Four years after his release from federal prison, former HealthSouth CEO Richard Scrushy says the media still gets key facts wrong about his role in Siegelman case

Richard Scrushy

Imagine serving six years in a federal prison for a "crime" that: (a) You did not commit; and (b) Isn't a crime, as defined by case law, anyway. Imagine that now, roughly four years after your release and a major effort to piece your life back together, the media continues to incorrectly report about key facts of the case that turned your life upside down.

Richard Scrushy, former CEO of Birmingham-based HealthSouth, finds himself in that position. His codefendant, former Governor Don Siegelman, recently made national news when he was interviewed about the corruption conviction of former Virginia Govenor Robert McDonnell--with Siegelman landing in solitary confinement at Oakdale (LA) Correctional Facility, not long after the story came out in The Washington Post.

Siegelman quickly was returned to the general prison population after his punishment became known to the public. For Scrushy, the episode served as a reminder that the public largely still does not know the truth about his role in perhaps the most blatant political prosecution in American history.

The public generally has been told that Scrushy: (1) Gave Siegelman $500,000; and (2) It was to help promote the governor's education lottery.

Neither is true, Scrushy says.

Scrushy did arrange for HealthSouth to give $250,000. But the money did not go to Siegelman; it was given to the Alabama Democratic Party, to help pay down debt after voters had rejected the lottery plan.

Why the confusion? Scrushy points to stories prosecutors repeatedly told the press during the 2006 trial in Montgomery. Prosecutors somehow convinced jurors that Scrushy was responsible for the entire $500,000.

In fact, a Maryland company called Integrated Medical Solutions gave the other $250,000, and that donation came before the lottery referendum--but Scrushy had nothing to do with that transaction, he says.

Prosecutors' theory, repeated often to the press, was that Scrushy gave the entire $500,000, in exchange for an appointment to the Certificate of Need (CON) Board, which regulates Alabama hospitals. In fact, Scrushy says, he gave half that amount, he gave it as he already was stepping down from the CON, and he gave it toward the Alabama Democratic Party's effort to pay down debt on the lottery campaign--at the request of former Alabama Power CEO Elmer Harris, not Don Siegelman.

Also, Scrushy had served on the board under three other governors. In other words, Scrushy was a CON veteran long before Siegelman was elected.

We have been among the media outlets to incorrectly report about the $500,000 figure. But in April 2013, roughly one year after Scrushy's release from prison, we ran a post designed to correct the record. Unfortunately, it hasn't always worked. Here is part of what The Washington Post reported in its recent articles about Siegelman:

Siegelman’s case is the reverse. He gave Alabama health-care executive Richard Scrushy a new term on an important industry regulatory board. But Scrushy’s offering was a $500,000 campaign contribution to push a referendum measure for a lottery that would benefit the state’s underfunded school system.

That, however, is not how it happened. "We weren't going to be a health-care company, operating in the Bible Belt, and look like we supported a form of gambling," Scrushy said. "It was too big a risk, and that's why we did not give prior to the referendum.

"After the vote, I said I would help--as a favor to Elmer Harris and to the Alabama Democratic Party, We felt there was nothing wrong with a company being friends with the Alabama Democratic Party. And a number of prominent businessmen had their names on the note, so I felt it would be good for me to have my name on there, too."

Little did Scrushy know that a relatively straightforward transaction could be so badly twisted--and it's still happening almost 10 years after the trial.