Siegelman Case Involved No "Meeting Of The Minds," But Scrushy Still Spent Six Years In Federal Prison

Richard Scrushy

A fundamental element of a federal-funds bribery case is that the defendants have a "meeting of the minds" on a "something for something" deal known as a quid pro quo.

Former HealthSouth CEO Richard Scrushy was released from federal prison last summer after serving six years for bribing former Alabama Governor Don Siegelman. But Scrushy said he didn't have a "meeting of the minds" with Siegelman on any of the issues that prosecutors claim constituted a crime. In fact, Scrushy says, he didn't meet with Siegelman at all. That's largely because he barely knew Siegelman, he did not support his election campaigns, and he did not support the education lottery that was central to the governor's term--and ultimately, the government's criminal case.

How on earth did Scrushy get convicted for bribing a governor he hardly knew, did not support, and did not meet with--over a seat on a health-care regulatory board that Scrushy says he did not want? That might go down as one of the great mysteries in the history of American criminal law. To make it more stunning, Scrushy says the government got it wrong about the person he met with and the amount of money involved.

That is one of many revelations from Scrushy's recent interview with San Francisco-based radio host Peter B. Collins. We already have reported that key testimony from former Siegelman aide Nick Bailey was deeply flawed, and prosecutors offered to let Scrushy out of the case in exchange for false testimony against Siegelman. Now we learn that central "facts" in the government's story were wildly off target. A podcast of the full interview can be heard here.

Perhaps most important is this: The government said Scrushy bribed Siegelman for a seat on the Alabama Certificate of Need Board (CON), but Scrushy said he did not even want to be on the board. How do you bribe someone for something you do not want? Here is Scrushy, from the Collins interview:

When Governor Siegelman was elected, he asked me to serve [on the CON board], and I said no. I had no interest in serving. I had resigned under the previous governor, Fob James; I did not complete my three-year term under Fob James. . . . I didn’t want to go to the meetings, and I was tired of it.

That leads to a second major flaw in the government's version of events. Scrushy's rejection touched a nerve with the new administration, but the CEO did not hear about it from the governor. He heard about it from former Alabama Power CEO Elmer Harris, who was chief of the Siegelman transition team. In fact, Scrushy's communications were pretty much exclusively via Harris--and none of them involved a "meeting of the minds" that would amount to a bribe:

Governor Siegelman’s transition chief, Elmer Harris--who was president of Alabama Power--came to see me, and he said, “Look, the governor really wants you to do this. You’ve served under these other governors, and it’s really an insult to tell him you’re not going to do it.” I didn’t have a relationship with Governor Siegelman, I didn’t support him, I had not given any money for his campaign. But [Elmer Harris] said, "Will you serve some time [on the board]?" And I said, "I will give them a year, and then I’m going to leave." And that’s exactly what I did."

A third flaw in the government's story, Scrushy says, involves the amount of money he eventually gave. Court documents and press reports repeatedly have said Siegelman wanted, and Scrushy gave, $500,000.  But Scrushy says he only gave $250,000--and that did not involve a "meeting of the minds" regarding a seat on the CON board. In fact, Scrushy says, he already was on the CON at the time of the donation and was about to go off the board, per his agreement with Elmer Harris.

What has caused confusion about the amount of Scrushy's donation? Scrushy says it's probably because the Siegelman administration asked him for money twice--once for the education-lottery campaign and once to help pay off debt once the referendum had been defeated.

The first request met with a flat rejection from Scrushy. But he says a member of the HealthSouth team helped arrange a donation from another source, a company called Integrated Health Services (IHS), based in Maryland. From the Collins interview:

I was in a management meeting at HealthSouth and told my people the governor had called and asked if I would help, and I told him no. One of our guys called an investment banker in New York and said if they knew of anybody who wanted to help, let him know. Apparently they did have a company that was doing business in Alabama and wanted to get involved, and they donated $250,000. It had nothing to do with me at all.

Scrushy's only contribution, of $250,000, came after the lottery had been defeated, and the Siegelman administration was dealing with debt left from the campaign:

They had to pay off the debt to the Democratic Party, and wealthy businessmen in Alabama had signed on the note and were paying down that debt. Elmer Harris again came to see me, and he said Alabama Power was putting in $100,000, and ALFA Insurance was putting in a bunch, and he named a bunch of other companies that were paying it down. He said, "You’ve never helped the governor and never given him a dime, you’ve never done anything in the state of Alabama to help this guy. Can you help these businessmen pay down this note?" And I said, “OK, I will put in $250,000."

Now, I already was leaving the CON board. And we wrote a check to help pay down that debt to the Alabama Democratic Party, which was all we ever put in. But it’s still in the media that I gave $500,000.

In the interview with Collins, Scrushy still seems to have a hard time believing he was prosecuted, much less convicted, for actions that did not come close to meeting the definition of a federal bribe. He points a finger for the whole charade squarely at Republican strategist Karl Rove, who apparently wanted to make sure that Siegelman, a Democrat, could not continue to win races in a GOP stronghold:

[Siegelman] and I never had a conversation about any of this. The transition chief sat down with me and said, "Richard, you need to help. Everybody else is helping. You run a large corporation, and you need to help get these businessmen off that note. . . . " I felt a corporate duty for me to help too, but the question is, "Why weren't these other people [who helped] indicted . . . ?" It was politically convenient for them to pull me into this because of what I had been through at HealthSouth. . . . 

Siegelman was going to win the governorship again, and Karl Rove didn’t want that to happen. [The governor and I] never had a conversation about, "Richard would you help me do this or that?" It just didn’t happen.

(To be continued)


Previously in the series:


Richard Scrushy: Convictions In The Siegelman Case Are Grounded In A Former Aide's Flawed Testimony (April 8, 2013)

Feds Promised To Release Scrushy From Prosecution If He Provided False Testimony Against Siegelman (April 9, 2013)