Trial by Media (2020–…): Season 1, Episode 4 - King Richard - full transcript

HealthSouth CEO
Richard Scrushy was indicted on...

Scrushy built Birmingham-based
HealthSouth into a Fortune 500...

Richard Scrushy
was indicted on charges

he orchestrated one of the biggest
accounting frauds in US corporate history.

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?"

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.

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.

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.

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.

- Financial wonder boy...
- Richard Scrushy...

CEO of HealthSouth,
a Fortune 500 health care company.

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.

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.

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.

Ladies and gentlemen,
Richard Scrushy.

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.

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.

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.

He was certainly
a "local boy makes good" story.

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.

Scrushy captured
the American dream

and is helping others do the same.

Thank you, HealthSouth!

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.

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.

This was major.

One of the largest financial frauds

in the history
of the Department of Justice.

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.

And now
Scrushy could lose it all.

All told, Scrushy could be
looking at 650 years in prison.

Federal prosecutors
had major help building this case

from former top officers of HealthSouth.

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."

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.

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.

A lifestyle fueled by greed.

Homes, boats, jewels.

He was new money

in a way that would make Donald Trump
look like a pauper.

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.

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."

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.

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.

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.
- 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.

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.

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."

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.

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.

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.

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.

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.

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.

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."

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.

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.

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.

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.

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.

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,

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.

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.

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."

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.

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."

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.

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.

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.

This is ABC 33/40 News at 05:00.

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.

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.

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.

Are you confident
going in today?

Richard!

- Thank you so much.
- You're welcome.

- We're praying for y'all.
- Thank you.

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.

"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.

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.

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."

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.

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.

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.

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."

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.

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.

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.

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.

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.

"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.

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?

- 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.

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.

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."

She broke down.

I'm sorry.

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.

- Jim?
- Yes, sir.

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.

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.

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.

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.

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.

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.

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."

A lot has been made out
that Richard Scrushy, some think,

was doing an underhanded appeal
to the black community.

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.

I had never, ever seen
anything like this in any other trial.

He had successfully transformed himself
into a member of an oppressed community.

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.

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.

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.

Bill Owens described Scrushy
as a master salesman

who ruled HealthSouth with fear
and enough intimidation

to make others go along with the scam.

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.

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."

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.

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.

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.

Fifty-five days of testimony.

Complex, tedious, expert witnesses
from both sides.

How do you put it in a nutshell for 'em?

Talk fast.

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.

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.

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."

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.

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.

- So you're the government...
- We're the government.

But he's wrapped in the flag.

Securely.

How do you beat that?

Uh, we didn't.

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.

I turned to one of the lawyers,
and I went,

"Did we win?"

And he said, "We won, Jim."

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.

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...

- How do we get there?
- How do we get there?

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.

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."

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.

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.

In the end,

the thing that the prosecution
struggled with from the beginning

was to tell a story.

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.

Every loss is, uh, personal,
but the system is beautiful.

And it's one that I stand by,

win or lose.

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.

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.

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.

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.

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.

And they did.

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.

Richard Scrushy
was convicted of bribery

and was sentenced to seven years
in a federal prison.

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.

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."

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.

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.

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,

"Man, that rat poster was great,"
or... or something. That's what I want.

Did your grandma really say that
about the pancake?

Uh, no.

I made that up years ago.

She could have,

but she didn't.