[NEWSMAN 1] HealthSouth CEO Richard Scrushy was indicted on...
[NEWSMAN 2] Scrushy built Birmingham-based HealthSouth into a Fortune 500...
[NEWSWOMAN] Richard Scrushy was indicted on charges
he orchestrated one of the biggest accounting frauds in US corporate history.
[WATKINS] High-profile cases,
there are two trials:
Outside the courthouse and inside.
Court of public opinion is very important. That's the first trial.
People generally get their view of trials
and... and law and all that stuff off TV.
Lawyers in the Richard Scrushy case have a big job ahead of them
even before they can present their cases.
They need a barometer of how things are going in the courtroom.
We had a good day yesterday.
And, uh, I expect us to have a similar day today.
And so, when they hear on the street...
Today they had a good day.
Then they get the sense that this is not gonna be the lynching
that everybody thought it was.
"Wait a minute. Maybe the guy actually has a defense."
Wow, maybe he's gonna get off.
"Maybe he deserves to get off."
Inside the courtroom,
decisions by jurors are based on the human connection.
So during the trial, you make love to everybody.
You get to know everybody.
You want to know how their children are. "What was your son's name again?"
[LAUGHTER]
Because if the building likes you,
everybody feeds off of that.
Everybody in the building likes these guys.
They must be the good guys, right?
I'm not saying the trial's a theater,
but once you know what you're working with and what's not an issue anymore,
the rest of it is just all-out offense.
[TENSE MUSIC PLAYS]
[TYPEWRITER CLACKING]
[TYPEWRITER BELL DINGS]
[DISTORTED SOUNDS]
[FARRELL] Birmingham was the past.
It was the center in terms of civil rights in Alabama
back in the 1960s.
There was not much modern industry.
Whatever old-line industries were there had gone.
And it was pretty clear that better days were behind
until HealthSouth came along.
We're on our way.
[MAN] As the fastest-growing health care company in the world,
with the commitment of health care professionals
that share our chairman's vision,
the momentum of the past decade is taking us right into the 21st century.
[FARRELL] You have a company that suddenly is at the forefront
of a medical health care revolution,
and you've got the chief executive, Richard Scrushy,
who became the evangelist for the company.
He was the center of it.
He was the charismatic leader.
There was absolutely no one like him.
- Richard Scrushy. - Richard Scrushy.
- [NEWSMAN 1] Financial wonder boy... - [BROKAW] Richard Scrushy...
[NEWSMAN 2] ...CEO of HealthSouth, a Fortune 500 health care company.
[NEWSMAN 3] Starting with nothing and building a health care empire
spread around all 50 states.
It's a great day for Birmingham, a great day for this metropolitan area.
[SMITH] Richard was a motivator.
He could take a room full of people,
turn on the charm and the charisma,
and by the end of the meeting,
you're ready to knock the doors down and conquer the world.
This company is the best health care company in the world.
[CHEERING]
He really was a visionary in the health care field.
We grew so fast and were so successful.
We were a hundred million dollar company in five years.
[ANNOUNCER] Ladies and gentlemen, Richard Scrushy.
[FARRELL] The bigger HealthSouth became, the bigger Richard became.
Richard Scrushy very much wanted to be someone like Steve Jobs,
where he would be the center of attention, he would be the front man.
Now, not all businessmen stay in their three-piece suits after work.
In fact, this particular businessman turns into a rock star.
[WHITMIRE] When I say he wanted to be a rock star CEO,
he actually wanted to be a rock star.
He wanted to do something next level.
Who will survive in this fierce health care landscape?
That is for each of us to decide.
[FARRELL] Certainly by the 1990s, Richard was very well paid.
He's a very prominent, successful citizen in Birmingham,
and he gives money to all sorts of great causes.
I have a check that was...
I'm presenting to you 100,000 dollars,
which is the first check we're gonna present today.
[APPLAUSE]
He was certainly a "local boy makes good" story.
[WALLACE] You can drive on the Richard Scrushy Parkway
to the Richard Scrushy Campus.
There's the Richard Scrushy Building,
the Richard Scrushy Library,
the Richard Scrushy ball field.
[NEWSWOMAN] Scrushy captured the American dream
and is helping others do the same.
[ALL] Thank you, HealthSouth!
[MAN] Good morning.
Earlier this morning in Birmingham, Alabama,
an indictment was unsealed charging Richard Scrushy,
the former CEO of HealthSouth Corporation,
with fraud, money laundering, and other offenses,
based on his participation in a multi-billion dollar scheme
that defrauded members of the public who invested in HealthSouth.
[NEWSMAN] Federal prosecutors today accused Richard Scrushy
of personally directing one of the largest financial scams in corporate history.
Another flamboyant CEO accused of multiple federal fraud charges,
including overstating his company's earnings
by billions of dollars.
[MARTIN] This was major.
One of the largest financial frauds
in the history of the Department of Justice.
[NEWSMAN 1] With that money, investigators say, he bought four houses,
one visited today by the FBI,
and spent millions on himself.
Racing and leisure boats,
fine art by Picasso, Renoir, and Miró.
[NEWSMAN 2] And now Scrushy could lose it all.
All told, Scrushy could be looking at 650 years in prison.
[NEWSMAN 3] Federal prosecutors had major help building this case
from former top officers of HealthSouth.
[NEWSMAN 4] Five former chief financial officers at HealthSouth
already have pleaded guilty and will testify against Scrushy.
I was confident that Richard Scrushy knew about the fraud.
It was a classic case of greediness.
Richard Scrushy was a poster boy for "it's not enough."
[WALLACE] There used to be a Richard Scrushy statue,
but after someone spray-painted the word "thief" on it
and a radio DJ urged people to pull it down
like Saddam's statue in Baghdad,
workers removed it.
There was a lot of schadenfreude
and a lot of anger in Birmingham
when the fraud became public at HealthSouth.
I moved from Atlanta to here
to take a wonderful job with a wonderful company,
and Richard Scrushy screwed it up.
It makes me angry.
I think that he should've upheld higher standards.
He's guilty to everybody in this town.
[WHITMIRE] We had national attention. We had lots of local outlets
that were focusing on it.
It was every bit as big a story as Enron was.
I started writing a column called Scrushy Watch,
which was just sort of this,
you know, a little bit gossipy, a lot of voice to it.
We made it very much about Scrushy.
All of this conspicuous wealth that he had.
People like watching the mighty fall.
[NEWSMAN] A lifestyle fueled by greed.
[NEWSWOMAN 1] Homes, boats, jewels.
[MAN] He was new money
in a way that would make Donald Trump look like a pauper.
[NEWSWOMAN 2] Ten boats, including the 92-foot luxury yacht Chez Soirée.
Over 30 cars, including two Rolls Royces and two Hummers.
Here in Birmingham, Alabama, where the median family income is $48,000,
Richard Scrushy's outsized wealth put him on a pedestal.
I wonder if they'll let him, uh, move his car collection down to prison.
[SCRUSHY] When I look at the entrepreneur and the visionary,
that's somebody who can see opportunity.
You've got to have the right vision.
You've got to have the fire in your belly.
You cannot be afraid of the risk.
HealthSouth was very, very important to me,
and I did live and breathe it every day.
Once I was indicted,
I was accused of things that I would never do.
The media took everything that I ever bought in my life
and put it in the newspaper
to make me out like I'm some horrible criminal guy
because I had a boat and a few nice cars and a couple of houses.
I mean, come on.
I'm innocent, right? Until proven guilty?
I needed somebody now that believed in me. Somebody who would fight for me.
The first group of attorneys I had said, "I don't want you talking to the press.
I don't want you doing anything."
That... That didn't sound right.
I mean, I'm getting beat up every day in the press.
Alice Martin's out there saying all these horrible things
that are not true, and I can't say anything?
Along came Donald Watkins who said,
"Public opinion is as important as anything.
And if you don't say anything, you're really gonna look bad."
[WHITMIRE] Early on in this case, Richard Scrushy has a choice to make.
"Do I go the conventional route?"
Abbe Lowell, big shot, nationally prominent defense lawyer.
"Or do I put my life in the hands of Donald Watkins?"
One never loses sight of the struggle
that black people have undertaken for decades in this city.
He is a different type of lawyer.
Someone who's not afraid to say whatever he feels needs to be said
in the press, in the public, in courtrooms.
Richard Scrushy chose Donald Watkins.
And everything that happened after that
happened because of that decision.
[WATKINS] I knew 85 counts.
Man, that's a tall order.
I'd done criminal cases, maybe ten counts, 20 counts,
nothing of the magnitude of 85.
I saw it as a challenge.
Richard Scrushy was the most hated man in Birmingham.
He was the devil.
Your jury pool is coming from regular folks out here
who are exposed to all this mainstream media.
So, we need to hit back in the same news cycle,
put our story out there all of the time.
That's when the mobilization began.
[DRAMATIC MUSIC PLAYS]
Donald Watkins said, "You've got to go out and talk to these people."
You've gotta tell the press the truth. You and your wife need to get out there."
We were fully on top of the situation
and... and reported everything we knew as soon as we knew it.
And that's what the facts are, and anything else is just not true.
"Wall Street Journal calls, you talk to them.
Somebody calls you, they want an interview? You talk to them.
You tell them you're innocent. Tell them you didn't do it.
"Let's get it out there. Let's work it."
You say you didn't keep track of the accounting.
- CEOs don't do that. CFOs do that. - [WALLACE] I know that.
Chief Financial Officer means he is the chief financial officer.
You've gotta understand the incentives that people have.
Look, we're gonna give our side of the story.
First of all, there's no evidence against me,
and I believe that 12 reasonable people will rule in our favor.
I just think he's an amazing man.
I'm so thankful to be married to him.
- You're not going to jail? - No... No, I'm not going to jail.
I'm an innocent man. I'm not going to jail.
[PEOPLE CHATTERING INDISTINCTLY]
[WATKINS] This is not defending a lawsuit.
This is a rescue mission.
You cannot win any case
if you don't understand the forces that you're fighting.
The white community hated him for the most part.
But the black community was neutral.
And so, I told Richard,
"That community may run to you when you're in trouble"
and not run from you.
"And it may make a difference in your life and the outcome of this circumstance."
And he... he was quick to pick up on that lesson.
You need to realize. I need to keep focusing on what God say.
God's word will stand.
If God's word says I'm healed, I keep saying,
"I'm healed. I'm healed. I'm healed. I'm healed. I'm healed,"
until the manifestation comes.
Because if I expect it, God will bring it as a manifestation.
[LOWE] Richard Scrushy, he came to me and he said,
"Bishop, I've been hurt."
I've been hurt by what people said about me
and about my family.
I need a place where my family can worship.
"I felt like this is where the Lord told me to come."
[SCRUSHY] There were white churches I couldn't go into
because the congregation was made up of many of the white haters.
You know, they wanted to believe that I was the monster
that the media was trying to make me out to be.
The black community welcomed us,
and maybe it's because of the persecution that they went through.
For some reason, they understood persecution
a lot better than a lot of white churches.
During this period of time,
Leslie and I got deep into studying scriptures
and the Bible and theology.
[LOWE] And Richard said, "Bishop, I got caught up in the business world."
He said, "I've been hurt."
I've cried many times, and...
"and I believe that God had another purpose for my life."
say God help me.
[NEWSMAN] From the corner office to the pulpit.
When he's not proclaiming his innocence after being charged with fraud,
Richard Scrushy spends a lot of time praying and preaching.
Sometimes we're not sure
about what we're seeing and what we're hearing,
and sometimes we miss things.
[LOWE] After a period of time, the news media found out,
and they showed up.
They said Richard Scrushy joins an African-American church,
and they said it was all manipulative to poison the jury pool.
And they asked me how did I feel that he might have done that?
And I said, "Hold on. You don't understand something."
We're talking about the word of God here."
I saw him speaking what was from his heart.
[REFLECTIVE INSTRUMENTAL MUSIC PLAYS]
[WATKINS] Scrushy had a foundation, a philanthropic foundation.
You know, he used to give to stuff like the symphony and...
and, you know,
museum kind of stuff, you know.
And he was persuaded that that is fine and that's deserving and all that stuff,
but you might want to redirect some philanthropic money
to communities that are not used to getting your kind of money
in any significance.
[WHITMIRE] So Richard Scrushy starts going around in Birmingham
from church to church to church,
speaking, talking about his story,
talking about his... his faith,
and, you know, leaving money behind when he leaves.
[LOWE] Richard did a lot for a lot of churches.
Provided roofs, carpets.
He was very generous.
He gave a lot to the African-American community.
I told him, "These churches and these people"
need to hear the word of God that you've got.
Give to them the greatest thing that you have,
"and that's your ability to minister God's word."
[UPBEAT MUSIC PLAYS]
[RANDALL] One day, I get a call from Richard.
And he goes, uh, "I bought a TV show",
and, um, I want you to run it."
I went,
"What?"
Welcome to Viewpoint. I'm your host, Richard Scrushy,
and with me today is my wife and cohost, Leslie.
On Viewpoint, we allow our guests to present their views and opinion
without negative media spin.
We believe the truth and positive views will have a great impact on our community.
We are honored to have Chief Justice Roy Moore
in our studio today.
We will speak with him about his past tribulations,
present trials, and future victories.
If you watched the local media, everything was bad.
He said, "I've gotta do something to try to defend myself."
No weapon forged against you will prevail,
and you will refute every tongue that accuses you.
This is my buddy that was getting, uh, you know, hammered.
We had to create our own little Fox Network,
if you will, to do something.
We told the people the truth.
A central figure in one of this country's biggest corporate corruption scandals
is dealing with his post-indictment, pretrial life in a most unusual way.
[NEWSMAN] The alleged mastermind of one of the worst cases
of corporate fraud in history
has gone from CEO to religious talk show host,
with his wife at his side.
I'm working very hard to,
and Leslie and I, to get closer...
closer in our relationship to God.
[WHITMIRE] Richard buys time on television
so that he can put on a morning religious program,
like a morning religious talk show.
Be sure to choose God's path
because the path you choose will determine where you spend eternity.
Nobody had really seen this side of him before he got indicted.
He reinvented himself as a sort of televangelist.
- Ever seen anything like this before? - Never seen anything like this.
[NEWSWOMAN] Some saw it as an attempt to influence.
Birmingham's Bible Belt jury pool.
A lot of people see this for what it is, basically a Richard Scrushy infomercial,
uh, and they resent that.
Is this an effort to soften the jury pool?
If the jury pool's been tainted, it's been tainted the other way,
and it's been tainted by those that have spread the lies,
said the things about us that are just simply not true.
[WATKINS] The South is a big religious deal.
No matter what the jury composition,
there are gonna be churchgoers and there are gonna be people of faith.
[INAUDIBLE]
[WATKINS] We knew he needed to be on TV, in his own words, he and Leslie.
This is a different way of messaging.
Twelve people gonna decide your fate. You never know. You never know.
If you'd like to get the latest and most accurate news
regarding my situation, please visit my website,
www.RichardMScrushy.com.
[WHITMIRE] When Donald Watkins was building the defense team,
everyone expected
400-dollar-an-hour defense lawyers
from New York or DC.
But Donald knew the value of a home-field advantage.
They needed somebody who could talk to an Alabama jury.
[WATKINS] You know, we tried the out-of-state lawyers,
Washington and New York guys.
We brought 'em down, and it wasn't working out.
Alabama requires a down home talent level.
You just need to be baptized in the Alabama experience.
You gotta have a Southern drawl.
You gotta go to church.
You have to know about the Crimson Tide, the Auburn Tigers.
It's hard to come in from outside the state
and... and have that.
And if you don't have that, you don't have a connection
with the people sitting on the jury.
Scrushy had a guy,
I didn't know who he was.
His name was Jim Parkman.
The guy was in DUI court,
like, maybe two weeks before he came up to see us.
He was a good ol' boy.
A good ol' boy.
[PARKMAN] Donald said that he had heard about me.
And they felt like they needed a lot more personality
than what the government generally brings.
And I agreed with that. And we talked about that.
At the end of it, he and Richard talked for a minute,
and Donald came back in and said, "You're hired."
[WATKINS] The guy didn't have a big profile.
He hadn't had any landmark cases that went to the Supreme Court.
But if he was capturing my attention
and had me spellbound,
I knew he could do that with a jury.
[PARKMAN] I had a dream of doing a big case one day,
from the day I was in law school.
I knew. "This is it, Jim."
Here's your pressure, buddy. Let's see if you can do it."
[WATKINS] It seemed like this was the perfect case
with all five CFOs confessing, pleading guilty,
pointing the finger up at the guy at the top.
I knew that it was a political event of presidential magnitude.
Ninety days out now,
the government dumped these six million, or maybe nine million pages of records,
computer records, just...
It was a data dump.
Our team went through those documents three times,
looking for anything to corroborate
the testimony of any one of those five CFOs,
and there was nothing there.
[PARKMAN] The government's case is what we refer to in the law
as a "Swiss cheese case."
That means, "Boy, folks, there are a lot of holes in it."
The government relied on the CFOs' testimony.
And so, what we'll do is take them down
and show another hole, and we'll show another hole,
and at the same time, make it fun.
Now that... that... that's the key to this.
Jurors like good stuff.
They don't want to hear all this stuff about a fraud.
That would drive you up a wall had to listen to all that crap.
We had to make it that when I stood up to do cross-examination,
they leaned forward in the pew getting ready. You know,
"What's he gonna do? What's he gonna say? How's he gonna do this?"
That's what we wanted.
[MARTIN] Our narrative was that Richard Scrushy
has taken advantage of people
that trusted the numbers that he put out
when they were false,
and they lost their life savings.
And all because somebody was too greedy
and wanted the company to grow too fast.
He needed the stock to perform
so he could make money.
Richard Scrushy was a visionary.
He had a great business idea.
But he didn't want to fail.
And he always told his officers,
"I'm not gonna report
that we have missed our projected earnings."
You know, so, what are you gonna do?
Commit fraud. [LAUGHS]
[ANNOUNCER] This is ABC 33/40 News at 05:00.
[NEWSWOMAN] Former HealthSouth CEO Richard Scrushy gets his day in court.
After much anticipation, this trial is about to get underway.
And the jury is ready to hear the testimony
in the trial of former HealthSouth CEO Richard Scrushy.
We've been waiting a long time for the trial to start,
and we're ready to get the show on the road.
[WATKINS] The government comes in with all these guys, big briefcases,
and titles that I can't even remember, the titles are so long.
Parkman comes in with the brown, beat-up, expandable folder,
you know, with the yellow legal pad with sticky notes all over it.
[PARKMAN] There were butterflies from the time I got up that morning.
Richard had passed on the best of the best in Washington,
the best of the best in New York City,
and decided to run with me.
This was a case of a century.
And here I was, cast in the middle of it.
[REPORTER] Are you confident going in today?
- [MAN] Richard! - [APPLAUSE]
- [SCRUSHY] Thank you so much. - [WOMAN] You're welcome.
- We're praying for y'all. - [SCRUSHY] Thank you.
[MARTIN] Our opening statement told, through the use of PowerPoint,
of when the company was founded,
the names of the founders,
the business of HealthSouth, how it made money.
These reports, these 10-Ks and 10-Qs
that the Securities and Exchange Commission requires,
those are statements that if you lie on them,
that's a federal crime, essentially giving the jury a road map
for what the testimony would be over the next couple of months.
I'm sitting there,
I'll be honest with you, making faces to the jury, like,
"Oh, God," you know.
"Let's get this thing. Come on."
Now comes our point.
[WATKINS] "Hi."
I-I'm Jim.
I don't have no title.
I'm from Dothan.
And for those you who don't know where Dothan is,
when you're leaving Birmingham and going down to the beach,
"that's where you stop to fill up with gas."
And then everybody breaks into laughter in the jury box.
I could see the jury falling in love with him.
And I said, "Wow, folks",
do you hear all this stuff that this government said in this case?
Good gracious alive.
"It doesn't sound like we stand much of a chance."
Stop right there.
So now I'm playing to that role
of "we're the underdog."
And because everybody likes an underdog.
Nobody likes the New England Patriots.
So now I've given them that.
"We don't have much of a chance,"
except for something my grandmama used to tell me
when I was growing up as a young boy.
'Remember this, Grandson.
No matter how thin they make a pancake,
it still has two sides to it.'
So what I'd like to do is you've just heard
the side from the government.
What I want you to do is let's flip that pancake over, okay?
"And let's cook the other side."
You would be surprised how many jurors you see nodding,
going, "Yeah, yeah, yeah. I see that."
So that started the pancake thing.
Yes, what was that pancake spatula?
The two sides... Oh, God.
"My grandmother used to always say..."
"It's like a pancake," he said. "There are two sides to every issue."
"No matter how thin you pour a pancake, it always has two sides."
He said, "Now we're gonna show you the other side of the pancake."
He says, "No matter how thin a pancake is",
it has two sides."
I think someone gave him a spatula at one point.
[STEWART] It reads, "No matter how thin you make it,
there are always two sides to the pancake."
Of course, we will stand by and continue to find out
just what is on the other side of that pancake.
Reporting live from downtown Birmingham, Kevyn Stewart, ABC 33/40.
[BIRDS CHIRPING]
[FARRELL] Richard's wealth, the flaunting of the wealth,
the public displays of the wealth, became a bad fact during the trial.
Details would be filed in court about his lifestyle,
and that very much became the story.
Instead of building HealthSouth, it was about,
"Oh, my God. Look at all this wealth. What has he done with it?"
The boats,
the paintings,
his own personal fantasy of becoming a country music star.
This is all funded by shareholder money.
And, uh, these were some of the best facts the government had.
It was just like, "Look at all this."
[WATKINS] Look, the man's reputation has been trashed.
You know, think what you may about him,
but one thing people cannot take from him
is that he led this company from nothing
to a Fortune 500 global leader.
It takes a little skill to do that.
It just doesn't happen to you because God shines on you that day.
[PARKMAN] The government was showing all these cars that he had
and these houses and pictures and money and all this.
But we wanted to show them
that he started from the same roots they came from.
Yes, he had these things,
but he earned them.
[SCRUSHY] I grew up in a very humble environment.
Our house was small.
The neighborhood was not the best neighborhood.
My parents instilled in me
that I could achieve any goal I wanted to achieve.
I had my first job when I was ten, 11 years old.
I was working in a hamburger joint.
I always had money in my pocket 'cause I was willing to work.
I remember the day
that Martin Luther King marched over the Edmund Pettus Bridge.
My father looked at that and said,
"Come on. We're going down there. This is historic.
I want you to be able to say you saw it."
And I was just a young kid, 12 or 13 years old,
and I watched the whole march.
[WATKINS] Richard Scrushy did not come from the country club crowd
in Selma, Alabama.
This guy took the time to go to school.
He was a respiratory therapist.
Not a highfalutin job, right?
Worked hard.
Saved his money.
Got with three or four of his buddies and said,
"You know what? We oughta try to do a rehab business."
[SCRUSHY] That company was very, very important to me.
It came from 20 years of building, and working,
and sweating blood, and traveling all over the world.
Just... I mean, it's hard.
If you make enough money, you can buy your own airplane, have your own boat.
You can have exotic cars.
Yeah, I mean, I did all those things. Everybody does.
What makes people get up and go throw themselves
after a vision like I did?
To end up with nothing?
No, I don't think so.
Now, if you're envious because somebody worked their butts off,
and took a chance on their own dreams,
and realized to some degree their own dreams,
and enjoyed the fruits of their labor,
you're not mad at him. You're mad at yourself
because you didn't take a chance on yourself.
The defense story was that Richard's a victim too.
And he's just a little ol' respiratory therapist
who made it good on an idea,
but he was depending on these sophisticated people,
and they... and they, uh, led him down the wrong path,
and so that became the narrative.
I had no doubt in my mind
that Richard Scrushy was guilty of the financial fraud
occurring at HealthSouth.
We had five CFOs that could tell you what Richard Scrushy had said to them.
And they said, from the very beginning,
when it was on the NASDAQ,
that HealthSouth never reported true numbers.
[BELL DINGING]
[SMITH] The financial world back in the '80s and '90s
is really a bit different today.
It was a bit more of the Wild West back then.
[EXCITED CHATTER]
People were paid well, but at the same time,
they knew their real pot of gold was in the stock options.
That definitely tied into this need to meet the Wall Street expectations.
[BELL DINGING]
[BEAM] We started the company in '84,
and by September of '86, we were a public company.
We had an aggressive, aggressive plan.
But in the summer of 1996,
we had missed our second quarter pretty badly.
[INDISTINCT]
Bill Owens, my chief accountant, and I
prepared ourselves to go into Richard's office
and tell him that we had to report bad numbers.
His face turned red, and he started trembling.
[YELLS] "Get out of my office!"
We're not going to report bad numbers.
Have you guys lost your minds?
Get back into your office
"and get these numbers to where they need to be."
I didn't have the courage to stand up to Richard and say no.
That night, Bill Owens just bogeyed up numbers,
cooked the books.
And that's how the fraud started.
Our year-end earnings per share
exceeded the analysts' expectations on Wall Street,
and we had increases in all business lines.
So, net result,
we had an incredible year, so give yourself a hand.
Bill Owens moved up and opened the way for me to become CFO of the company.
HealthSouth was growing,
bonuses were starting to flow,
and Richard bought his first yacht.
Everything is looking good financially,
at least on paper.
But, at the same time,
the fraud is growing out of control.
It had gotten so large, they were paying more in taxes
than they were actually making.
It was that upside down.
[INAUDIBLE]
[SMITH] Richard was pushing people to their limits,
pushing people to work as hard as they possibly could
to make things happen.
It wasn't a question of right or wrong.
It was just this mindset of "we have to hit the numbers."
His fortune and fame was tied to the options.
It was tied to the price of the stock of the company.
So as long as the company's being promoted,
as long as it's "hitting its numbers,"
Richard is the king.
Donald and I got a comment. Y'all want it?
- [REPORTER] Yes, sir. - Okay.
You're continuing to see the chapters unfold in this book,
and there are a lot of chapters to come.
We have a lot of our own witnesses, and plus, we intend to...
to vigorously cross-examine each one of the government's witnesses,
so just stay tuned and follow us through each chapter.
Jurors, they don't have a long attention span
for detail kind of stuff, you know, a lot of records and stuff,
but what they do understand well
is whether a person is truthful.
And if the witness is not truthful and the testimony is disregarded,
you have no case, government. You have no case.
So, with those five CFOs,
what we have to do is make each one of those people confess
that they are basically liars.
[POTEAU] Former HealthSouth founder, CFO Aaron Beam,
picks up his testimony today.
The co-founder of HealthSouth says
Richard Scrushy knew every move that was made in his company,
especially financially.
Aaron Beam has told the court HealthSouth began
"aggressive accounting techniques
to meet Wall Street's financial expectations in the early '90s."
He swore Scrushy told he and HealthSouth's Bill Owens,
"It's not an option to miss the numbers.
You need to fix the numbers."
Aaron Beam concerned me
because he was, in actuality, a long-time friend of Richard Scrushy.
And then we found out that during the time period
that this fraud was being committed,
Aaron had a girlfriend.
He was spending a lot of time with her.
In fact, it was so much time
that he brought her into the corporation, gave her a desk, and hired her.
Well, of course, Aaron was married.
So, a lot of what started on cross-examination with Aaron
was he's been lying to people all of his life.
[BEAM] Day one, the government asked me,
and I'm explaining to the jury how the fraud took place,
and they're immediately falling asleep.
They're bored out of their mind.
The next day, the defense got me: Jim Parkman.
He almost immediately says,
"Mr. Beam, you've had an extramarital affair, haven't you?"
And I looked over at the jurors, and their eyes were that big.
Then he got in my face. He says, "Mr. Beam, when you went to New York City"
and you presented numbers to the investors, you lied.
When you presented the numbers to the accountants and auditors
and the board of directors, you lied.
You are a liar.
You lie so much,
"you don't know when you're telling the truth."
It's true. I mean, I did have an affair.
At the time, my daughter was a maitre d'.
A lady came in one night and said,
"Your father is going to prison, and I hope he rots there."
[VOICE BREAKING] She broke down.
[CRYING]
I'm sorry.
[PARKMAN] As soon as I said, "No further questions,"
the judge said, "You're through," he jumped up and ran out of the courtroom.
Somebody said he went and called his wife and told her before...
before the news broke.
- [REPORTER] Jim? - Yes, sir.
[REPORTER] Was it necessary to go so hard after his character
in terms of his personal life?
I-I don't see any other way that... that... that I...
to do it but that way and be a gentleman about it,
but yet get into evidence that I believe we needed for the case.
[PARKMAN] I really liked Aaron Beam.
Uh, and... and I tell you right now, I hated doing it,
but the guy's up there.
He's trying to... to kill your client.
So I've got to try to kill him. So that's just the way it worked.
Listen, thank y'all a lot.
I'm going to get a drink. See y'all later.
[LAUGHTER]
[BIRDS CHIRPING]
[CHURCH BELL RINGING]
[SCRUSHY] You know, I just think God blesses us every day.
I'm just glad to be alive,
and, you know, just thank Him for everything we've got.
[WATKINS] During the whole trial,
Richard Scrushy was a community kind of guy.
He was at all these churches.
He was on... He had his TV program.
Uh, his philanthropic stuff, redirected philanthropic giving.
He had a good vibe throughout the whole trial.
He had a good vibe.
- He is God's son. - That's beautiful.
- He can lay it down. - Beautiful.
And he has the authority to pick it up again.
- That's beautiful. - Mmm. Amen.
[WATKINS] You know, you need prayer in whatever you're doing,
especially when you're navigating difficult seas
and if you're a person of faith.
And to have prayer leaders with you is never a bad thing.
[WHITMIRE] At one point during the trial, there's this small gaggle
of black ministers who started showing up.
Prayed with Scrushy during breaks.
Prayed with the family before.
We in the media sort of nicknamed them the Amen Corner.
This man has done a lot of good in the community.
He helped a lot of people.
[WHITMIRE] Because Scrushy had put so much effort
into trying to make inroads in the black churches,
the focus immediately shifted to,
"He's bought the African-American community."
[REPORTER] A lot has been made out that Richard Scrushy, some think,
was doing an underhanded appeal to the black community.
[SCRUSHY] They tried to make out the fact
that I had friends that were in the ministry,
that there was something wrong with that.
If I had been just with white people,
they probably would've said I was racist because I didn't have black friends.
[FARRELL] I had never, ever seen anything like this in any other trial.
He had successfully transformed himself into a member of an oppressed community.
[REPORTER] Speculation is Richard Scrushy joined your church
just to influence jurors.
What's the issue about a white man joining a black church?
I got other white members of my congregation.
That me and my people are dumb enough
to be lied to in this manner and... and manipulated and controlled,
what are you trying to say?
It's offensive to me for you to even make that kind of statement.
[SCRUSHY] They saw it as another avenue to attack me.
"So he's a godly man now.
He wasn't a godly man when he did all that horrible stuff, but he's a godly man now."
It's not a pleasant thing
to have people attack your faith.
[BIRDS CHIRPING]
[REPORTER] You guys are looking forward to getting more CFOs up on that stand?
Can't get into that, but, uh, whenever they want to put 'em up there,
I hope we'll be ready for 'em.
The defense strategy was to take these five CFOs,
sort of burnish their reputations,
and then, in the minds of the jury,
condense them down to one.
And that was Bill Owens.
He may be the prosecution's most important witness.
Now, Bill Owens is one of five former HealthSouth CFOs under Scrushy
who pleaded guilty.
Saying his boss told him, "Fix the numbers,"
related to the company's earnings.
He is described as the government's key witness
because he is the one who wore the FBI wire,
secretly recording Richard Scrushy.
[NEWSWOMAN] Bill Owens described Scrushy as a master salesman
who ruled HealthSouth with fear and enough intimidation
to make others go along with the scam.
[MARTIN] Bill Owens was an essential witness in this case.
He was the only CFO
that was privy to the entire scheme from day one.
Bill is the person
who physically made the first several million dollars in entries.
So I do believe that Bill Owens was the orchestrator,
if you talk about who was pulling all the strings and making it work,
but who directed him to play that part,
uh, in our opinion, was Richard Scrushy.
Uh, as Richard said when he read the press release,
you see our revenue went up two percent,
uh, over the prior year in the same quarter.
[PARKMAN] Now, I knew a lot about Bill Owens
because I had an inside source,
Richard Scrushy, that knew a lot about Bill Owens.
Bill wanted Richard's job.
He wanted it big-time.
And he believed in his mind he was so smart that he could pull it off.
Richard assured me that he wasn't gonna change,
that what is a scorpion is gonna be a scorpion.
When he was on the stand, I asked him,
"Bill, in the past, you've gotten up in front of HealthSouth employees,"
and you have made the statement
that you are the smartest man on the planet.
"Is that right?"
And he went, "Yes."
"You're so smart, you're the one that developed this fraud."
You know, you figured... You got it through E&Y.
You got it through the compliance committee, the fraud committee,
because you are the smartest man on the planet.
You hid it from everybody.
"Including Richard Scrushy."
[WHITMIRE] He came off as...
shifty.
And I don't think anybody on that jury
loved Bill Owens by the time he came off the stand.
[BIRDS CHIRPING]
Well, I'd say it's a great day for the people of the United States
because the justice system has worked.
A defendant has been charged.
He's had his day in court.
He's had 55 days in court, and now the case is rested,
and we will prepare over the next few days for our closing argument.
[REPORTER] Are you satisfied with the case you put on?
Very pleased with the case we put on.
The evidence came in just as we expected, and I think it's overwhelming.
[REPORTER] Fifty-five days of testimony.
Complex, tedious, expert witnesses from both sides.
How do you put it in a nutshell for 'em?
Talk fast.
[LAUGHTER]
[PARKMAN] So we get to where we're working on closing.
All the lawyers are sitting around the table,
and I said, "You know",
I think we oughta stay with the same theme:
The Swiss cheese thing.
I wish we could come up with something,
you know, graphic,
"because a picture beats a thousand words. I wish we could come up with something."
And so, one of the young lawyers that was there,
a real smart young guy,
he's got his computer and he's figuring. He goes, "Hey, let me show you something."
Uh, what about using a rat?"
You know, when the ship starts going down,
the first thing off a boat is a rat.
They jump ship,
just like the CFOs.
It fit in with our theory
that the rat is the person
that cares less about the ship and the people on it.
They care about themselves and saving their life.
So I said, "I think I like this. What can you give me?"
And he looked through some stuff, and then he turned the computer around,
and I said, "That's it. Is there any way you can blow this up for me?"
He says, "I'll have it for you in the morning."
I felt a lot of pressure that day.
I knew this closing argument
is gonna make or break you as a lawyer in this business.
Let's see if you can do it.
I got up for the closing argument.
We had two big boards which were hidden.
So when I got to the end of my closing statement,
I said, "And now, let's just get down to the real brass tacks about this case."
Let's talk about the rat.
Who's the rat?" And I pulled off something in front,
and there was my poster of a cartoon rat with the cheese.
And I looked at the jury.
And they all of a sudden started smiling and laughing.
And I knew that they recognized that that rat was Bill Owens.
And my comment then was,
"You'd recognize him anywhere, wouldn't ya?"
And they all just started laughing.
We've got Bill Owens, who is the architect of everything.
And here he is, carrying the government's case,
full of holes.
[WHITMIRE] And then he starts crying.
And he says, "Now..."
I'm just...
a simple lawyer
from Dothan, Alabama.
And if I've done anything to embarrass Richard,
I don't want you to hold it against him.
I want you...
to listen to the man that's coming up after me
"to finish the closing statement."
And everybody thought, "Nobody can top this."
And then Donald Watkins gets up,
walks over to the American flag, picks it up,
and wraps it around himself.
I really wasn't sure that what I was seeing was real.
[WATKINS] What I found that has worked consistently
throughout my legal career is an appeal to patriotism.
I said, "Look, the protection of that flag",
it means a lot to me.
It lifted me from where I was as a child to where I am today.
"And you guys and people like you made that happen."
That's when he got into, uh, one of the greatest stories
that I've ever heard on closing argument.
When he grew up in Montgomery as a young boy, he'd go to town,
and his mother would give him a peppermint.
It wasn't to keep our breath fresh.
It was, if the water fountain
from which we were designated to drink was not working,
it would keep our mouths moist long enough
till my mother could find one that was working.
And then, one day, 12 people like you,
who were strangers to each other and strangers to my family,
and many like me,
said, "No. Miss Watkins' little kids"
can drink out of any water fountain that worked."
Then another group, just like you guys, said that...
use any bathroom... He can sit at a lunch counter...
buy a hamburger, French fries, and a small Coke...
go to any school he's qualified to get into...
said he can go to law school at the University of Alabama...
Twelve people, just like you, sat in a box...
But I don't think that's what the 680,000 Americans...
They had them jumping on top of grenades, taking bullets in the head...
made it possible for me to be here in front of you today...
to represent Richard Scrushy.
This is your Iwo Jima moment.
You were summoned to duty.
It is our duty for the country,
for the Constitution, and for truth.
"Thank you."
[REPORTER 1] Sixteen weeks of presenting evidence that started in late January.
How do you feel now that that section of the trial is over?
Well, we're... we're happy to have it to the jury.
Very happy and very pleased with how things came in.
[REPORTER 2] And again, assessing the attackers,
the prosecution more matter of fact,
going by the evidence that's been presented here. The defense...
Yeah, we talked about the evidence.
The defense talked about, let's see, Montgomery, civil rights,
wrapping themselves in the flag, Iwo Jima.
If you've got an irrelevant subject,
it was probably in the closing you heard today.
- [MAN] So you're the government... - [MARTIN] We're the government.
[MAN] But he's wrapped in the flag.
Securely.
[MAN] How do you beat that?
Uh, we didn't. [LAUGHS]
We didn't.
In a federal courtroom in Birmingham, Alabama today,
the verdict was not guilty.
Not guilty.
Not guilty of any of the charges against him.
[APPLAUSE AND CHEERING]
[PARKMAN] I turned to one of the lawyers, and I went,
"Did we win?"
And he said, "We won, Jim."
[SCRUSHY] I look up and Donald's crying.
I'm like, "Wow.
"This is powerful."
Tears were coming out. They were real. They weren't fake.
I was glad for Richard.
I was glad for his family. I was glad for his wife.
And I'll tell you this, I was glad for Jim.
It worked.
And it was like, "I'm validated now."
What we had to do is we had to combine all the CFOs
and put 'em under the wing of Bill Owens
and let that case ride on Bill Owens alone.
And... And like the cheese and the rat, you know...
Uh, that's right. And I think... I think we did that too.
[WATKINS] I was happy that we won
because I wanted to establish a certain standard
for an African-American lawyer
on a mainstream, high-profile case
that will never be broken in American jurisprudence,
and I think I did that with Scrushy's case.
Every case can be won, period.
We never start out with the philosophy
that it's gonna be "you can't win it."
It's... We start out, we gotta have 36 or 46 or 58 not guilty counts.
We start from there...
- [PARKMAN] How do we get there? - How do we get there?
[WATKINS] Why hang around?
I knew that that was, you know, pretty much it for me.
I left, uh, Birmingham the next day, moved to Miami.
[REVEREND] Let's go home, baby.
- Jesus taught us how to love each other. - That's it. That's it.
We gotta have compassion, folks,
'cause you don't know who's next, who's gonna be attacked next.
I was... You know, I was in that trial.
I saw the circus that they made of it every single day.
I saw that ridiculous defense.
But I still thought this jury is gonna see this and go,
"Okay. Well, this has been wildly entertaining, but come on.
This guy's guilty as sin."
I couldn't believe the verdict.
It was just another case of, "Damn! Richard is really smart."
[LAUGHING]
He pulled it off.
Yeah.
He should have to pay like I had to pay.
I mean, I went to prison. I lost all my stuff.
[POTEAU] Alice Martin would only say
that she was disappointed with the outcome.
We think that we did present overwhelming evidence,
but the jury saw differently.
[WHITMIRE] In the end,
the thing that the prosecution struggled with from the beginning
was to tell a story.
[REPORTER] Alice, what went wrong?
Do you think you made the case too complicated
for this jury to understand?
I don't know. Again, our job is to present the evidence,
and we'll need to hear some feedback from the jurors
to know what were the problems,
uh, that they encountered with, uh, their... their deliberations.
[MARTIN] Every loss is, uh, personal, but the system is beautiful.
And it's one that I stand by,
win or lose.
[LOWE] The purposes of God will always be fulfilled,
regardless of what the plans of man are.
Richard had a spiritual umbrella over him
that covered him, that protected him.
After the trial, I told him,
"The reason you were found not guilty"
is because God gave you grace.
This is your church home.
This is where you belong,
"and you must always remember that."
We did not see him
too much more after that at all.
[PARKMAN] I had a conversation with him right after the trial.
And I told him, I said, "Richard, you know, I hate to say this,"
but maybe it's best that you pick up
and just move somewhere else.
Take the family and go somewhere else.
Start over.
You know? Because there's just too much opinions left in this case here.
I don't care where you go.
Go buy an island.
"Just... Just move on."
And, of course, he didn't do it.
[PROSECUTOR] We're here to announce the indictment
of former governor Don Siegelman,
his former chief of staff, Paul Hamrick,
and Richard Scrushy, former CEO of HealthSouth.
When they came out and indicted him
for the bribery scandal against the governor,
it seemed like a lot of poetic justice.
Don't believe what the government is saying.
They're gonna twist the truth,
and they're gonna say things that are lies.
[SMITH] The charges themselves,
I could see that as maybe some manufactured charges
because they blew the first trial.
However, too bad, Richard.
Payback can be hell sometimes.
I got a call one day, and Richard said, "I want you to come back and talk to me.
I've just gotten indicted on this Montgomery case."
I kind of had a feeling the government was gonna come after him,
but this wasn't that big a case.
I called Donald.
Now, Donald moved on.
He's in Miami.
He's... He's highfalutin it down there with all the millionaires.
And Donald said, uh,
"Don't do it."
You've already won one of the biggest cases in the United States.
"You need to put this behind you and move on."
And so, I said to Richard,
I gave him a fee that was a little high maybe.
And, uh, he said, uh,
"Jim, I ain't paying that."
And he said, "I've already seen how you do it."
So I'll just get some other lawyers,
"and we'll fit your plan in with them, and we'll do it."
Okay. Well, good day for the defense.
[LAUGHTER]
[WHITMIRE] Local prosecutors wanted to give Richard Scrushy the proffer.
The folks in DC said, "No.
We get another bite at the apple. We get another shot."
We just want the truth. That's all we want.
We've been praying, this team of pastors. We've got a pretty large group here today.
We've been praying for the truth.
It's hard fighting the federal government,
even if you're Richard Scrushy.
They're gonna find a way.
[CHUCKLES]
And they did.
[NEWSMAN] Guilty as charged.
Former governor Don Siegelman
and HealthSouth founder Richard Scrushy are now convicted felons.
It's a message to, you know, Don Siegelman,
and to Richard Scrushy in particular,
'cause we just wanted this jury to hold them accountable
for what they did.
[NEWSWOMAN] Richard Scrushy was convicted of bribery
and was sentenced to seven years in a federal prison.
[SCRUSHY] They took everything away while I was in prison.
They took clothes. They took jewelry.
They took college degrees off the wall.
They took everything that I had.
It was very, very devastating to us,
that that could even happen in America.
After five years in prison, you come out, and you don't have a job.
You have no income.
You have nothing.
Yeah, I started over.
Totally started over again.
[REFLECTIVE MUSIC PLAYS]
[SCRUSHY] ...for I do not want you to be ignorant of the fact.
He said, "Look, don't be stupid of this. Don't be ignorant of this."
Don't act like you don't know this. I want you to know that God was there."
[WATKINS] A lot of people thought he got away.
The United States government thought he got away with it.
And I think that's a disservice by those people toward everybody.
He went through the system.
He didn't make this system up. He just was an unwilling participant
who was drug through the system.
And he prevailed.
[NEWSMAN] The big news today out of federal court,
a jury finding Donald Watkins Sr.
And his son Donald Watkins Jr. Both guilty of fraud.
The senior Watkins guilty on all counts:
Seven of wire fraud, two counts of bank fraud
and one count of conspiracy.
[PARKMAN] I found out early on in life that, generally, when you look at the law,
90 percent of the time, it's against you.
Well, doesn't matter about the law.
It's about being able to tell a story.
I'm here to please that jury.
I want them to stay with something they'll remember the rest of their life.
If you ask them about the Richard Scrushy case 20 years from today,
I want them to say, [CHUCKLES]
"Man, that rat poster was great," or... or something. That's what I want.
[MAN] Did your grandma really say that about the pancake?
Uh, no.
I made that up years ago.
She could have,
but she didn't.