Crooked Birmingham CEO becomes Televangelist

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Former HealthSouth CEO Scrushy turns televangelist

When Martha Stewart (news - web sites) was indicted, she turned to Barbara Walters for a sympathetic broadcast interview. When Ken Lay was indicted, he turned to Larry King.

But former HealthSouth (HLSH) CEO Richard Scrushy, whose trial on charges stemming from a $2.7 billion accounting fraud is scheduled to begin in January, is reaching out to a higher power: Jesus.

Since March, Scrushy and his wife, Leslie, have been hosting a half-hour talk show every weekday morning on a local independent TV station here. Although Viewpoint occasionally tackles subjects such as media bias and self-improvement, Scrushy's bread-and-butter topic is the Bible and the importance of following the word of God. To that end, Scrushy books a steady stream of local ministers and pastors as guests.

Scrushy, 52, used to attend church services in Vestavia Hills, the affluent suburb where he lives. But last year, around the time of his indictment, he began attending the Guiding Light Church, a ministry across town that caters primarily to African-Americans.

Early this year, Guiding Light purchased 12 months' worth of airtime for the show. Scott Campbell, general manager of WTTO Channel 21, would not disclose how much Scrushy's church paid, but he says about 5,000 Birmingham households tune in each morning. "This is a paid program, just like the Ginsu knife commercials," Campbell says.

Critics of Scrushy's show see it as a cynical attempt to generate goodwill among potential jurors in the Birmingham area, which is about 70% African-American.

"I've never seen the show because I don't watch infomercials," says Doug Jones, the Birmingham attorney leading a shareholder lawsuit against Scrushy. "It's clear that it's a jury selection strategy, and I guess it will remain to be seen how effective it might be."

Scrushy, who founded HealthSouth in 1984, was ousted from his job last year after a criminal investigation discovered accounting fraud of $2.7 billion. More than a dozen former executives acknowledged participating in the fraud before Alice Martin, the U.S. Attorney in Birmingham, filed charges against Scrushy a year ago.

Last month, Martin announced a superseding indictment against Scrushy that consolidated many of the securities fraud charges leveled against him and added charges of obstruction and perjury. Martin told a Rotary Club luncheon in March that she doesn't watch Scrushy's show, but that someone in her office tapes it every day in case Scrushy says something that could be used in court, according to The Birmingham News. So far, Scrushy seems to have avoided discussing his case on TV.

Rusty Hardin, the Houston attorney who defended Enron auditor Arthur Andersen against obstruction charges in 2002, says defendants have the right to use whatever means necessary to define themselves to the public. "I don't automatically disagree with people who decide to use the media," he says. "The dilemma for somebody like Scrushy is that the government uses official press conferences to create an impression of people that they're powerless to counteract unless they do something in response."

Through his spokesman, Charlie Russell, Scrushy condemned the "defamation" campaign he said had been waged against him, presumably by the U.S. Attorney's office, and the "unfortunate media feeding frenzy" that lumped him with other alleged business malefactors.

According to a statement from Russell, "Richard was raised in a churchgoing family and was saved at age 11. He felt called to the ministry at age 15 but put that call aside when he moved into teaching and then business. He has regularly attended church throughout his adult life and is married to the daughter of a minister."

Of his show, the statement says, "Viewpoint resulted from Richard finding time on his hands while awaiting trial. He sees the daily television program as a community service, providing uplifting programming while providing access to pastors and others performing essential services in the community which could not find a voice on ordinary commercial television."

Viewpoint isn't devoid of ads. Every morning, a 30-second commercial touts the services of Alamerica Bank, a local lender. The star of the commercial is bank Chairman Donald Watkins, a well-known Birmingham lawyer and head of Scrushy's legal team.

Charismatic leader

To watch the show is to get a glimpse of Scrushy, the charismatic leader. Most mornings, Viewpoint opens with a prayer from Leslie Scrushy, but it is Richard who animates the program.

He's no stranger to the stage. While HealthSouth's CEO, he fronted his band, Dallas County Line, cut a CD and took the band on tour to Australia. At least some expenses were picked up by HealthSouth, according to a court filing.

Scrushy also hosted a local radio show prior to his ouster last year, starring himself and Jason Hervey, a former child actor who played Wayne Arnold on The Wonder Years. Scrushy had hired Hervey as head of communications for HealthSouth, and each Tuesday evening, they traded banter on the air while calling each other "Cowboy" and "Gator."

Scrushy's utterances on Viewpoint run deeper than the idle radio chitchat he and Hervey used to share. Some of his monologues on God sound like speeches from his CEO days. During the Oct. 5 telecast, Scrushy talked about the power of faith and belief, criticizing people who whine about their circumstances, "talking and groaning and, 'I don't think I can do this' ... rather than taking a positive attitude and realizing where they need to be in Christ, and where they need to be every day in Scripture and where they need to walk."

Scrushy's call to the Christian faithful sounded similar to the motivational speech he gave to employees soon after founding HealthSouth in 1984. At that time, Scrushy complained that he and a few others were doing all the work. He drew a rudimentary sketch of a wagon being pulled by two people while bystanders watched.

The point, Scrushy argued then and many times afterward, was for all HealthSouth employees to pull the wagon. The metaphor eventually defined HealthSouth's self-image after a sculpture of a wagon and stick figures was erected at the company's modern headquarters outside Birmingham.

"When we were called and given the opportunity to do this television show," Scrushy continued in the same telecast, "we called up some of our dear friends and people we believe in. (They said,) 'You don't want to do that. That's too much work. You'll be attacked.' They were right. You know what those people are saying today? 'Thank God you did this.' We saw an opportunity. We saw a ministry. This wasn't about Leslie and Richard. This is about God."

Moments later, Scrushy delivered a message that would sound strange to the enemies, real and perceived, he has accumulated in his career: "It's not what people say about you that matters. It's what God sees in you that matters."

That's a radically different message from the one found on Scrushy's own Web site, www.richardmscrushy.com, which regularly blasts stories from the local paper that he deems unfair. As CEO of HealthSouth, Scrushy took legal action against people who criticized him. The Birmingham News reported that in 1998, for example, Scrushy hired a private investigator to uncover the identity of someone who criticized him and his family on an Internet message board, and then sued that individual for libel.

Scrushy refused to be interviewed for this article. According to his spokesman, the HealthSouth founder was unhappy with how he was portrayed in a USA TODAY story last year that included a detailed description of his lifestyle.

Scrushy loosed

For most of the past month, Scrushy has devoted his show to a 40-day prayer movement in Birmingham dubbed "City, thou art loosed." The movement, an ecumenical effort by various ministers to unite people, is supported by Christian radio shows in the market and 18 billboards around the city. It ends in a Nov. 1 prayer rally in downtown Birmingham.

One of the movement's organizers, Bishop Dusty Hammock of Point of Grace Ministries, says that 40 years after Martin Luther King was imprisoned in a Birmingham jail for his non-violent protests against segregation, the time has come for unifying the city.

In early September, Hammock convened a luncheon for about 150 ministers and pastors in the Birmingham area, and the daily prayer program began Sept. 3.

Hammock, a frequent TV guest of Scrushy's, says that when he told the former CEO about his plans, Scrushy said, "I would like Viewpoint to be a part of it." Hammock agreed, and Scrushy has devoted more than 30 shows to the topic.

Asked whether Scrushy might be using him to improve his chances of winning an acquittal at trial next year, Hammock says, "I've been asked that question many times. Here's the way I look at it: Jesus did not categorize people. Jesus did not say, 'I will hang out with these people, and I will not hang out with those people.' For him, it was not a matter of guilt or innocence. My interest is in Richard Scrushy as a person. My relationship with him has nothing to do with his innocence or guilt. I feel like I'm trying to honor that."

Scrushy's conduct as an evangelist contrasts with his old public behavior as a self-promoting CEO. That man created images of himself, such as a life-size statue of him erected at the HealthSouth Medical Center.

Before his ouster from HealthSouth, Scrushy contributed company funds to various schools in the Birmingham area. According to a court filing by the U.S. Attorney, Scrushy made the donations on the condition that a building or library be named after him.

Scrushy's actions now show his legacy is still on his mind. He named his infant son Jaden Malachi, an Old Testament name that means messenger of God. According to his Web site, Scrushy's wife gave birth to the boy (Scrushy's ninth child from three marriages) in September.

On his Oct. 5 show, Scrushy talks about raising children and laments the materialism that has taken over society. He urges his viewers to think twice about the advertising that bombards them.

"It's a real problem. If you can put God in your life, and you have a church, you've got a pastor that is teaching and feeding you, you've filled yourself with the spirit and accepted Christ, you become somebody else. Once you are filled with the spirit, a lot of that stuff (advertising) doesn't sink in anymore."

As a man who spent much of his business life accumulating the trappings of wealth, Scrushy knows whereof he speaks. The government has tried to freeze $278 million of Scrushy's assets, claiming that the money for them came from years of illegally inflating HealthSouth's stock price. When he was ousted from HealthSouth last year, he owned two airplanes, dozens of automobiles, nine boats, several million dollars of jewelry that he had bought for himself or his wife and properties valued at more than $22 million.

Despite the wealth and Scrushy's previous reputation, Hammock says he's impressed with the man he's come to know the past year.

"I have spent a lot of time with Richard," he says. "I have seen extreme genuineness. I've looked and I've found a genuine man, a very tender man, a man who talks about his desires and dreams."

Trial by fire

At least one of Scrushy's dreams is to beat the government's allegations that he masterminded the fraud uncovered at HealthSouth last year.

Scrushy's legal team, headed by Watkins, has filed a blizzard of legal motions and challenges aimed at undercutting the government's case. Scrushy's lawyers have argued against the legality of the Sarbanes-Oxley Act, under which Scrushy has been charged, and questioned Martin's handling of the grand jury investigation into wrongdoing at HealthSouth.

But one fact remains irrefutable: Martin has secured 17 cooperation agreements from former HealthSouth employees, including plea agreements from all five men who served as chief financial officer under Scrushy. It is expected they will testify that Scrushy orchestrated the fraud at HealthSouth.

Scrushy is ready for battle. Outside Guiding Light Church in a suburban neighborhood beyond the Birmingham airport, where Scrushy attends Sunday services and films his TV show, the message board displays the following exhortation from Pastor Jim Lowe: "Don't abort your trial. God is about to birth something great."