Bloomberg News

Scrushy, Siegelman Rejected in Supreme Court Appeals

June 04, 2012

HealthSouth Corp. (HLS:US) founder Richard Scrushy and former Alabama Governor Don Siegelman were turned away by the U.S. Supreme Court in their attempts to overturn public corruption convictions.

They were found guilty on charges that Siegelman in 1999 appointed Scrushy to a state hospital regulatory board in exchange for $500,000 of political contributions.

Scrushy and Siegelman asked the justices to set a high standard of proof in cases treating political contributions as bribes, to keep prosecutors from putting politicians behind bars for common practices such as naming supporters to government posts.

“It is a simple fact: Money is the lifeblood of modern politics, and most if not all officials are responsive in at least some degree to those who contribute,” Siegelman, 66, said in his appeal. “What degree or type of linkage is enough to take a case across the line from politics into crime?”

Courts should require proof of an “express” agreement -- a spoken or written statement specifically promising a benefit in return for campaign money -- before officials or contributors can be convicted of bribery, Siegelman said. In his case, the former Democratic governor said, the jury was allowed to infer the existence of a quid pro quo from circumstantial evidence.

“We are very disappointed by the Supreme Court’s decision not to hear the case,” Siegelman’s Washington lawyer, Sam Heldman, of the Gardner Firm, said in an e-mail. Scrushy’s lawyer, Bruce Rogow, said in an e-mail he was disappointed the court denied review.

‘Knowing Winks’

The Justice Department, in its brief, said Siegelman’s argument would let corrupt politicians use “knowing winks and nods” to avoid prosecution.

“Under a standard that requires not just a quid pro quo, but one that is verbally spelled out with all ‘i’s dotted and t’s crossed,’ all but the most careless public officials will be able to avoid criminal liability for exchanging official action for campaign contributions,” the government said.

In his appeal, Scrushy, 59, said there must be “no doubt that an explicit, not an inferred or implied promise, is essential to sustain a criminal conviction in a campaign contribution case.”

The Justice Department said an Atlanta-based federal appeals court correctly ruled that jury instructions at the 2006 trial, which said prosecutors had to prove that Siegelman agreed to take a specific action in exchange for Scrushy’s contributions, were all that was required.

Disguising Source

The government said evidence that Scrushy took steps to disguise the source of an initial $250,000 contribution -- making it appear to have come from a third party -- and the fact that Siegelman had an aide deposit the money in a secretly opened bank account, helped “corroborate the jury’s finding” that the men “acted with corrupt intent and knowledge that their conduct was illegal.”

The appeals marked repeat visits to the Supreme Court by Scrushy and Siegelman. In 2010, the justices told a lower court to reconsider their convictions in light of a high court decision in the case of former Enron Corp. Chief Executive Officer Jeffrey Skilling.

The high court, in Skilling’s case, put limits on prosecutions under a federal ban against fraudulent schemes designed to “deprive another of the intangible right to honest services.” Allegations of so-called honest-services fraud were among the charges against Scrushy and Siegelman.

Appeals Court

The 11th U.S. Circuit Court of Appeals threw out two counts against the men but sustained convictions on bribery and other charges.

Scrushy’s sentence was reduced to 70 months from 82 months in prison. The former HealthSouth executive, who was incarcerated in June 2007, is finishing his sentence in a Texas halfway house and is set for release in July.

Siegelman, originally sentenced to 88 months behind bars, was released on bail in March 2008 while he appealed his convictions. Siegelman hasn’t been resentenced after the appeals court reversed two of the counts against him.

The cases are Siegelman v. U.S., 11-955, and Scrushy v. U.S., 11-972.

To contact the reporter on this story: Bob Drummond in Washington at bdrummond@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net


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