Court OKs most Siegelman charges, all of Scrushy's

A federal appeals court on Friday upheld most of the bribery and corruption charges against former Alabama Gov. Don Siegelman and all of the charges against former HealthSouth CEO Richard Scrushy.

A three-judge panel of the 11th U.S. Circuit Court of Appeals in Atlanta struck down two of the seven charges that Siegelman was convicted of and ordered a new hearing in which his sentence of more than seven years may be reduced.

But the court upheld key bribery, conspiracy and obstruction counts against Siegelman in what prosecutors described as a scheme in which he put Scrushy on a state hospital regulatory board when he was at the helm of HealthSouth.

The court upheld all six counts against Scrushy and his sentence of almost seven years.

Siegelman, 63, and Scrushy, 56, were convicted in 2006 by a federal court jury in Montgomery, where Siegelman was a prominent Democrat with a political career dating back three decades.

Siegelman has claimed his prosecution was pushed by Republicans, including former White House adviser Karl Rove, a claim career federal prosecutors who handled the case have emphatically denied.

Prosecutors argued that Siegelman appointed Scrushy to the influential board in exchange for Scrushy arranging $500,000 in contributions to the governor's campaign for a state lottery in 1999.

Siegelman also was convicted on a single obstruction of justice count linked to the purchase of a motorcycle with the help of a lobbyist.

The former governor, who was sent to federal prison at his sentencing in June 2007, was freed last year on appeal bond. But the courts ruled the wealthy Scrushy, who turned Birmingham-based HealthSouth into one of the nation's biggest rehabilitation chains, was a flight risk.

The appeals court judges, in a unanimous decision, rejected a key defense argument that prosecutors failed to prove there was an explicit "quid pro quo" agreement between Siegelman and Scrushy, which is required in federal bribery cases. The defense also argued that U.S. District Judge Mark Fuller did not adequately instruct jurors that such an agreement was necessary.

In a 68-page opinion, the panel said that the instructions Fuller gave jurors was sufficient.

The judges also rejected defense arguments of juror misconduct involving a claim that some jurors exchanged e-mails and were subjected to outside influences during jury deliberations.

The judges ruled that Fuller adequately investigated the juror misconduct charges.

"We conclude that the district court did not abuse its discretion in holding that there was nor reasonable possibility of prejudice to the defendants arising out of the exposure of the jury to this extrinsic evidence," the judges wrote.

The judges also threw out defense arguments that the indictments against Siegelman and Scrushy came after the five-year statute of limitations in bribery cases had expired. The judges said they waived their right to make that claim by not raising the argument until after the trial.

The three-judge panel - Chief Judge J.L. Edmondson, Judge Gerald Bard Tjoflat and Senior Judge James C. Hill - threw out two mail fraud counts that accused Siegelman of helping Scrushy benefit from being on the Certificate of Need Review Board.

Prosecutors said Scrushy's company benefitted when the board approved HealthSouth's applications for a high-tech scanner and to build a rehabilitation hospital in Phenix City. But Scrushy was off the board at the time those decisions were made and the judges said there was "no evidence that Siegelman participated in the events forming the basis for the charges."