Eagle Staff Writer
Thursday, May 19, 2005
BIRMINGHAM – Defense attorney Jim Parkman ended his closing argument in the fraud trial of Richard Scrushy by unveiling a cartoon drawing of a big, pudgy rat carrying a wedge of swiss cheese on top of its head.
The Dothan lawyer began his closing by calling the case against the former HealthSouth CEO a “Wisconsin prosecution.”
“It’s a Wisconsin prosecution because this is a case that has more holes in it than swiss cheese,” Parkman told the jury in the Hugo Black Federal Courthouse.
In between, Parkman delivered a blistering 90-minute discourse that had trial spectators buzzing and discussing his patented Southernisms, including asking just how clean a Winn Dixie chitlin is supposed to be.
At times, Parkman was the tent evangelist, his voice and inflection rising to a fever pitch as he defended Scrushy from 37 counts ranging from conspiracy to commit fraud to securities fraud, wire fraud and money laundering.
At other times, he spoke in hushed tones as some members of the jury leaned in to catch his words.
He took center stage Wednesday in the biggest case of his life. He used props, gestured forcefully, invoked NASCAR and walked around the crowded courtroom, at one time singling out his wife, Joy, to make a point to the jury. He later apologized to her for spending Valentine’s night poring over volumes of documents, searching for a $55.11 receipt to a Mexican restaurant in Birmingham.
He even danced at one point, then apologized to the jury for his poor dancing skills.
“Sorry, that’s the best I can do,” said Parkman as sweat began to trickle down the back of his neck.
Scrushy, 52, has been accused of a massive fraud scheme at HealthSouth. Prosecutors argue that when Scrushy saw that the health services giant was going to fall short of Wall Street expectations, he directed others to falsify earnings in order to please investors and prop up the company stock. Prosecutors say Scrushy profited by exercising more than $200 million worth of stock options in 1996, 1997 and 2002 during the time the alleged fraud took place.
The defense has claimed Scrushy was unaware of the fraud and that a group of Scrushy’s employees masterminded the fraud so they could earn yearly bonuses for the company’s financial success.
Parkman claims the fraud was directed by former HealthSouth CEO Bill Owens, who he claims wanted to oust Scrushy and take over the company himself. Owens and several other HealthSouth employees have plead guilty in connection with the case and testified against Scrushy in the four-month long trial.
Parkman, in keeping with his cheese analogy, called Owens the “big rat” and the other employees “a pack of mice.” His dancing came when Parkman tried to show jurors how happy he believed Owens was after he made a deal with prosecutors to testify against Scrushy. “What happens when you shine the light of truth on a pack of mice? They scurry and run,” Parkman said.
At one point, Parkman said the prosecution had been damaged by the credibility of early witnesses and began looking for other witnesses that might be more credible.
“That’s what they were looking for. They were hoping to go out there and find someone they could bring here and put on the stand that would be as clean as a Winn Dixie chitlin,” said Parkman, who was called a “hick lawyer” last year by a local radio talk show host.
Some jurors grinned. A few chuckles could be heard around the courtroom.
Prosecutors labeled Scrushy the “commander in chief” of the multi-billion dollar fraud that eventually caused investors to lose practically all of their money in the company when the stock was delisted.
But Parkman said Owens was the mastermind, and devoted about half of his closing argument to a withering attack on Owens.
“Richard Scrushy was no intimidator. Bill Owens was the intimidator. He’s a better intimidator than Dale Earnhardt ever was,” Parkman said.
Owens secretly taped Scrushy for two days before the FBI arrested Scrushy. Clips of the recordings were emphasized during the prosecution’s closing arguments. U.S. Attorney Alice Martin argued the tapes showed Scrushy had knowledge of the fraud.
Parkman put his Dothan law practice on hold and became Scrushy’s lead attorney about eight months ago. Since then, he has holed up in Birmingham through the week, managing his defense team and conducting the trial. On weekends, he travels back to Dothan to spend time with his family. It is not known how much Parkman is receiving for his services, but published reports in October said Scrushy had already spent about $20 million on his defense since his indictment in 2003.
If convicted on all counts, he faces a maximum prison sentence of about 400 years and fines of around $30 million. He would also be the first executive convicted under the Sarbanes-Oxley act, passed in response to accounting fraud found at Enron and WorldCom. The act calls for harsh criminal penalties against anyone convicted of certification of false financial statements. The jury begins deliberations today. It is not known how long it will take for the jury to go through the mountain of documents.
Parkman has said he would like to disappear into the mountains for two weeks after the verdict. Instead, he plans to return to Dothan to catch up on almost eight months of case work.
Richard Scrushy Jumps Free of a Briar Patch: Ann Woolner
July 1 (Bloomberg) — If federal agents ever catch me helping myself from a corporate cookie jar, I would say, Fine. Bring on the trial.
Put me in a New York City courtroom if you want, I would tell them. But whatever you do, please don’t send me to Birmingham, Alabama. What a briar patch that place is.
And if they say they are looking for a lawyer from among all the Justice Department’s fine attorneys in Washington to prosecute me, I would say, good. I would ask for one little favor. Just don’t give me those guys who tried Richard Scrushy.
If my trick works, as it did for Brer Rabbit in a folk tale retold by Joel Chandler Harris, they would send my case to Birmingham and assign the same Washington prosecutors Scrushy got. Then I would say, Give me any judge you’ve got, except for one. Please don’t give me Judge Karon Bowdre.
Bred and born in the briars of Alabama, HealthSouth Corp.’s Richard Scrushy did well when the Justice Department picked the venue and the prosecutors for his trial, and when the luck of the draw gave him Bowdre.
All of that helped win him a stunning acquittal this week, when a jury found him not guilty of 36 counts of fraud, conspiracy, money laundering, lying to the government and breaking the Sarbanes-Oxley law.
But none of that would have made the critical difference if it hadn’t been for the one thing actually within Scrushy’s control: his lawyers. This was a team that knew how to make the most of what providence gave them.
Jim Parkman, the flamboyant Dothan, Alabama, lawyer, has drawn most of the attention for his courtroom antics and down- home humor. More on that later. But at least as important were the substantial technical skills of former federal prosecutor Arthur Leach from Atlanta.
He is the one who launched “the real structural attacks on the government’s case,” notes Buddy Parker, a longtime prosecutor in Atlanta, where he now defends white-collar cases. Parker has no role in the Scrushy case.
With their varied talents and many lawyers, the Scrushy team knew how to keep out of the courtroom damaging evidence while neutralizing the substantial evidence the government did present.
And they knew how to encourage the jury to demand more evidence than the government could possibly have. Repeating a refrain from defense closing arguments, jurors said in post- verdict interviews that investigators should have dusted a particularly damaging binder of financial papers to look for Scrushy’s fingerprints. They simply did not buy the prosecution’s explanation. Nor was the government helped much by the annoying presence of Richard Smith and Richard Wiedis, two of the prosecutors from the Justice Department in Washington.
Wiedis refused to abide by some of Bowdre’s admonitions, continuing to ask leading questions, for example, and trying to slip in forbidden references to Enron Corp.
This gave Leach an opening, and he objected every time.
“He kept the government constantly off balance,” says James Jenkins, an Atlanta lawyer whom Leach brought into the defense team to work off-site. “Through his objections, the government was never able to tell a story through a witness or get any rhythm going.”
Before the trial began, Leach persuaded Bowdre to disallow evidence of Scrushy’s lavish lifestyle, which prosecutors said showed motive for the fraud. Kept out of the jury’s view were photographs of his Lamborghini, his Rolls Royce, his Cessna, his 92-foot yacht and each of his several mansions.
At trial, Leach persuaded her to toss out the sworn statement Scrushy gave the Securities and Exchange Commission and with it three perjury counts. And he persuaded her to essentially kick off the witness stand one of the prosecution’s expert witnesses.
Meanwhile, Parkman knew how to work this ‘bama briar patch. He played to the anti-Washington suspicion that runs through the region.
“The populist, libertarian underpinnings of the population of that state is just absolutely present,” says Parker, a native of Alabama. “Are they patriotic? Absolutely. Are they supportive of the federal government trying to take down one of their own, who’s obviously been trying to help them out for all these years? No,” says Parker.
Us and Them
This us-versus-them attitude cuts across racial and class lines, he says. Defense lawyers became the “us,” while prosecutors and their key witnesses obliged by unwittingly becoming “them.”
In his closing remarks to the jury, Parkman invoked NASCAR driver Dale Earnhardt and offered a subtle reference to Jesus. He described one witness as being “as clean as a Winn-Dixie chitlin.” He distinguished “good people like you and me” from bad people like chief prosecution witness Bill Owens.
Not even Parkman could outdo defense lawyer Donald Watkins in his appeal for the jury to distrust the prosecution.
He referred to “the folks up in D.C., the big shots, the ones who call the plays, who make the decisions for the group here. I am talking about that bourbon-sipping, martini-drinking, cigarsmoking crowd, the ones who gather at seven o’clock out at the club.”
What ‘They’ Think
“They don’t think we have got any sense at all down here,” Watkins told the jury in closing. It’s a rare federal judge who would allow a lawyer to get away with that sort of argument. Or with displaying a cartoon of a rat, which Parkman did to compare it to Owens. Or with invoking the segregated past of the South, as Watkins did in his closing.
By that time, the judge and the prosecution had long since handed control of the trial and the jury to the defense.
And with that (and with apologies to Joel Chandler Harris), Scrushy skipped out just as lively as a cricket in the embers.