab services, has been ordered to turn over records related to a bank account that lawyers say he’s using to hide millions. In a seven-page order against Richard Scrushy, the Birmingham-based company’s former chief executive officer, John England Jr., acting as special master in the case, also issued an injunction against any money being transferred out of the account in question, AL.com reported. The ruling Tuesday came after lawyers representing the plaintiffs in a 2009 civil verdict contended that Scrushy has been hiding money that could be used to pay some of the more than $2.87 billion in damages he still owes as result of the HealthSouth scandal. The government contends Scrushy and other executives inflated earnings by $2.7 billion from 1996 through March 2003 to make it appear HealthSouth was meeting expectations of Wall Street analysts. Lawyers alleged Scrushy has written checks totaling $7.3 million on an account in the name of convicted felon Eddie Briskett, who is currently serving time in the Alabama Department of Corrections for various convictions, including property theft, burglary, and assault. England contends Scrushy, or someone connected to him, has control of the account and has actively used it. Scrushy denies any wrongdoing and said he welcomes any disclosures, since “they will find nothing,” the news site reported. “It’s totally made-up, false information that never should have been put out,” Scrushy said. In 2007, Scrushy was sentenced to nearly seven years in prison for bribery involving former Gov. Don Siegelman. While serving his sentence in a Texas prison, a civil court found him liable for the HealthSouth accounting fraud. After serving about five years of his sentence, Scrushy was released from prison. According to England’s order, Scrushy contends he is unemployed and has no assets other than Social Security. Lawyers for the plaintiffs say he is conducting business through other entities owned by friends and family. According to the ruling, Scrushy has “exchanged thousands of text messages” with a number associated with Briskett and written checks totaling $7.3 million on the account, including two checks to himself totaling $3 million. However, those checks were never deposited in any account previously disclosed by Scrushy, the order states. In addition, England references a 2020 letter to the Alabama Bureau of Pardons and Paroles by an associate of Scrushy, explaining that Briskett has an investment portfolio of about $7.1 million. “The evidence presented suggests that Mr. Scrushy may have an interest in the account or in some or all of the proceeds of the account,” the order reads. “At minimum, it appears that Mr. Scrushy or someone acting in concert with him opened the account in Briskett’s name and that Mr. Scrushy has control of the account.” Scrushy told the news site that he has known Briskett for 20 years through his prison ministry and has exchanged text messages with Briskett’s sister, mainly to set up telephone conversations. The checks, he said, were “kind of a joke” between the two of them. “He’s one of the gentlemen that I’ve helped, being a friend and minister,” he said. “I’ve never signed on any bank account of his. There’s zero truth to any of that. I’ve never been involved with Eddie Briskett on any account, period. I’ve never taken a dime from Eddie Briskett.” Scrushy said the court filings in the case are a continued harassment to him and his family. “I’ve never seen such abuse and waste in my life,” he said. “I told the judge yesterday to let those attorneys go and discover anything they want. There is nothing to it.”
Hubbard apologizes, seeks early release from prison
Former House Speaker Mike Hubbard in a Friday court filing apologized for his ethics conviction that he said hurt the state and his family as his attorney filed a request for his early release after serving one year of a 28-month sentence. Hubbard’s attorney argued his sentence of over two years behind bars is out of line with punishments handed down to other officials convicted of violating the state ethics law. In a letter to the judge, Hubbard wrote that “I recognize and admit my errors” and apologized to the people of the state and others. “My conviction has severely damaged and embarrassed me and my family, friends, former constituents, community, church, the legislature, and the state of Alabama. For this, I am severely sorry and respectfully ask forgiveness from everyone affected,” Hubbard wrote in the letter to Lee County Circuit Judge Jacob Walker. He wrote that it was embarrassing to be convicted of violating an ethics law he oversaw being drafted and approved by lawmakers. Whether a criminal defendant has accepted responsibility and expressed remorse is often a factor when a judge weighs a request for leniency. A jury in 2016 convicted Hubbard of violating the state ethics law, including using his public office for personal financial gain. Prosecutors accused Hubbard of leveraging his powerful public office to obtain clients and investments for his businesses, violating the prohibition against giving a “thing of value” to an elected official. His defense maintained the contracts were legitimate work and unrelated to his position as House speaker. In upholding the conviction this spring, justices noted that when contacting a company for one client, Hubbard “identified himself as a state legislator and as Speaker of the House of Representatives.” They also noted how one company executive wrote in an email that Hubbard could get the company, “in front of any speaker in the country regardless of party.” The Republican was one of the state’s most powerful politicians until the ethics conviction in a corruption case ended his political career. Hubbard, the architect of the GOP’s takeover of the Alabama Legislature in 2010, was a legislator from Auburn and former chairman of the Alabama Republican Party. He was elected House speaker soon after Republicans won control of both legislative chambers. Hubbard was automatically removed from office after his 2016 felony conviction. Hubbard was originally sentenced to 48 months behind bars, but that was reduced after some counts against him were overturned on appeal. His attorney argued the 28-month sentence is well “outside the overwhelming majority of the similarly-situated individuals” that have been convicted in state court of state ethics violations, and listed sentences of other elected officials convicted in state court. However, former Gov. Don Siegelman served six years in federal prison after being convicted in 2006 on charges that he sold a seat on a state regulatory board to HealthSouth founder Richard Scrushy in exchange for $500,000 in donations to Siegelman’s signature political issue — his 1999 campaign to establish a state lottery. Siegelman was convicted on a separate obstruction of justice charge that he tried to hide money he received from a lobbyist. Siegelman was released in 2017. He has regained his law license and says he plans to focus on criminal justice issues. Republished with the permission of the Associated Press.
Former Gov. Don Siegelman regains law license
Former Alabama Gov. Don Siegelman has regained his state law license, years after being released from federal prison in a government corruption case. The Alabama Bar Association on Monday confirmed that Siegelman’s license was restored in December after he went through an application process. The former governor, 75, told The Associated Press that he expects to do a mix of criminal and civil work. He said he would like to work with public defenders or advocacy groups to take on criminal defense cases. “I look forward to finding those special cases in which I believe and feel like I can make a difference and working either pro-bono or with another lawyer,” Siegelman said in a telephone interview. Siegelman has become an advocate for making changes to the criminal justice system, including “providing a measure of justice to families who lose someone to the abuse of power or use of excessive force by police.” Siegelman, for decades, was a dominating figure in Alabama politics, holding the offices of secretary of state, attorney general, lieutenant governor, and governor. He served as Alabama’s governor from 1999 to 2003. He was the last Democrat to hold the position in the conservative state. Siegelman was released from prison in 2017 after serving a six-year sentence for his conviction on charges of bribery and obstruction of justice. A federal jury in 2006 convicted Siegelman on charges that he sold a seat on a state regulatory board to HealthSouth founder Richard Scrushy in exchange for $500,000 in donations to Siegelman’s signature political issue — his 1999 campaign to establish a state lottery. Siegelman was convicted on a separate obstruction of justice charge that he tried to hide money he received from a lobbyist. Siegelman maintained his innocence and unsuccessfully waged a lengthy battle in court and in the media to try to overturn his conviction. His lawyers argued his prosecution was motivated by Republicans upset by the Democrat’s political success and that the conviction was backed up by scant evidence. Republished with the permission of the Associated Press.
U.S. attorney who prosecuted former governor Don Siegelman retires
U.S. Attorney Louis V. Franklin Sr., who prosecuted former Alabama Gov. Don Siegelman on corruption charges, announced his retirement Friday after about 30 years of public service. Franklin joined the U.S. attorney’s office for the Middle District of Alabama in 1990, then spent two years in private practice in the late ’90s before returning. He was confirmed as the first Black U.S. attorney in Montgomery in 2017 after being nominated by then-President Donald Trump. Democratic President Joe Biden will name a successor. Franklin led the team that prosecuted Siegelman and HealthSouth Corp. founder Richard Scrushy on bribery charges in 2006. Both men served time in federal prison. “It has been an absolute privilege to spend my career in this office, serving the people of the Middle District and working alongside so many talented attorneys and staff,” Franklin said in a statement. “I know I am leaving the office in good hands, and I will forever be grateful for the opportunity to serve in my hometown and make our communities safer for the people of Alabama.” Multiple other U.S. attorneys nationwide have retired in recent days, as is usual when the White House switches from one political party to another. Richard Moore, the U.S. Attorney based in Mobile, announced his retirement earlier in the week. Republished with the permission of the Associated Press.
Fresh out of federal prison, Don Siegelman turns 71; won’t celebrate with state pension
Former Gov. Don Siegelman, who spent more than six years in federal prison for bribery, turned 71 Friday. After two decades years in Alabama statewide elective office – eight as secretary of state and four each as attorney general, lieutenant governor, and governor – was convicted in 2006 of bribery, and sentenced to 78 months in federal prison. On February 8, Siegelman was released six months early from a facility in Oakdale, Louisiana, and is serving the remaining sentence in detention at his Vestavia Hills home. His conviction will officially end August 8. “I feel like a refugee coming into New York,” Siegelman told friends and family after his release. In 2006, both Siegelman and HealthSouth founder Richard Scrushy were convicted on bribery charges stemming from $500,000 Scrushy gave Siegelman’s campaign for his support in establishing an Alabama lottery and in exchange for being named to a state health board. Initially, Siegelman faced an 88-month prison sentence in 2007; nine months after his arrest, however, he was released on bond and filed an appeal. Later, the court resentenced Siegelman for 78 months; he returned to jail September 2012, where he stayed until earlier this month. AL.com reports that Siegelman will not be celebrating his birthday with a state pension – not because of his bribery conviction, but because of a 1901 statute in the Alabama Constitution that bans elected officials from receiving state retirement. A 1975 attempt to change the law to give then-Gov. George Wallace a pension was struck down as unconstitutional.
Jim Zeigler says reversal of Virginia governor’s graft conviction could free Don Siegelman
State Auditor Jim Zeigler said Monday he believes the U.S. Supreme Court‘s decision to overturn a prominent Virginia politician’s criminal conviction could spring former Alabama Gov. Don Siegelman as well. Saying Gov. Bob McDonnell was exonerated on charges “very close to what Siegelman was convicted of,” Zeigler said Siegelman — a longtime power broker in Montgomery and around the state — could benefit from procedural aspects of McDonnell’s case. The high court found Monday morning that the jury that convicted McDonnell was instructed incorrectly. Specifically, the court ruled that state prosecutors interpreted a federal bribery statute too broadly, and instructed jurors to deliberate over the decision whether or not to convict McDonnell for something that may not have been technically unlawful at all. The jury was instructed to interpret the term “public acts” to mean almost anything a governor does while in office, including setting up meetings between interests and constituents — precisely what McDonnell was convicted of doing in exchange for personal gifts from a businessman seeking access to public figures. Zeigler sees parallels between McDonnell’s case and Siegelman’s in this regard. Siegelman was convicted for re-appointing a hospital executive named Richard Scrushy to a state board that in part regulates hospitals, after Scrushy raised some $500,000 for a state lottery referendum at Siegelman’s request. In doing so, under one reading of the precedent set by the McDonnell case, Siegelman may have simply carried out a “public act” in accordance with his office, one not subject to the harsh scrutiny set out under federal bribery laws. Zeigler’s comments come amid a movement of activists in Alabama and beyond to free Seigelman. In April, more than 100 former state attorneys general from across the country asked President Barack Obama to pardon the former governor. In January the U.S. Supreme Court denied to hear an appeal from Siegelman, making a presidential pardon his last hope to reduce his sentence, aside from Monday’s high court ruling. On Facebook, the group “Free Don Siegelman” has gained 2,800 supporters and counting, including Alabama 7th District U.S. Rep. Terri Sewell, who all support Siegelman’s release. The recent conviction of House Speaker Mike Hubbard, Zeigler opined, would not be affected by the recent McDonnell decision.
Judge won’t release Siegelman on appeal bond
A federal judge on Thursday refused to free former Alabama Gov. Don Siegelman from prison while he continues to appeal his 2006 bribery conviction. Siegelman has raised significant issues, but the 11th U.S. Circuit Court of Appeals is unlikely to grant Siegelman a new trial since the court has already rejected similar arguments from his co-defendant, Richard Scrushy, U.S. District Judge Clay Land of Georgia said in his 31-page order. A federal jury in 2006 convicted Siegelman of federal funds bribery on allegations that he sold a seat on a hospital regulatory board to former HealthSouth CEO Richard Scrushy in exchange for $500,000 in donations to Siegelman’s unsuccessful 1999 campaign to get Alabama voters to approve a state lottery. Siegelman was also convicted of obstruction of justice. Siegelman, 68, has been serving a 6 1/2-year sentence at a Louisiana prison camp. Siegelman attended a Monday hearing in Montgomery before Land while shackled and wearing a red jail jumpsuit. The former Democratic governor is arguing his 2006 trial was tainted by the involvement of a prosecutor with ties to GOP politics. His lawyers also say the trial judge made legal mistakes when sentencing Siegelman. Then-U.S. Attorney Leura Canary announced her recusal from the investigation in 2002, three years before Siegelman was indicted, after Siegelman’s lawyer made an issue of her husband’s work in GOP politics. Siegelman’s lawyers argued she still remained improperly involved in the case. Justice Department lawyer John-Alex Romano argued Canary had no decision-making role in the case and handled only the management duties of her office. In his order, Land expressed concern over some of the issues raised by Siegelman, particularly that the court did not let him investigate the extent of Canary’s involvement. Land said there was some evidence that Canary did not completely “divorce” herself from the case, and he believes the trial court should have let Siegelman get more information through documents or testimony. However, he said that the 11th Circuit ruled against similar discovery requests by Scrushy, and Siegelman had not proven why the appeals court would rule any differently for him. Republished with permission of the Associated Press.
