Scrushy name, likeness under assault in Birmingham
Mon April 7, 2003 05:05 PM ET
By Verna Gates
BIRMINGHAM, Ala., April 7 (Reuters) - The latest joke going around Birmingham is that
HealthSouth Corp. founder Richard Scrushy, who is facing fraud and insider trading charges,
would plea bargain for jail time if officials agreed to name the prison after him.
With a flashy style that kept him out of all of the exclusive country clubs in town,
Scrushy seemed never to tire of seeing his own name in giant letters, or his image in the
kind of larger-than-life portraits and statues usually reserved for revered historic figures.
But while the old-money crowd never warmed to Scrushy, others were only too happy to accept the
spoils of his newfound wealth as universities and college sports facilities, a public library,
charities and even a stretch of highway -- the Richard M. Scrushy Parkway -- bore the name of the
Lately, Scrushy's name most often appears in headlines trumpeting the latest chapter in a
fast-growing accounting scandal at HealthSouth HLSH.PK and mounting accusations against Scrushy
himself -- and Birmingham is scrambling to distance itself from its former favorite son.
In a classic example of how the mighty has fallen, buildings across Birmingham are busy removing
the Richard M. Scrushy name, as the one-time biggest fish in the Alabama pond is being cut down to size.
A multibillion-dollar scandal threatening to shatter a corporation that had been the pride of the
"New South" will have that effect, it appears.
If the U.S. Securities and Exchange Commission is correct, the son of a small-town cash register repairman
did some numbers-fixing of his own as he built his company into the nation's largest owner of rehabilitation
hospitals and outpatient surgery centers.
Scrushy, who was fired by HealthSouth last week, is already facing civil fraud and insider trading charges
from the SEC, while the government builds its criminal case against him. Several former HealthSouth executives
have agreed to cooperate with the Scrushy investigation.
On Monday, a group of HealthSouth workers filed suit against Scrushy and the company's employee stock
ownership program, saying the stock was an inappropriate investment for a retirement plan.
A call to Scrushy, who founded the company in 1984, was referred to his attorney, Donald Watkins, who did
not return calls seeking comment.
With eight HealthSouth executives so far pleading guilty to charges of artificially inflating earnings by
$2.5 billion over several years, the backlash has been swift in Birmingham, a former steel town of 850,000
that had shaken off the rust and remade itself in a modern commercial image with HealthSouth as one of its
A statue of Scrushy outside the HealthSouth Medical Center in south Birmingham was defaced last week with
the word "Thief" spray-painted on it.
A nearby bronze statue of Dr. Larry Lemak, a Birmingham surgeon who has worked on Jane Fonda's knees and
former two-sport star Bo Jackson's hip, was spared. "They were very selective in the desecration," Lemak quipped.
In possibly the unkindest cut, the first Birmingham institution to dump the Scrushy name was the company
he helped create. A receptionist at the Richard M. Scrushy Conference Center at HealthSouth Headquarters
now answers the phone simply "Conference Center." Workmen last week tore down the Scrushy name and yanked
his portrait, leaving faded shadows.
"It's an old Pharaoh trick to scratch off the name," said a local attorney who insisted on anonymity. "It reminds
me of the Shelley sonnet Ozymandias, where the man comes upon the ruined statue that proclaims him king forever,
when actually his power was really vanity and futility."
CHARITIES LEERY OF SCANDAL
In Birmingham, Scrushy was something of a larger-than-life figure, whose flamboyant outside activities included
piloting his own planes, managing the musical fortunes of a girl group and performing in his own country band.
But as his image becomes as tarnished as his defaced statues, even charities that gained from Scrushy's
beneficence are shying away.
At Birmingham's shiny new Lakeshore Foundation Olympic and Paralympic Training Center, the word "Fieldhouse"
looks a little uncentered as "HealthSouth" was hastily removed from the sign before the Olympic rings were
unveiled last week.
A United Cerebral Palsy event set for next week in which the controversial former CEO was to give out the
Richard M. Scrushy Awards of Courage has been scrapped. The children slated to receive the courage awards
will now be honored quietly in their schools.
Universities are having a bit more trouble gaining a sporting distance.
Jefferson State Community College, for example, has an entire Richard M. Scrushy Campus.
Birmingham-Southern College and Troy State University both have namesake ball fields. The Birmingham-Southern
baseball venue -- Scrushy-Striplin Field -- will keep the name for now. "We're just going to let it play out,"
college spokesman Bill Wagnon said of the unfolding scandal.
The Vestavia Hills public library, complete with the Scrushy name and requisite portrait, is holding firm to
the Scrushy connection while Mayor Charles "Scotty" McCallum awaits a final verdict.
"As I understand it, in this country you are innocent until proven guilty," he said.
Few others appear to be presuming the fallen giant's innocence.
"He built the house of cards and it ultimately fell," said a patron of a Birmingham Mexican restaurant.
Some locals, referring to Scrushy's musical proclivities, joked that prison time should at least improve
his ability to sing country music.