-- Jurors in the trial of HealthSouth Corp. founder Richard M. Scrushy said Wednesday that they leaned toward acquittal from the start of deliberations and that testimony from government witnesses was not credible.
During the trial, the jury heard months of testimony from five former HealthSouth chief financial officers, each of whom had pleaded guilty to fraud charges. But the panel of seven men and five women was not convinced and voted Tuesday to acquit Scrushy after 21 days of deliberations.
"There were five CFOs who testified against Scrushy and they all seemed to have had some reason to lie," said juror Christopher Cooper, 37, from his home in a Birmingham suburb.
Scrushy had faced 36 criminal charges in connection with a $2.7 billion accounting fraud at the rehabilitation hospital chain. He was the first executive prosecuted under the 2002 Sarbanes-Oxley Act, a corporate responsibility law passed in after financial collapses at Enron Corp. and WorldCom Inc.
When deliberations began last month, about seven jurors were inclined to acquit Scrushy, a number that grew over time, said juror Debra A. Williams, a 50-year-old security guard.
The first stumbling block was confusion over instructions provided by U.S. District Judge Karon O. Bowdre. Some jurors found what they believed were conflicting instructions on whether a unanimous vote was needed on all counts, Williams said in a telephone interview. The panel sent Bowdre several notes seeking clarification.
Williams said the atmosphere in the jury room was mostly cordial. She said jurors had got past disagreements during deliberations by returning to the evidence books.
"I think everyone had their say," she said.
Jurors who favored acquittal believed the government had failed to prove that Scrushy had knowledge of the crimes and "that he willfully did it," Williams said.
But Willis G. Vest, 63, who was dismissed from the panel last week because of health reasons, disputed the notion that the government failed to prove its case and said he was one of the few jurors prepared to convict Scrushy.
He said the most compelling evidence came from former HealthSouth treasurer Leif Murphy, who showed notebooks during his testimony that depicted the fraud.
"To me there was more than ample evidence that [Scrushy] knew of the fraud," Vest said. "We had a ton of testimony, from so many different people, and the notebooks."
Vest, a quality control engineer at BellSouth, where he has worked for more than 40 years, said he wanted to stay on the jury, but the judge dismissed him because he had missed one day of testimony and three days of deliberations because of migraine headaches.
For most jurors, prosecution witnesses had credibility problems and had an interest in the outcome because of previous deals arranged with the government, Cooper and Williams said.
Cooper, known as Juror No. 152, said he found testimony from former chief financial officer William T. Owens troubling because it came out in the trial that Owens was delinquent in filing federal tax returns for about nine years.
"He was hiding his finances," Cooper said. "And his wife received the proceeds and used it for houses and land."
One government witness secretly taped conversations with Scrushy using a recording device sewn into his necktie. But Cooper, a computer specialist, said it was hard to tell what the conversations were about.
"At one point they were talking about their families and you couldn't tell if they were talking about trying to protect kids or whether they were talking about fraud," he said.
But Vest said he that believed the audiotape evidence and that while Scrushy may not have made the false entries himself, "I believe he knew what was going on."
The jury was composed of seven blacks and five whites from working-class neighborhoods. Deliberations were interrupted several times by illness and vacations. On June 3, the jurors sent Bowdre a note saying they were deadlocked, but Bowdre encouraged them to continue.
After Vest was dismissed and replaced by an alternate, the panel spent five more days deliberating before reaching its verdict. Williams said the alternate juror's arrival cost more time, because he had to familiarize himself with the instruction book and "had lot of questions" about the evidence.
Wednesday, outside the gates of Scrushy's large brick house in an upscale Birmingham neighborhood, TV reporters buzzed an intercom. No one answered. One of his lawyers, Donald V. Watkins, said he was "taking some time off to be with his family."
Watkins said that the government was "sloppy in its investigative techniques" and that the FBI "rushed to judgment."
U.S. Attorney Alice H. Martin declined to comment yesterday.
During the trial, Watkins and another Scrushy defense lawyer James W. Parkman III played to the hometown crowd by speaking in their Southern drawls.
"We were down-home about our approach," Watkins said. "We didn't have a stuffy presence. You have 12 human beings up there, in a box, and they enjoy seeing lawyers as human beings."
Vest said the defense team's folksy approach left an impression on jurors, who gave Parkman the nickname "Matlock" after the fictional defense lawyer portrayed on television by Andy Griffith.
Scrushy still faces civil charges filed by the Securities and Exchange Commission, as well as shareholder lawsuits. But a federal judge yesterday set a hearing for July 7 ordering the SEC to show why the civil charges should not be dismissed, Bloomberg News reported.
Vest expressed disappointment with the trial's outcome, noting that HealthSouth's shareholders lost their savings and employees lost their jobs.
"I guess I was the last holdout," he said. "I stuck to my guns, I believe the evidence was there."
Starkman reported from New York. Staff researchers Richard Drezen, Madonna Lebling and Karl Evanzz contributed to this report.