Posted by John SOH Yong Ye, Year 4 undergrad at the School of Economics, Singapore Management University
I had meant to take a stroll down Memory Lane, or maybe a Nightmare on 18th Street, where 10 years ago in the cold I waited on the corner with a gaggle of other reporters for Richard Scrushy to approach the federal courthouse.
This week marks 10 years since the former HealthSouth CEO went on trial there, beginning a six-month courtroom circus from which he would walk away a free man. (He was convicted two years later of bribing former Alabama Gov. Don Siegelman, but that’s another story.)
I was going to reminisce about the ineptitude of the prosecution, the bumbling of the court and the audacity of the defense. During closing arguments, his lead lawyer, Donald Watkins, literally wrapped himself in the American flag and pleaded with jurors to “get our government off its knees” for goodness sake.
Instead, I found something that gave me chills about the present and for a moment forget about the past.
Google “Richard Scrushy” and you’ll quickly find his personal website. There he pitches his services as an inspirational speaker and a mentor for young entrepreneurs. You can even buy his book, “When Building a Billion Dollar Company Here Are Some Things to Think About.”
Curiously, there’s almost nothing about his time in prison or the calamity that he left behind at his former company.
Except for one YouTube video.
More than an hour and a half long, it serves as proof that someone is paying to hear the disgraced executive tell his story.
Last summer, Pfeiffer University in North Carolina invited Scrushy to be the keynote speaker at its conference on fraud and criminal investigation, which is like asking Hannibal Lecter to teach your after-work cooking class.
As Scrushy tells the story, he was the victim – of his executives, of the government and of the media. I spent the better part of a day piecing through just the lies I could prove when something unexpected happened.
I heard Richard Scrushy tell the truth.
“The FBI does not raid companies like they did back in those days,” he said. “Today — just like they did JPMorgan and they did others — they sit down and negotiate settlements with them. If there is a problem in a company and they find it – if they find whatever the problem is, we don’t even see heads roll. People are still in their leadership positions.”
Instead, those companies pay fines, he said. I’d argue that the fines they pay never come close to the damage they’ve caused, but I interrupt, which you never should do when the truth is coming from Scrushy.
“Why?” he asked. “It certainly is a lot more economical for the federal government to take in a billion dollars than to spend a billion dollars trying to find something wrong with a company.”
I’ve got several bankers boxes full of notes at home that I’ll happily trot out in a rebuttal of almost everything else Scrushy said in that speech. (His claim that the only person who testified against him did so after a sentencing deal from the feds is so fanciful it comes close to warranting a psychiatrist.)
But that little nugget there – which Scrushy casts as a good thing, by the way – I can’t argue with.
Ten years ago we saw the debacles at HealthSouth, Enron, WorldCom and Tyco turn into a parade of white collar defendants marching through federal courthouses and (for many) into prison.
Today, the fraud those companies perpetrated seems almost laughable compared to what led to the financial disaster of 2008 and the Great Recession that followed.
And yet, how many have gone to jail? (Bernie Madoff went to the pokey over a Ponzi scheme, but that doesn’t really count.) Seriously, can you name one?
“There’s no perp walks,” Scrushy said. “There’s no locking up CFOs and CEOs. It’s not happening today.”
No, it’s not. And with that, I got my wish, looking back at 2005 with nostalgia – back to the good old days.