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New charges for Siegelman

By Phillip Rawls
Associated Press Writer

MONTGOMERY — A federal grand jury investigating government corruption issued a new indictment Monday expanding the charges it had filed against former Gov. Don Siegelman and former HealthSouth Chairman Richard Scrushy.

The new indictment adds conspiracy and mail fraud charges involving payments of $3,000 and $8,000 to a member of a state health regulatory board. Siegelman and Scrushy are accused of providing HealthSouth with membership on and influence over the board by using hidden payments and financial relationships.

Siegelman called the latest grand jury action another attempt to destroy his Democratic campaign for governor.

"They are going to try to pull every trick in the book to manipulate the 2006 election," the former governor said Monday.

Federal prosecutors have said repeatedly that no politics are involved.

Scrushy reacted to the charges by saying there was no conspiracy with Siegelman. "The Department of Justice appears to be desperate to make a PR case against me even though there is no substance to any legal charges," Scrushy said in a statement.

The federal grand jury issued an indictment Oct. 26 against Siegelman, Scrushy and two former members of Siegelman's Cabinet, chief of staff Paul Hamrick and transportation director Mack Roberts. Federal prosecutors said the charges stemmed from "a widespread racketeering conspiracy" in which state officials traded official actions for money and gifts.

It charged Siegelman with racketeering, bribery, mail and wire fraud, extortion, and obstruction of justice, and it charged Scrushy with bribery and mail fraud.

The new indictment incorporates all the charges from the October indictment and adds the new counts against Siegelman and Scrushy, but none against Roberts and Hamrick.

It focuses on the State Certificate of Need Review Board, whose members are appointed by the governor to approve or reject hospital construction projects and major equipment purchases.

The earlier indictment accused Scrushy of directing $500,000 to Siegelman's unsuccessful campaign for a state lottery in 1999 in return for Siegelman appointing Scrushy to the hospital regulatory board.

The new indictment accuses Siegelman and Scrushy of making sure that when Scrushy left the CON Board, he got replaced with another HealthSouth employee, and it alleges two payments to an unnamed member of the CON Board:

  • $3,000 to a member to create a quorum at a meeting in August 2002, where a HealthSouth hospital got approved.
  • $8,000 to a member to draft an application for medical scanning equipment for HealthSouth. The equipment was approved at a December 2002 board meeting, where the presence of the member created a quorum.

    The federal grand jury investigating Siegelman's administration has met off and on since June 2004, but after issuing the new indictment Monday afternoon, members said their goodbyes to each other as they left the federal courthouse.

    Assistant U.S. Attorney Louis Franklin, who is directing the investigation, said he does not anticipate the grand jury meeting again, and it will officially go out of business on Dec. 21.

    No trial date has been set for Siegelman or those indicted with him. But his attorney, Doug Jones, said the new indictment could delay when the trial might begin.

    "Two months after the last indictment, we get another one that appears to be an attempt to delay the trial and put it right in the middle of the primary season," he said.

    Siegelman is running in the Democratic primary June 6 against a field that includes Lt. Gov. Lucy Baxley.

    Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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