Sunday, July 10, 2005
© Copyright 2014
Gwinnett Daily Post
Don't let Scrushy
be slippery slope
The (Baltimore) Sun:
The Federal government's fraud and money-laundering case against Richard M. Scrushy, founder and former CEO of the HealthSouth Corp., appeared solid, if not airtight. ... And yet, astonishingly, he was acquitted on all charges.
That outcome is significant because Mr. Scrushy's prosecution was the first major case brought under the Sarbanes-Oxley law's requirement that CEOs sign off on the accuracy of their companies' accountings - and thus should no longer be able to claim ignorance of fraud. But in this case, the new corporate accounting law was no match for that old-time religion - Mr. Scrushy's lavish and successful efforts to cultivate support from local churches in his hometown of Birmingham, Ala., where prosecutors made the highly questionable decision to try him.
White-collar crime cases are often complex, sometimes too complex for jurors to absorb or find believable. But this case was made much more difficult because prosecutors made the mistake of giving Scrushy the home-field advantage by not switching venue from Birmingham or even from the South as a whole. It thus should be considered an anomaly and not deter the federal government from pursuing other prosecutions under Sarbanes-Oxley: CEOs who preside over fraud must be held accountable.