The sentencing hearing for former HealthSouth CEO Richard Scrushy and former Governor Don Siegelman is scheduled to begin this morning around 9 a.m. REMINDER to those who may not be familiar with how the Chronicles operate - this will be live. There will be typos. It is not a complete transcript, but every effort is made to get as much info to you as possible. You will have to refresh your browser to see the updates. See everyone around 9 a.m.
Things are beginning to shape up in the courtroom as most of the attorneys are now present. I joked with Ethics Commissioner Jim Sumner that he was following me - Sumner addressed the two-year college president's association yesterday, clearly outlining the ethics law and took some tough questions from the audience. Sumner has been subpoenaed by the government.
Judge Fuller is on the bench and he says the attorneys know what he expects. Start with objections to pre-sentence report. Variances. Then statements in mitigation related to a reasonable sentence.
He has asked Siegelman to stand. He asks if they have seen the pre-sentence report. "I am aware there are several unresolved objections."
We have sound problems. I have gotten with the marshals who have gotten with the judge and people are working on it to try and get the sound issue handled.
Susan James is at the mic. She wants to deal with the amount of loss last.
Fuller: How am I going to reach a recommended guideline sentence. I can't take up variance until I determine what the guideline sentence is to begin with.
Susan James says the amount of objections that we have is going to have several hours of objections.
Fuller: I don't know why you can't argue what...a witness will testify to.
James: The government will take as much or more time as we would on the things we have objections to. Mr. Perrine is talking and of course we can't hear.
Fuller: For the record I also have my trial notes here. If you want I can call upon my notes.
James is talking from what we can hear about the quid pro quo issue. She is arguing for lowering of sentence amount for acceptance of responsibility.
Susan James is addressing the issue of the acquited conducte. "We strongly object to the inclusion of any acquitted conduct in this case."
Fuller is asking for case law related to a preponderance of the evidence and the use of acquitted conduct.
James says Siegelman might as well not be there if the government is going to get everything they want.
"We say without succeed we should have no more than a 14-level increase for the Scrushy conduct and the motorcycle...Miss Caple says we should have 18 level increase based on acquitted conduct...All of these enhancements are on the use of acquitted conduct and relevant conduct. To sentence obstruction you have to use relevant conduct."
Fuller is discussing the grouping of obstruction of justice and the guidelines.
James - "That doesn't make it any more palatable to us. "
Let's don't be presumptive says Fuller.
James says the use of acquitted conduct is a violation of Siegelman's 6th amendment rights.
"I do have an argument with why the court shouldn't group this. It may be a short argument. If the court will note I came up with a different guideline assessment and procedure than the probation officer. Depending on whether or not the court is prepared to address this now...the probation officer's entire theory....is based on "each of the counts of conviction results in one composite harm." Our position is these are separate harms. "The court need look no further than the indictment. We have RICO...at least some of the racketeering acts do mirror the charges....of which they were convicted..."
"The court can't reject the jury finding the defendant not guilty...on those charges...the government has spoken to the fact that they are separate...The government chose to indict that way and they have to live with it...The Scrushy conduct will fall under the bribery category...but there is no bribery related to any of the other conduct...at the most that was gratuity conduct."
"As I understand the evidence there was no specific quid pro quo type conduct related to Young, etc."
Fuller notes "As late as April this year in the 11th circuit it says if the court finds it was covered by a preponderance of the evidence."
James says the government's proof does not rise to the preponderance of the evidence.
Judge Fuller says he does not want all the attorneys from each side talking on one issue.
Proffessor Blakey is now talking about relevant conduct but we can not hear him. He is arguing relevant conduct does not fall under the guidelines and he is addressing some issue related to the sentencing commission.
"One on the 11th Circuit...2004, that of course is binding on this court...There are two distict court decisions that are of course not binding..." One of the district cases is in Florida in 2007.
"We must consider whether there are distinctive similarities...rather than isolated events..."
"If we take a look at the other conduct...we can see there are other people involved...Mr. Young is not involved with Mr. Scrushy...the other offenses at best are qratuities...there are different objectives..."
"If we look at the units of government we have the CON Board on one hand, counties etc. on the other...There were separate times and places...The government says they were different...They indicted that way...normally what relevant conduct means...is not a series of conduct going back years...When the commission had to sit down and take a look at Title 18 it's mind boggling what Congress is doing...What the commission basically did...doesn't quite shoehorn in..."
We still can't hear well. Blakey is talking about multiple objectives and RICO and diverse objectives.
"There's a disjoint between RICO and the guidelines...for offenses to be joined they must be the same or similar...Contrast over to RICO, what joins to RICO is substantive elements...Racketeering acts can be joined to each other if they are in the affairs of an enterprise...."
Mr. Perrine jumps in but we can not hear him.
Blakely Becuase he can not see it does not mean it's not there.
Fuller is calling Blakey on the carpet for his remarks and tells him to move on.
Blakely "There are two reasons this is appropriate - This prevents prosecutors from putting as much in the can as they can..." Blakey talks about the counts against Mack Roberts as being weak on evidence...What they hope to do is overcharge under RICO...I'm not objecting to acquitted conduct...I'm not objecting to related conduct...but this activity is not related to the underlying offense...I'm specifically talking about Goat Hill, the race track, the revenue ruling, the bond issue...basically everything that Lanny Young talked about except the motorcycle..."
Blakey says "Nothing that Bailey said is relevant conduct...except for testimony (related to Scrushy...)
"To the degree that the court brings in more and more relevant conduct...the more this becomes not about what the jury said...but what the court says...The court ought to tread lightly..."
Susan James is back up. "I would note specifically as to role enhancement and the bribe...When the governor asked for the contribution...he was not aware of what Mr. Scrushy would do on the CON Board..."
Fuller - In your argument about role enhancement is that about anything related to the position of trust. James says no.
Fuller - What is your objection for her calculations. I'm not going to cut you off.
James - Ms. Caple also did not state there was more than one bribe. While these two are not objections, when the fine and restitttion...it is my reading that Ms. Caple did not make a recommendation...
Fuller - Ms. Caple has recommended a fine in this case of $150,000.
James - I apoligize judge. We think there should be no fine in this case...The government did not prove the governor benefitted one penny. She says, "Don Siegelman is reported to have gained benefit or stood to have gained benefit...While he was listed as guarntor...Siegelman never received any monoey...The fine issue overlaps with the fraud/loss issue. I respect the confidentiality of the presentence report...about governor's finances..Suffice it to say we would be glad to share with the court some of the changes in that status....the trial has diminished the ability of the governor to earn income...The court can only imagine that the legal fees in this case have continued to mount...In camera we can discuss this more specifically if the court should choose...We believe Miller has to come from Mobile..."
Judge Fuller says there will be a break before lunch.
James says "We have specific objections as to the amount of loss...The government suggest there are others...It would be my plan to address just the one Ms. Caple has suggested...There may be a few monetary amounts that weren't included in the original report...The way I've broken this down is she is suggesting that Gov. Siegelman be held accountable for a $500,000 contribution from Mr. Scrushy and a $9200 motorcycle, also $3 million landfill fee...When the first suggestion came out related to the revenue ruling it was $1 million, that number has increased to $4.2....We are confused how that was arrived at...Additionally they suggest the Governor should be held accountable for a $50,000 donation from Waste Management to Lottery Foundation...There is a suggestion he be held accountable for a $25,000 Mr. Hamrick was alleged to have gotten for a BMW..."
James: "As it relates to the $3 million that is suggested to be attributable to Gov. Siegelman and the landfill in Cherokee County..."
Fuller I'm not going to cut you off. Unless there is some testimony...I don't want us to waste a lot of time..."
James - In regard to revenue on the landfill sales...The govenment keeps saying they want to rely on the record..Other than Lanny Young getting $3 million there is no breakdown....How much of that went to partners...How much of that was related to the bribery of Judge Jordan the probate judge...Judge Jordan in substance says he couldn't vote...There is no question that Lanny Young bribed him for something he didn't need...His testimony makes clear and the record is missing support for this...Governor Siegelman had no impact...some reference that he made some phone call at night...I would submit that in and of itself is not sufficient to atribute $3 million sales ...The government should be required to prevent proof..."
"There was no suggestion that the contribution to the Alabama Lottery Foundation that it had anything related to the revenue ruling (the contribution from Waste Management)"
What Gov. Siegelman didn't know was that Lanny Young and Nick Bailey were in cahoots to steal money from the state of Alabama" (This relates to GH Construction warehouses)
She quotes something assistant U.S. Attorney Feaga said to the press.
Judge Fuller says he expects to ask the government about that.
James goes on to talk about the car purchase and says "it was not known by Gov. Siegelman...Those were matters that were not discussed with Gov. Siegelman...He has no knowledge...We don't believe those are attributable..."
"The Tim Adams $11,000...involve allegeations of Mr. Scrushy's conduct on the CON Board...It would certainly have not been forseeable that Mr. Scrushy would be conducting any illegal conduct...To the contrary his thinking would have been Mr. Scrushy had served honorably under three governors."
Mr. Kilborn is up to argue about the landfill - "There is no proof there was a benefit...Let's say I was trying to get damages from the state of Alabama saying Chemical Waste Management got advantages..Your honor would require...testimony, there would be motions, there would be considerations of attempting to intervene factors...the burden of proof is on the government...The fact of the matter is the trend in the waste management business was down...I have an exhibit...A national analysis for 1999...on the waste business...Kilborn reads from the report...The trend was to go down...Ms. Caple put the $1 million figure on it...We think that should be dropped...The tonnage...Your honor will notice in 1998 there were 8 months in which there were 10,000 or more tones...After 1998 the tonnage coming into Emelle was down...Mr. Harrington in his grand jury testimony...says basically the waste business had dried up by the year 2000...Until the government comes forward...."
Jim Hayes and Jack Miller are witnessess to be called regarding to objections for Siegelman.
The government responds. Mr. Perrine.
"They should be grouped together. The U.S. agreed with probation...they should be grouped together...You have the same victim....The citizens of Alabama...This man abused his position of trust....from the time he was elected governor to the time he was no longer governor...He was involved in pay to play agreement...The same victim, the citizens of Alabama...The same criminal objective...greed, avarice and power....to line his pockets with things of value..."
"Counts 3, 5, 6-9 are all to be sentenced (under the same guideline) the benefit received goes to Defendant Siegelman's criminal conduct...The corruption offenses Don Siegelman...Nick Bailey testified that that transaction Nov 16, 2001 if they would have been....Without Nick Bailey's testimony there would have been no conviction...Nick Bailey is the link...You have the governor engaged in corrupt activity...."
Fuller "This is related to the obstruction of justice account..."
Perrine - If you don't grant the enhancement...he's getting off lightly for criminal conduct...
Fuller - We can go forward ...to try to calculate the guideline...
Perrine - You have to add the two points for obstruciton of justice. The U.S. position agrees with probation...It is the law of the land that relevant conduct, acquitted conduct can be used...It's a law in this district that is applied every day. with defendants..particularly in drug cases...routinely sentenced to 20,30, 40 years in prison. Now these two rich, white defendants..."
Fuller - Let's keep race out of this...just for the record "caucasian"
Perrine - Lanny Young and Nick Bailey testified to the illegal agreement. The jury believed Lanny Young or they wouldn't have convicted...Don Siegelman is the one that got the revenue ruling changes...Siegelman is calling Mathews requesting a contributions..."
Fuller - I have not seen anything related to a transcript on this.
Perrine says it's in grand jury testimony. Kilborn has an objection, he wants the entire transcript. "He would not have given the $50,000 without the tax break...Now, Cherokee County the $3 million that Lanny Young received was for two things - change in service area and reduction in fee...Lanny Young will be prepared to testify today...Testified Don Siegelman made phone calls...for the sole purpose "Lanny Young...help him if you can...Other examples of relevant conduct...It was strictly a means...Siegelman to line his own pockets...Lanny Young testified he gave him $400,000...airplane rides, cash...as part of this pay for play arrangement...All these things were testified to ...Count 17...The underlying offense they're trying to cover up is Don Siegelman's criminal activity....The relevant conduct criteria is satisfied...The jury was instructed...conspiracy charged in count five not only did Scrushy bribe Siegelman...shortly after he was appointed...Margie Sellers testified to this ...the sole reason Don Siegelman told her (to make Scrushy vice chair)....Scrushy exercised influence over the CON Board...All that is conduct that Siegelman participated in and that was forseeable to him....Professor Blakey mentioned proximity...CON Board ran from Jan 1999 to Jan 2000, the same time Siegelman was involved in this pay for play scheme...same criminal conduct...Professor Blakey and Ms. James are trying to create a smoke screen, claiming 94% of counts...The jury did find Siegelman guilty of two predicate acts...Again the words were not guilty not innocent..."
Perrine - "The testimony showed the $500,000 bribe...the $250,000 check from IHS...Came about from Richard Scrushy putting pressure...
Fuller - "I;ve heard all of this."
Perrine - "That's money $265,000 that should be paid back to UBS...I believe they corrected that a minute ago to a charity...The HealthSouth check....
Fuller - how did HealthSouth Benefit? How can that be ordered as restitution if HealthSouth got exactly what they were asking for...Strictly in terms of restiution wouldn't that be double benefit....and then turn around and requre that Gov. Siegelman or Mr. Scrushy be required to pay them back
Perrine - "Same argument with regard to Tim Adams...The state of Alabama...realized a $4.2 million loss from the MOU...You admitted that testimony...as a benefit to Waste Management...Exactly the amount Waste Management benefitted...Loretta Nelson was the witness...We'd also say that $4.2 milllion was money the state of Alabama lost and the state should be paid back...Also, the money that was paid to ADECA to Lanny Young...is money that should be paid back to the state....Defendant Siegelman....
Fuller - I have a joint statement as to restitution as it applies to the Goat Hill project $181,325...In good conscience how can I order Gov. Siegelman to pay back more as a loss to the state of Alabama...
Perrine - "That was part of a negotiated settlement...He pled guilty...That was part of the negotited plea agreement....Mr. Siegelman has not pled guilty...He say she has done nothing wrong...so there is a huge difference..Every thing was part of the pay for play agreement..."
"With respect to resitution, the other victime is Brookwood Hospital...Victim of criminal conduct betwen Gov. Siegelman and Mr. Scrushy...HealthSouth wanted to be able to have influence over the CON Board, Brookwood has been a competitor...Margie Sellers, the night before a CON Board meeting...Scrushy called Margie Sellers to look askew...Brookwood's application was before the CON Board...Regardless if it was unanimous or not...in that case the defendant bribed a member of the board for influencing the members of the board....he expected members that he bribed to provide benefit...The only reason that Richard Scrushy contacted Margie Sellers...at the same time other hospitals...we have a witness ready to testify today...this witness will call because of Brookwood's denial they couldn't provide services...it was a loss amount that should be consider...We have been able to develop through Brookwood, the total amount of loss is $171,xxx plus $32,
Fuller $204,000 plus
Perrine - Yes, your honor
"We have a letter...about the amount...a firm spent on the appeal of Brookwood being denied..."
Fuller - I will take it under advisement.
Carmen Hernandez wants this information struck.
Fuller - I'll take it under advisement.
Perrine - But the final after two or three years of litigation...They finally got the machine...Other hospitals got machines without going through this....It was conduct charged....That completes the list of victims the U.S. has identified.
Fuller - Any other response as to Gov. Siegelman
Perrine - Only to the extent..We also object to the final figure...on the PSR Report..."
Fuller - We'll take up your objections separately.
Perrine - We not satisfied...There is a difference
Fuller - That was one of the points raised...The amount of loss...
Perrine - "We would start with the conduct involving Defendant Siegelman...You need to account for the total benefit received...That amount determines how far to go up the table - The probation office has categorically stated the greatest of those categories...DeBegger case...A couple of points the 11th Circuit makes...You need not make precise calculations...that qualifies...Second the benefit received does not have to be to the defendant...the government relied on the profit to that firm to calculate the guidelines (in referenced case)...(Another case)...The court used a tax benefit to a third party...
Fuller - Not the bribe
Perrine - This is cited
Fuller - With that, what is the total amount?
Perrine - $11, 895,549 broken down the greatest benefit received Scrushy and Siegelman is the benefit from construction of the Phenix City Hospital.
Kilborn - Objects. This is totally bogus.
Fuller - It's the government's position, if in fact it was resources of HealthSouth that were used to bribe Mr. Siegelman to put Mr. Scrushy on the CON Board and through the influence Mr.Scrushy had on the CON Board Phenix City was able to get a hospital...
Perrine - The testimony from Loree Skelton
Fuller - Is there any evidence that anyone else on that CON Board knew
Perrine - Defendant Scrushy is not going to tell other members
Fuller - If the influence is over one member of the board
Perrine - If you don't get Tim Adams back you don't have a vote
Fulller - If the CON Board didn't agree all ...tht would happen is the board would vote to deny...
Perrine - HealthSouth knew that hospital was going to be profitable...Loree Skelton knew there was not going to be a quorum...She called Tim Adams...They convicted these men on it...
Fuller - You're saying that was forseeable....
Perrine - It's a $500,000 bribe...The jury found
Fuller - Slow down if you want it on the record
Perrine - !2 members ...this is charged offense conduct...the overt acts include the payments to Tim Adams...
Kilborn - I want to cross-examine...It shows...that HealthSouth was still in the hole...The financial statements show that project was on a downward trend...In fact it was a loss...
Fuller - If you wish to proffer, to call this witness I'm not inclined to apply this amount to Gov. Siegelman.
Leach - One of the points the court needs to be aware of...more importantly it takes a huge investment to build these type of facilities...The contract adjustment needs to be explored...throughout that period of time...shows that that hospital....
Fuller - If I am not inclined to consider it why do I need ...
Leach - I just want to get on the track. You just said Siegelman
Fuller - We're only on Siegelman..."It is too far removed for this court to account it to Mr. Siegelman or Mr. Scrushy or the cost to Brookwood Hospital...I just don't want to spend all afternoon here which is only going to be for the benefit of preserving the record when you can proffer it..."
Perrine - Waste Management benefitted $4.2 million...your honor admitted that testimony under the theory that was a benefit to Waste Management....Another benefit Lanny Young testified $400,000 in campaign contributions, cashe, 4-wheeler....
Fuller - You disagree with amount Ms. Caple set out - $106,000
Perrine - The things of value in Lanny Young's testimony was a lot greater than $106,000. Nick Bailey received over $60,000...Paul Hamrick received at least $50,000 in benefits...Lanny Young benefited at leatst $50,000 from being involved with Claire Austin - Siegelman got Austin/Young clients....Lanny Young testified...that he received $35,000 from Bill Blount....Blount had to contact Paul Hamrick....Bill Blount contacted Lanny Young...phone conversations where they talk about Hamrick ....and getting Bill Blount moved up....That was all part of the pay for play scheme...
The $500,000 in regard to the revenue ruling....Waste Management benefitted $4.2 million.
The United States calls Andy Price. ( I believe he is an accountant)
He is senior VP of accounting at HealthSouth. Mr. Feaga is questioning. HealthSouth has a partner in the hospital. P:rice: We splt the profits 50/50 Feaga Did you prepare that exhibit? Price: Yes Feaga: Is your employment to do this sort of thing? Price : This is one of my duties. Feaga: Price: the net 3,109,054 Feaga: This is HealthSouth's half of the profit Price: Yes
The court is not persuaded although there has been finding of guilt that Mr. Scrushy .....
The court also finds that Mr. Scrushy paid the expenses of Tim Adams and quite possibly influenced Tim Adams to vote....
The court is not persuaded that any other memver of the CON Board knew about or was influenced in any way by the illegeal conduct....Scrushy, Siegelman,
and Tim Adams.
Therefore unless it is shown that other inappropriate conduct or influence caused the other members....who voted for....I am not persuaded
that should be used in the amount of restitution or loss attributable to Mr. Siegelman or Mr. Scrushy
The blog is currently down. We will recap later. There are still issues with the sound we are hoping gets corrected before tomorrowl
no sissy he, s not getting shafted he should be getting hung he,s a crook, he is the one who doing the shafting open your eyes lady & listen the jury found him guilty.
Posted by: grover | June 27, 2007 at 03:44 PM
don and scrushy both keep putting the kids out frount of this , i say they should though of this before they broke law. put them in jail now, that where i,d be if it were me.one more thing i hope both families have learn to live the hard way just as most of us do.
Posted by: grover | June 27, 2007 at 03:28 PM
the trial is over send them to jail & stop wasting tax money,[my money]. if you dont put them in jail where they belong its just another black eye for the state.
Posted by: grover | June 27, 2007 at 03:17 PM
Who are you people to judge and make statements like this? No matter what happens God is in control here! You cant judge someone for something you have no clue rather they did it or not! You need to look at yourself in the mirror and pray for your own mistakes. God Bless you all! I pray Jesus Christ will soften all of the hearts who post judgement on others such as you who make your comments and all you do is listen to the media.
Posted by: tye norton | June 27, 2007 at 09:40 AM
Scrushy keeps saying those children don't deserve not having a Dad and his being imprisioned, well those stockholders children didn't deserve him taking their parents investments and stocks. Send both to prison for the MAX. Hopefully, Judge Fuller will do the right thing.
Posted by: Alice Williford | June 26, 2007 at 06:28 PM
Keep your eyes on the prosecutors. They are lusting after a big settlement, primarily because it looks good on their resume, not because it is 'just'.
Posted by: Humphrey Glocko | June 26, 2007 at 05:13 PM
So the end justifies the means...that is why our country is coming apart at the seams. We have taken the Bible out of the school and outlawed prayer and expect people to achieve a greater state of goodness based on nothing.
Posted by: Bill G. | June 26, 2007 at 04:52 PM
I agree with Sissy.
Posted by: Summer | June 26, 2007 at 03:47 PM
If folks are satisified that the people they elect can steal from them without consequences, then we deserve what we get.
Long ago, in a galaxy far away, there were officials who served the people, not themselves. Or, did I just dream it?
Posted by: A.W.Redd | June 26, 2007 at 03:30 PM
While all politicians may be dishonest, they were not convicted in a court of law, as were these two. They are both guilty, they have been walking around free for a year since their trial and it is now time to pay the piper. PUT THEM AWAY!!
Posted by: M.S. Parks | June 26, 2007 at 03:05 PM
Oh, come on, people. Wah.So what if Siegelman was dishonest? Look at the bigger picture. Didn't he improve Alabama's bottom line with job creation(think:Huyandi and Honda. Siegelman did the groundwork. Riley enjoyed the fruitsd of Don's labor).Being a 'dishonest' governor is not a criminal offense.
You show me 1 politician that honest and I'll show you one who never ran for elected office in the U.S.A.
Posted by: A.C. Payne | June 26, 2007 at 03:01 PM
It's called politics people. Don is getting shafted big time by some big time people who wanted him out of the running for gov.
Posted by: Sissy Wilson | June 26, 2007 at 02:54 PM
I believe that they both are guilty and have cheated the alabama people. The governor used his position to better himself.
Posted by: Delmar Morton | June 26, 2007 at 02:17 PM
In my heart I believe Mr.
Seigleman. I don't believe
him guilty.
Posted by: Ruth Hester | June 26, 2007 at 12:45 PM