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High court allows Siegelman, Scrushy corruption convictions to stand

By Bill Mears, CNN Supreme Court Producer
updated 1:00 PM EDT, Mon June 4, 2012
STORY HIGHLIGHTS
  • Ex-Alabama Gov. Siegelman and HealthSouth founder Scrushy sought exoneration
  • The Supreme Court in an unsigned order lets their convictions stand
  • Scrushy made $500,000 in campaign donations and got a post on a state board

Washington (CNN) -- The public corruption and bribery convictions of former Alabama Gov. Don Siegelman and HealthSouth CEO and founder Richard Scrushy will stand after the Supreme Court rejected their separate appeals Monday.

The men were convicted in a political payback scheme. A jury found the governor had named Scrushy to a state regulatory board in exchange for $500,000 in campaign donations.

After years of litigation, the justices in an unsigned order allowed the criminal convictions to stand.

The specific question was whether a campaign contribution can constitute bribery if the contribution was not made in "explicit" exchange for a promise of an official act. Lawyers for the defendants said it cannot in their failed appeal to the high court.

The Justice Department said the men acted with "corrupt intent," and that the onetime Democratic governor and an aide tried to hide the campaign cash in a secret bank account.

The governor had begun a campaign in 1999 to set up a state lottery, and soon after named the powerful CEO to Alabama's Certificates of Need Review Board.

The lottery effort failed, and Scrushy was charged with helping cover the debt from the lottery campaign with the half-million dollars, partly in return for favorable treatment in government contracts.

Birmingham, Alabama-based HealthSouth Corp. is one of the largest health care rehabilitation service companies. Scrushy was eventually forced out after the trial and subsequent lawsuits from investors and shareholders.

Siegelman and Scrushy were convicted in 2006, a year after Scrushy was individually acquitted in a separate federal fraud probe involving his company. Scrushy and Siegelman eventually received about seven years each behind bars, and were fined.

Scrushy remains in federal custody in Texas, but was recently sent to a halfway house in the state. Siegelman was released four years ago on bail, pending appeal.

Related "honest services" fraud charges were eventually tossed out after the Supreme Court, in a separate case, narrowed the scope of the law, concluding the prosecution tactic was being misused as a "catch-all' statute, added to an indictment when evidence of serious criminal conduct may have been thin. Dozens of top business and government leaders had been accused of improperly withholding their "honest services" from constituents and shareholders, a violation of federal law dealing with fiduciary responsibilities.

The high court had allowed the unrelated conviction of Enron exec Jeffrey Skilling to stand, but limited when "honest services" charges could be used against business executives and politicians. The current Scrushy/Siegelman appeals were based solely on the related public corruption convictions.

The cases are Siegelman v. U.S. (11-955); Scrushy v. U.S. (11-972).

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