Political Hay

Old School Bribery in the Old South

The culture of corruption, Alabama style.

By 7.13.06

Give the jurors in Montgomery, Alabama, credit for endurance. This wasn't an FBI sting or about cash in the freezer. Instead, there were piles of documents to support 65 total indictments for bribery, conspiracy, mail and wire fraud and obstruction of justice against four defendants.

They braved 32 days of testimony and 11 days of deliberation before convicting former Alabama Democratic governor Don Siegelman June 29 on seven of 32 counts of bribery, conspiracy, and obstruction of justice for taking $500,000 in campaign donations from former HealthSouth CEO Richard Scrushy in return for appointing him to Alabama's Certificate of Need board.

The board makes decisions about hospital expansion and equipment needs. Unsurprisingly, when Scrushy was on the board, decisions often favored expansion and more expensive equipment at HealthSouth hospitals. Jurors also convicted Scrushy on all seven counts in his indictment for making the contribution to win the appointment and then hiding it. The current Mrs. Scrushy, his third wife, expressed disbelief that Scrushy was convicted in this case.

Siegleman's conviction would seem to be the end of his political career. Some, however, already thought his career was over when his comeback attempt was crushed in the June Democrat primary by Lieutenant Governor Lucy Baxley. Baxley won 59.8 percent of the vote to 36.4 percent for Siegelman. Four lesser candidates were also in the race.

Ironically, the verdict against Scrushy came one year and one day after he was acquitted on 36 counts that alleged he intentionally inflated HealthSouth revenue to prop up sagging stock earnings and sold his shares based on inside information that HealthSouth would be investigated for Medicaid fraud. When the Medicaid investigation became public knowledge, HealthSouth share prices plummeted. HealthSouth employees lost most of the value of their 401(k) accounts. Other small investors lost thousands of dollars.

A former Siegelman chief of staff and a former state highway director were acquitted on all charges. They had been charged with steering state projects to Siegelman donors and friends. The paper trail was less damning than the connection between Siegelman and Scrushy. It also did not hurt the former state highway director that his attorney was former Alabama Attorney General Bill Baxley, lieutenant governor Lucy Baxley's former second husband.

The U.S. Attorney for Alabama's Southern District is Laura Canary, wife of Bill Canary who is chief of staff to current Republican governor Bob Riley. Laura Canary recused herself to avoid even the appearance of conflict of interest, turning prosecution over to her deputy.

It is no wonder many Alabamians consider state government to be corrupt. When surveyed by the Center for Governmental Services at Auburn University, 83 percent said assuring the honesty and integrity of state officials was a high priority.

What about the 17 percent who thought it was not important? Where they real or hopeful beneficiaries of corruption?

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About the Author

Mark G. Michaelsen writes frequently about public affairs.