[Percentage of African-American executives working at HealthSouth’s corporate headquarters during Richard Scrushy’s tenure: 0%

Percentage of African-American attorney’s working on Scrushy’s defense team: [at least] 37.5%.]

The Holidays, 2004: Prelude to the next last new world.

Scrushy at the holidays. After all that has happened, and the many changes that will come, we can only wonder what his hopes and dreams and fears are.  People don’t pay much attention anymore as our landscape has become increasingly homogenized by the business of progress. Although we become increasingly preoccupied with keeping our own little ship afloat, it is at this time of the year, that our thoughts turn to an idyllic version of our world, a place where there is an abundance of peace and love and forgiveness. And this year, as his trial looms into focus, Scrushy fits well into this enigmatic time, when our ideals meet the cold reality of a country and a planet at the crossroads.

Scrushy’s legal strategy:

It may be a guess based on increasingly strong but circumstantial evidence, and it may be the kind of informed observation that is more easily made by someone outside of the remnants of what was once a media, but it appears that Mr. Scrushy is running his legal team in the same manner and style that he ran HealthSouth. It remains to be seen if he is actually getting better at this kind of heavy-handed management style, or if it is that in spite of disastrous results from his earlier experience, he just still hasn’t learned.

When all of the shouting is done—and there will be shouting—he will get a fair trial, and one of two things will happen: Either he will 1) Walk away free and he will proclaim that he was the sole mastermind behind the legal defense that beat the dastardly government persecutors; or 2) he will be found guilty, and he will seek someone to blame for his misfortunes. It could be the government prosecutors. It could be the other HealthSouth executives. It could be the misinformed public or the ignorant jury. It could be just about anyone but Richard M. Scrushy.

So let’s review the evidence:

These writings have often referred to Scrushy’s legal strategy as an OJ-style defense. In particular, the reference applies to the voraciousness and the promised tenacity of the legal maneuvering. Scrushy and his lawyers are simultaneously attacking the methods and methodology the government used in gathering evidence, while also claiming he is a victim and fall-guy of a conspiracy carried out by other colleagues and executives, at HealthSouth. His insistence that he didn’t know what other people in his company were doing is extremely hard to swallow since he has spent about twenty years claiming that he was the supreme force behind the HealthSouth empire. Even beyond his inflated claims of grandiosity, his manipulation and micromanagement of employees is almost legendary. The HealthSouth headquarters once contained a museum-shrine to Scrushy’s exploits, and a life-sized statue of Scrushy. Around Birmingham, it is said that the HealthSouth campus was full of bad artwork because the always detail-oriented Scrushy insisted on buying and placing the artwork in accordance with his taste. Weekly staff meetings often featured Scrushy berating subordinates over large, small or trivial problems. And now he is claiming that he doesn’t know anything, or as he was characterized by one of his lawyers, that he was merely a CEO-figurehead.

The three high-powered DC-base experienced business lawyers he was using (Abbe David Lowell, Scott Balber and Thomas Sjoblom), have been terminated from the case, and have left his legal defense team. However, these men are still apparently retained by Scrushy, and will be used to argue his SEC case. So what’s the difference between the SEC situation and his imminent criminal trial? Birmingham. That’s what. Birmingam, a city that is 74% African-American, a city steeped in the same Southern culture that wouldn’t except the new-moneyed Scrushy into the country clubs and the circles of the southern gentry. And the city that will now be subject to the full force of Scrushy's HealthSouth-honed style of manipulation. The thinking is that his Alabama team will play much better than the slick East-coasters. Add a few Arfrican-American attorneys and make plenty of references to the civil rights movement, and the always marketing-savvy Scrushy is ready to defend himself.

There is yet another difference between the Washington-based lawyers and his Alabama brain trust. Controllability. Scrushy always felt he had the plan and he always liked to be in control. A few of the co-conspirators in the fraud scheme were little more than secretaries, who had taken a business class or two, before being suddenly elevated to Vice-President status at HealthSouth. He used money and position to surround himself with people he could control. And now he has surrounded himself with a group of lawyers, where six of the seven have little or no experience in complex business proceedings, and who have found themselves at the heart of a dream case, the kind of case reputations and national status is built upon. It is the kind of case that generally mandates and assemblage of the best legal minds in the discipline being tried.  But not this case. It may be an OJ-style defense, but this one’s all Scrushy.

Scrushy's Team

His lead attorney, James Parkman, is a good ol’ boy from Dothan, Alabama. He has a hand written sign in the window of his law office that says: “Hicks that care,” and he has acquired a reputation for court room theatrics which has worked pretty well to keep various minor criminals out of jail.

Scrushy always liked to take care of his friends and family (as seen in the shady deal between HealthSouth and his father’s company, and in the underwear company he set up for his wife that he is alleged to have commingled HealthSouth funds for) and so why should he change his mode just because he is on trial and his power to take care of various people has diminished. In keeping with this spirit, one of the lawyers on his team, R. Martin Adams, an associate in Parkman’s office, is Scrushy’s son-in-law.

Another one of the lawyers, Mavanee Bear, once dated a young George Bush, when he was in the state, working on the political campaign of a family friend. Since this early claim to fame, her law practice has been mostly devoted to family and civil law. Except for being from Alabama, and perhaps fitting a female demographic, it is not easy to determine what her presence will bring to the team. One possible answer is that there is some indication that Scrushy’s attorneys will attack the government witnesses in a ferocious mud-slinging effort, in order to undermine their credibility. And in the legal community, no one knows how to dig for dirt better than a family lawyer.

Leslie V. Moore is another lawyer who has also been smiled on by fortune, and has a ticket to the big time. This one is equally hard to figure because he has no particular legal track record, and in fact, is just two years out of law school, and has been a member of the bar for about eighteen months. Although he brings little or no legal expertise to the team, he apparently has some experience as a private investigator, which might explain his inclusion. They may use Moore to investigate the witnesses, jurors or both.

I have previously documented Donald Watkins presence on the team in the article at http://www.scrushy-report.com/rsselma.html, but although he has some experience with corruption cases, his inclusion is based more on ethnic heritage than forthright legal maneuvering. If people thought OJ played the race card, it will seem tame and far less odoriferous than Scrushy’s attempt to hijack the civil rights movement in the deep south. H. Gillis Lewis and Jacqueline smoke are Scrushy’s other African-American lawyers. Although Lewis has some business law experience, Jacqueline Smoke’s experience is primarily limited to slip and fall type of litigation. But demographics will supersede experience, in this Scrushy directed defense strategy.

Rounding out Scrushy’s defense team is Arthur Leach, who has already made a minor name for himself in this case by violating the judge’s gag order. It appears that the team was exercising their one free get-out-of-jail free card because on the first time the envelope is pushed and the line has been crossed, the judge will most likely issue a warning before handing out contempt citations. And of course, the jury will disregard. In this case, it is the people of Birmingham who will be asked to unhear Leach offering his opinion of some of the government filings that he said were full of lies and distortions. Leach is a former US attorney, who specialized in forfeitures.

Opening Salvos and Misfires:

Since his original DC lawyers won one of the early battles in the case, concerning the imposed forfeiture of Scrushy's assets, the reconfigured Alabama-team seems to have trouble getting its bearings in a case of this magnitude, and some of their legal pleadings have been rather questionable.

His defense will be at least a two-pronged attack, and it is likely he will continue to fight on multiple fronts, for the duration of the trial. One of the defense’s pincers will concentrate on technicalities that will hope to weaken, undermine or damage the government’s case, so he could possibly get off not because he is innocent, but because the government made mistakes while gathering evidence and building their case; or because they were able to successfully undermine the credibility of the witnesses. And the other thrust will be that regardless of the technical problems, he is innocent anyway, and that he was a victim of a fraud perpetuated by people who worked for him, people he trusted. His trial will give him the benefit of a doubt as our justice system gives all defendants, but it will be interesting to see how the victim motif plays out, since he prided himself--where HealthSouth is concerned--in being everything, doing everything, and being the one who had the vision, the plan and the means to carry it out. Now we can only wait to see what will happen when his over-inflated narcissistic pride meets the reality of trying to save himself from prison. His contradictory and convoluted defense strategy will overlap and fold over itself, as it is made clear when he is trying to suppress evidence gained in search warrants of his offices, at HealthSouth, while at the same time, presenting himself as a victim of a fraud perpetuated by underlings and out-of-control executives. If this is true, and the fraudulent activity was carried out by another group of conspirators, wouldn’t the material that he is trying so hard to suppress prove this point?

Some of the early skirmishes include the following:

• Challenging the admissibility of a tape recording that was gathered by wiring another cooperating co-conspirator. They have challenged the validity of this tape as evidence on the grounds that it would be possible to alter the recording, even though there is no evidence that anything of this nature has been done. They also challenge that the tape was not verified or time-stamped even though the person wearing the wire was an eye-witness to the conversation.
• They have challenged the validity of information gained in a search warrant at HealthSouth headquarters because the attorney that gave the investigators access to the relevant material, and Scrushy's offices, was not an attorney who was authorized by Scrushy to give such permission. Since the search occurred on HealthSouth property, and Scrushy was no longer employed by HealthSouth, his claim to have any private property on HealthSouth's property doesn't seem to have much validity, and at least from my lay-vantage point, it appears that the attorney would have the authority to grant access.
• The defense has challenged several of the counts of the indictment that were charged under the new Sarbanes-Oxley act (Scrushy was indeed the first executive to be charged under this new law). Congress passed Sarbanes-Oxley in the wake of the Enron and and WorldCom scandals, in order to stem the tide of executives looting public companies. The act essentially says that if a corporate executive signs a document that will be filed with a government agency, like the SEC or IRS, then he is certifying, by his signature, that he knows the information in the document is true and accurate. The act was an effort to bring some accountability to corporate executives. Since Scrushy was the first to be charged under this act, his lawyers predictably challenged the law on Constitutional grounds. They said that the language was vague and that the law was passed too hastily by a nervous Congress. Their motion was denied.

I will later publish a whole document about Sarbanes-Oxley and its relationship to this case, so I won't bore readers with details at this time, but the arguments that Scrushy's team advanced seem rather silly from every vantage point imaginable. And this is worth mentioning because on the surface, this denial was just a minor skirmish and the defeat of an obligatory flier that his defense team employed, but it might have a wider portent of things to come, and of the possibility that his defense strategy will backfire, both because of the competency of his inexperience lawyers and because of a backlash from a public (at least twelve of them) who didn't buy into his blatant attempts at manipulation.