Wednesday, May 11, 2005

Will Scrushy Be the Next Defense Witness?

The trial of Richard Scrushy has turned positively somnambulant over the past week as the defense called two expert witnesses to split hairs about the value of Scrushy's stock options and the effects of the fraud on HealthSouth's share price.  Things may have hit a new low on the interest meter on Tuesday when the defense spent the day reading into the record transcripts of two witnesses who testified last year at the SEC's asset freeze hearing but who have since asserted their Fifth Amendment privilege and refused to testify (with the government unwilling to grant immunity).  If you have ever had the joy of reading a transcript to a jury (grand or petit) you know just how boring the process can be..  That may change in the next day or so, however, as lead defense trial counsel James Parkman has indicated that Scrushy is prepped and ready to take the witness stand.  This will be the key to the defense because the other witnesses will be overshadowed by the direct and, more importantly, the cross-examination of the former CEO. 

Of course, Parkman has hinted that he may not call Scrushy to testify, no doubt trying to keep the government off-balance and creating the possibility that prosecutors would appear unprepared if he were to suddenly rest the defense case.  Given the particular spin on the "Honest-but-Ignorant CEO" defense being used here, which accuses HealthSouth's Five Guilty CFOs (and others) of actively lying to Scrushy for years and not just that the defendant did not pay attention to all that complicated accounting stuff (the Ebbers/Lay variant), it will be difficult for him not to testify to try to counter the extensive testimony about his involvement in all aspects of the company.  This just seems like a very difficult case to rely on the burden of proof, attacking witnesses who entered plea bargains, and accusations that everyone lied and engaged in a grand conspiracy to keep Scrushy in the dark without the defendant saying what he did and did not know.  The trial can move from something just this side of watching paint dry to an edge-of-the-seat drama once Scrushy takes the witness stand. An AP story here discusses the statements of Scrushy's counsel about the possibility of calling him to testify. (ph)

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