How much did the Riley family benefit from the prosecution of former Alabama Governor Don Siegelman? Let us count the ways.
We know that current Governor Bob Riley saw his path to re-election in 2006 become much more clear with Siegelman out of the way.
Now, thanks to the reporting of Sam Stein at The Huffington Post, we know the Riley family benefited in other ways. Birmingham lawyer Rob Riley, son of the Republican governor, made a nice chunk of change from a civil matter that ran parallel to the Siegelman criminal case.
On January 13, 2005, Rob Riley suddenly was added as local counsel on a massive lawsuit against HealthSouth and its former CEO, Richard Scrushy. Riley represented the New Mexico State Investment Council, a relatively new player at the time in the HealthSouth litigation.
At the same time the civil case was unfolding, Scrushy was co-defendant in the Siegelman criminal case. And that, Stein reports, is how Rob Riley stood to gain financially.
Riley's involvement in the class-action HealthSouth lawsuit is curious. His legal work has focused on medical malpractice, Stein reports, and he had little experience in complex securities litigation.
But Riley had something that proved to be more important--ties to U.S. Judge Mark Fuller, who was overseeing the Siegelman/Scrushy criminal case. Writes Stein:
"[Riley] very aggressively thrust himself into that suit as a late comer," said Scott Horton, a law professor at Columbia University who has written extensively on these issues for Harper's magazine. "He knew that Fuller had made statements suggesting that he felt he had once been a target of a politically motivated attack by Siegelman. He knew that this would make someone predisposed against Siegelman the perfect hanging judge. And he would reap the benefit of the class action suit on the side."
The Siegelman/Scrushy criminal case and the HealthSouth lawsuit intersected in May 2006. An investment banker testified in the criminal case that he had been pressured by HealthSouth to come up with $250,000 for Siegelman's education lottery fund.
Stein quotes two sources who say this revelation contributed to HealthSouth's decision to pay $445 million in the civil case, one of the largest settlements in securities-litigation history.
How much did Rob Riley benefit from this settlement? Writes Stein:
Riley declined to reveal what he made from the case, saying that the amount was "evolving." But he did acknowledge that it was substantial. "It was a very good settlement," he said. "But at the same time there was a lot of work that went into it."
Critics see it differently: Riley knew Scrushy was going down in the criminal trial and saw a way to reap the benefits in the separate civil case.
"Rob Riley approved of the strategy of dragging Scrushy into the [criminal] case because it would have benefits for him in the class action suit," said Horton. "It was clear that he was intently following what was going on in Fuller's court and knew that the conviction of Scrushy in that case would have strong benefits in the class action suit."