Scrushy stays mum before Congress

/ Source: The Associated Press

Saying he was denied “a fair hearing” by Congress, ousted HealthSouth chief Richard Scrushy invoked his constitutional privilege Thursday and refused to answer lawmakers’ questions in their investigation of the $2.5 billion accounting scandal engulfing the major medical services company.

“On advice of council, Mr. Chairman, I invoke the Fifth Amendment,” Scrushy told a House hearing. Asked a series of questions by the panel’s chairman, he repeated his assertion of the privilege.

Earlier, Scrushy sat somberly in the front row as members of the House Energy and Commerce Committee’s investigative panel denounced his conduct and what they called a massive fraud at HealthSouth that nearly brought it down.

Before standing and raising his right hand to take the oath, at the order of chairman Rep. Jim Greenwood, R-Pa., Scrushy insisted on stating his position. He had not been able to get a fair hearing, he said, because he couldn’t face his accusers in the congressional hearing room.

Reading from a prepared statement, Scrushy said, “There is not and there has never been any financial collapse of HealthSouth.”

Greenwood challenged Scrushy’s complaint of unfair proceedings, noting that Scrushy did not face accusers in a recent television interview in which he proclaimed his innocence.

He called Scrushy “the last man standing” after a wave of admissions and guilty pleas by former HealthSouth officials.

Rep. Diana DeGette, D-Colo., a member of the panel, called Scrushy’s statement “self-serving.”

The flamboyant Scrushy faces a government civil suit accusing him and the company of fraud. In the network TV interview, he said he signed off on the fraudulent accounting figures because he trusted the five chief financial officers of the company he helped found in 1984.

Greenwood said he was deeply troubled that Scrushy granted a “no-holds-barred” interview while refusing to answer questions from Congress.

“Why is Mr. Scrushy unwilling to answer here today, under oath, some of the exact same questions asked of him by a reporter?” Greenwood demanded.

Fifteen former HealthSouth employees have reached plea deals with the Justice Department, including all five of the Birmingham, Ala.-based company’s former CFOs. Scrushy hasn’t been charged with any criminal wrongdoing; his lawyers have said they expect him to be indicted, however.

“You have to rely, you have to trust people,” Scrushy said during the interview Sunday on CBS’ “60 Minutes.” “I mean, you hire them. You pay them good salaries. You expect them to do the right thing.”

Since April, the committee has been investigating the accounting mess at HealthSouth Corp., which operates nearly 1,700 facilities for outpatient surgery, diagnostic and imaging and rehabilitation services in every state and abroad.

Other current and former HealthSouth officials also were called to testify.

Scrushy has fronted a country band that performed on television, flew some 150 friends and relatives to Jamaica for his third wedding in 1997 (Martha Stewart was on the guest list), and regularly hobnobbed with sports stars.

In May, a federal judge in Birmingham lifted a freeze requested by the Securities and Exchange Commission on Scrushy’s estimated $150 million in assets. The judge also halted the SEC’s civil case until the Justice Department completes its criminal investigation.

In the latest twist, Scrushy’s attorneys filed a formal complaint with Justice this week charging that the lead FBI agent in the HealthSouth investigation has a “special, personal relationship” with a government witness and may have broken the law by supplying sensitive confidential information to her.