Tuesday, May 10, 2011

Bad day for Siegelman; partial win for Scrushy

      Am working on a blog/column about today's ruling by the 11th Circuit Court of Appeals on the appeal by Scrushy and Siegelman, and hope to have it done by tonight. For now, here's the short version:
        The bottom line is that today was a very bad day for Siegelman and an awful day for Milton McGregor and Alabama's other"bingo" defendants. 
      Siegelman came into the day with five previously upheld felony charges, and he'll end the day with the same five charges. 

     However, it brought some limited good news for Scrushy and, most importantly, was a great day for people of both political parties who believe that  bribery statutes should apply to campaign contributions.
     To put it another way: It was a bad day for people who think public officials should be able to freely and for all practical purposes openly trade public acts for campaign money. It was a great day for people -- not just in Alabama, but throughout the country -- who want there to be at least some restrictions in the wild world of political giving.
      In March 2009, when the 11th Circuit first considered the appeal, it tossed two of what was then seven counts against Siegelman and upheld all the six counts against Scrushy. 
         Today's ruling comes ten months after the U.S. Supreme Court ordered the 11th Circuit to reconsider its March 2009 ruling (for the reasons explained in a column below.) With today's ruling, the 11th Circuit eliminated two of the six charges against Scrushy. It briefly noted the two counts thrown out against Siegelman.
    Those were one and the same as the two counts the court tossed in 2009. There was no way the 11th Circuit was going to re-instate the two counts. That wasn't on the table. On Tuesday, the court upheld the five counts it upheld back in 2009, and for the same reasons given then.

       I will argue in the blog I'm going to start on later that far more than the fates of Siegelman and Scrushy rested on this ruling. Had the court ruled otherwise, it would have essentially legalized quid pro quo arrangements/bribery where campaign contributions are involved.
       I may also address how the NY Times handles coverage of the ruling. The paper actually sent a reporter to the oral arguments before the 11th Circuit. It will be interesting to see if the Times A) uses a wire story or has one of its reporters write the story; and B) if  its own story, if the reporter addresses in any detail the aspects of the Siegelman case that make it so different from the way it's been characterized in so many Times news stories, editorials, and op-eds.
       Here's that thing I wrote on the appeal last July, after the Supreme Court sent it back to the 11th Circuit for reconsideration.

 "What does the Supreme Court's ruling ultimately
 mean for Siegelman and Richard Scrushy?"

        ​It is reasonable to suppose that former Alabama Gov. Don Siegelman sweated out the months of May and June, and not because of the heat.
       ​The U.S. Supreme Court, which has been sitting on his case since he appealed to it last August, had until July 5 — the final day of its 2010 term — to rule on that appeal.
       ​The country’s highest court had two basic choices: It could uphold Siegelman’s conviction and assure his sooner-than-later return to prison; or take one of several possible measures, each of which would prolong that return and possibly keep him free for good.
      On Tuesday, the Supreme Court chose one of the latter options. It didn’t agree to hear Siegelman’s appeal, which would have been his best-case scenario. Rather, the court issued a brief order directing the Atlanta-based 11th Circuit Court of Appeals to reconsider its March 2009 decision upholding Siegelman’s conviction (for reasons shortly to be explained.)
      ​Siegelman and his lawyers hailed it as a great victory. Considering the alternative — a fast-track back to prison — Siegelman had every right to be elated. But even he conceded that he’d won a battle, not the war.
​So what, ultimately, does Tuesday’s ruling mean for Siegelman and his co-defendant, former HealthSouth Corp., chairman Richard Scrushy?

      ​Pardon if this gets complicated. This is a complicated case with a complicated past and it’s not getting any simpler. I can’t claim to understand it all, but hopefully I can provide some clarity and explain why I believe — am in fact pretty certain — that last week’s decision merely delays the inevitable.
      ​In other words, that Siegelman will return to prison.
      ​First, a brief recap of some key events in the case.
     ​In October 2005, a federal grand jury in Montgomery indicted Siegelman on 32 criminal charges, some of which involved Scrushy, who was also indicted. The following June, a jury found Siegelman guilty of seven of the charges — six of the Scrushy charges and an unrelated obstruction of justice charge. On that one, he was accused of using a series of sham check transactions to cover up a $9,200 payment to him from Lanny Young, the landfill developer, serial briber and secret owner of the fabulously corrupt company, G.H. “Goat Hill” Construction.

     ​In June 2007, federal judge Mark Fuller sentenced both Siegelman and Scrushy to about seven years. They were ordered directly to prison, in my opinion, because of Fuller’s anger at bogus attacks by the defendants and their attorneys on the jurors following the verdict.
     ​In March 2008, a 3-judge panel of the 11th Circuit ordered Siegelman freed based on its finding that he had a reasonable chance of success on appeal. Scrushy, though, had to remain at a federal prison in Texas. Months before sentencing, he had taken an unauthorized trip in Florida on his yacht, found to have lied about his whereabouts, and was deemed a flight risk. Thus, he was denied an appeal bond.
     ​A year later, in March 2009, another 3-judge panel of the 11th Circuit ruled on Siegelman’s (and Scrushy’s) appeal. That detailed 68-page order is, in my opinion, the obstacle that Siegelman cannot overcome. The 11th Circuit dismissed two of the Scrushy-related charges against Siegelman (rightly so, I believe), but delivered a strongly-worded, legally air-tight defense of the remaining five charges.
    ​As expected, Siegelman and Scrushy appealed to the Supreme Court, but the law of averages was not on their side. Each year the court receives about 7,000 appeals. Of those, it considers about 100.
    ​It was Siegelman’s great good fortune that during its 2010 session, the Supreme Court decided to tackle the constitutionality of criminal cases involving the “honest services” statute, which indeed is vague in many cases. Two of the remaining charges against Siegelman involved that law, and four of the six against Scrushy cite the statute.
    ​Two weeks ago, the court ruled on one of those honest services cases — an appeal by former Enron executive Jeffrey Skilling. The ruling promises to limit the ability of prosecutors to use the honest services law, especially in cases against corporate officials. However, the court found that prosecutors may continue to apply the “honest services” statute in cases involving bribery and kickbacks.
    ​And that’s the rub for Siegelman. The two “honest services” charges against him involve bribery, and again, the “honest services” statute isn’t part of the other three charges. And unlike Skilling, he’s a public official, legally, a different beast altogether than a corporate officer.
    ​The Siegelman jury, like the 11th Circuit, considered evidence regarding a host of bizarre transactions, the totality of which undermines the characterization by Siegelman and the likes of the New York Times that he was convicted for accepting a mere donation and then appointing Scrushy to a state board.
     ​One of the two $250,000 checks came from a near bankrupt Maryland healthcare company by way of the New York investment banking arm of the Swiss bank, UBS. Neither of the “donations” were reported to the secretary of state or IRS until more than two years later, after a series of stories in the Mobile Press-Register exposed the payments and led to their forced disclosure. Also, Siegelman was personally liable for a $700,000-plus loan the money allowed him to repay.
     ​(As I argue in my book, some of Siegelman’s worst acts — including the sale of his home through a straw man for twice its value and his acceptance of about $1.4 million in legal fees while governor — were worse than many of the crimes for which he was charged.)
      ​After the “Skilling” ruling, even some web-sites known to be fervently pro-Siegelman expressed disappointment that it wouldn’t help their man because of the bribery exception to the Supreme Court’s whittling down of the honest services statute.
      ​Now, per last week’s order, the ball is back in the 11th Circuit’s court. It could act quickly — which for an appeals court, means a month or two — and issue a ruling stating that the “Skilling” limitations on honest services cases don’t apply to Siegelman’s case.
     ​Or, the 11th Circuit could play it cautious and order the parties — Siegelman, Scrushy, the federal prosecutors — to file briefs, perhaps even hold oral arguments, on the relevance of “Skilling” to Siegelman’s case. If that happens, Siegelman, regardless of the outcome, will probably be guaranteed a year or more of freedom.
     ​It doesn’t end there. Because the 11th Circuit tossed two of the charges against Siegelman, he must be resentenced once all of the above is resolved.
    ​In no small part because of Siegelman’s behavior — accusing jurors, prosecutors, the judge, even Karl Rove of all manner of imaginary hijinks — I think he’ll be lucky to get a year shaved off his seven-year sentence.
     ​If that scenario pans out then Siegelman — now 64 — will in the next six to 18 months return to prison for about five more years.
     ​When it’s all said and done, Scrushy may be glad he took that yacht trip in Florida. Because of that unauthorized venture, he will have served his time, or much of it, and get out of prison in 2013.
​Meanwhile, his co-defendant — Alabama’s 51st governor — will spend a considerable block of his golden years housed in a federal prison.


  1. Can you really blame the NYT for having trouble covering this story? Goodness, until they realized what they had on their hands and flushed him, they were using Glynn Wilson as a stringer on this story (for at least one of the trials IIRC). Heck that's a good story in itself. Who was in charge of vetting stringers and copy when the NYT hired (however briefly) "Alabama's most credentialed journalist?"


    BTW ole GW covers this story with the lede "A federal appeals court panel threw out two more counts in the bribery conviction of former Alabama Governor Don Siegelman and HealthSouth founder Richard Scrushy on Tuesday..." Is it "two more" or the same two as from 2009 as per your analysis? I'm betting on you.

  2. Getting something more accurate than Glyn Wilson is not exactly a career achievement, but if you bet on me with this one, you would have one. Will say this..compared to, "The Legal Schnauzer," Glyn Wilson is an ace reporter.

  3. in a hurry, a doofus spelled won as one