Race plays role in CEO’s fraud trial

Jury deliberating HealthSouth case

? HealthSouth Corp. CEO Richard Scrushy’s fate may be swayed by an unusual undercurrent in his white-collar trial – race.

Scrushy is a rich, white businessman, and every witness in his trial was white. So were all 15 one-time executives who pleaded guilty in the HealthSouth fraud.

But Scrushy was surrounded by black supporters most days in court, and black ministers often positioned themselves behind him as a backdrop for televised images.

Then, the defense played up racial themes during closing arguments last week, with one of Scrushy’s two black lawyers, Donald Watkins, comparing the millionaire’s plight to his own growing up in segregated Montgomery in the 1950s.

The racial undertones have been repeatedly mentioned in local media coverage, radio shows and barber shops, even before Watkins’ passionate closing remarks.

It even spawned a joke: What’s the difference between Michael Jackson and Richard Scrushy? Jackson is a black guy who became white before his trial; Scrushy is a white guy who tried to become black before his.

The jury of six blacks and six whites resumes deliberations today into claims that Scrushy directed a $2.7 billion earnings overstatement at the rehabilitation and health services chain.

Fired HealthSouth Corp. CEO Richard Scrushy, center, leaves the courthouse during the closing arguments in his fraud trial Wednesday at the Hugo Black Federal Courthouse in Birmingham, Ala. The jury resumes deliberations today.

Scrushy claims he is innocent and was unjustly targeted by the government – an experience many Southern blacks can relate to, said Herman Henderson, a black minister and activist who attended much of the trial.

In closing arguments, Watkins, 56, recalled not being able to drink from water fountains or use public rest rooms in department stores. Courts with “a jury like you” changed all that, said Watkins, claiming Scrushy was wrongly targeted and more change is needed to end such abuses.

The first step, Watkins claimed, is the acquittal of Scrushy.

“It will change, not just for Birmingham, it will change all over the nation. Just like when I couldn’t drink out of the water fountain, now I can drink out of any water fountain in the nation. It changes,” Watkins said.

The defense denied any special effort to win sympathy among black jurors or the minority community, and such a move could be risky since the 12-person panel is evenly split between blacks and whites.

Former prosecutor Don Cochran has a hard time believing jurors could actually be swayed by a racial appeal.

“It’s just too transparent,” said Cochran, who teaches law at Samford University in suburban Birmingham. “I just can’t believe that race is going to have anything to do with this case.”

Watkins, Scrushy’s chief legal strategist, denied his client was targeting the black community in an effort to build sympathy.

“I don’t think it’s a matter of race. I don’t understand why people focus on that,” Watkins said.

But the trial’s racial tableau was sustained throughout.

Aside from relatives, most people who showed up in court regularly to support Scrushy during 3 1/2 months of trial were black. Some were friends from the mostly black Guiding Light Church, which Scrushy and his wife began attending after the HealthSouth scandal was uncovered. Scrushy donated more than $1 million to the congregation in 2003, the year the fraud became public.