Government Outlines Reasons Scrushy/Siegelman Sentences Should Depart from Guidelines - WSFA.com: News Weather and Sports for Montgomery, AL.

Government Outlines Reasons Scrushy/Siegelman Sentences Should Depart from Guidelines

MONTGOMERY, Ala., May 25, 2007 -- Attorneys for the government along with their sentencing memoranda filed May 25, 2007 concerning former Gov. Don Siegelman and businessman Richard Scrushy also filed motions with the court outlining why those sentences should fall above the range of the advisory sentencing guidelines.

Note:  Siegelman and Scrushy have until May 29, 2007 to present information regarding downward departure from the guidelines should they so choose.

With regards to the former governor, the prosecution alleges "pervasive government corruption."

"The United States so moves this Court because Defendant Siegelman's criminal activity is far outside the "heartland" of cases considered by the Guidelines. In particular, Defendant Siegelman's criminal conduct was part of a systematic and pervasive corruption of the office of Governor and Lieutenant Governor, as well as various state agencies, such as the CON Board, of the State of Alabama that may cause loss of public confidence in government. To support this Motion, the United States provides as follows:"

"I. This Court Should Upwardly Depart in the Sentence of Defendant Siegelman Because His Criminal Conduct Was Part of a Systematic and Pervasive Corruption of the Office of Governor and Lieutenant Governor that Caused Loss of Public Confidence in Government.

The United States contends that an upward departure of four levels is warranted in this case under Section 5K2.0 because Defendant Siegelman's conduct "was part of a systematic or pervasive corruption of a governmental function, process, or office that may cause loss of public confidence in government."

"...The evidence at trial established beyond a reasonable doubt that Defendant Siegelman executed a bribery agreement, a conspiracy, and an honest services fraud scheme that together injected corruption throughout the government of the State of Alabama as Defendant Siegelman and his co-conspirators utilized every opportunity to extract money through the use of Defendant Siegelman's political power in the Office of Governor and Lieutenant Governor of the State of Alabama. "

"If any public corruption case can ever meet the standard for this expressly recognized departure, and if the inclusion of that departure in the Guidelines commentary is to have any meaning at all, then this case must warrant the departure as a paradigmatic example of pervasive government corruption."

"Specifically, the offense conduct reflected in Counts 4-9 establish pervasive corruption of the Office of Governor and the Alabama CON Board. Not only did Defendant Siegelman corrupt the Office of Governor by selling Defendant Scrushy a seat for HealthSouth on the CON Board, but he also further corrupted the CON Board because he agreed to provide Defendant Scrushy with influence over the CON Board to affect the interests of HealthSouth and its competitors. The further corruption of the CON Board included foreseeable offense conduct such as the concealed payments and employment given to Tim Adams, and the ex parte lobbying of CON Board Chairperson, Margie Sellers."

"Further, the offense conduct reflected in Count 17 establishes the introduction of corruption into no less than eight further components of Alabama government. Specifically, the evidence at trial showed that the obstruction of justice found by the jury in Count 17 was for the purpose of concealing Defendant Siegelman's corrupt activities, including, but not limited to, his criminal relationship with Lanny Young."

"Defendant Siegelman's criminal conduct with Young included the Goat Hill Construction project, for which the evidence showed that Defendant Siegelman and his co-conspirators exerted corrupt influence upon the Alabama Department of Finance, the Montgomery Downtown Redevelopment Authority, the Alabama Alcohol Beverage Control Board, and the Alabama Department of Economic and Community Affairs. Defendant Siegelman further exerted corrupt influence on Young's behalf concerning Talladega Speedway legislation in the Alabama Legislature. "

"Moreover, Defendant Siegelman and his co-conspirators exerted corrupt influence on Young's behalf at the Cherokee County Commission concerning Young's involvement with the Three Corners Landfill, at the Alabama Department of Revenue and the Alabama Department of Environmental Management concerning regulation of Young's client, Waste Management, and at the Alabama Development Office concerning the financial interests of another Young client, Bill Blount."

"...In this case, Defendant Siegelman stands convicted of corrupting and abusing the office of Governor of the State of Alabama,...Defendant Siegelman used his position as Governor to corrupt the Alabama Legislature andseveral different state agencies to effectuate his criminal schemes, ...The amount of loss inflicted on the citizens of Alabama, and the degree of improper benefit received, from Defendant Siegelman's criminal behavior was far greater than the amount the defendant received from the kick-back scheme in Shenberg. Certainly, the extensive and widespread press coverage about this case manifests the public's keen interest in Defendant Siegelman's criminal actions, reflects the concern the public has for his abuse of political office and power, and demonstrates the loss of public confidence in government that has resulted from his criminal conduct."

"If any case can ever qualify for a departure to account for systematic and pervasive corruption, this is that case given the tremendously harmful effect upon public perception of and confidence in Alabama state government resulting from Defendant Siegelman's criminal behavior.

The offense conduct in this case demonstrates a sweeping corruption of Alabama State government at all levels, and particularly of the Office of Governor and Lieutenant Governor, and justifies an upward departure of four levels from the Guidelines range.

Reasoning as to defendant Richard Scrushy is outlined in two other government filings.  In the first filing the Government alleges systematic and pervasive corruption:

"COMES NOW the United States of America, ...and moves this Court to depart upwardly in the sentence of Defendant Scrushy. The United States so moves this Court because Defendant Scrushy's criminal activity is far outside the "heartland" of cases considered by the Guidelines. In particular, Defendant Scrushy's criminal conduct was part of a systematic and pervasive corruption of the office of Governor and the CON Board of the State of Alabama that may cause loss of public confidence in government. To support this Motion, the United States provides as follows:

I. This Court Should Upwardly Depart in the Sentence of Defendant Scrushy Because His Criminal Conduct Was Part of a Systematic and Pervasive Corruption of the Office of Governor and CON Board that Caused Loss of Public Confidence in Government.

The United States contends that an upward departure of two levels is warranted in this case under Section 5K2.0 because Defendant Scrushy's conduct "was part of a systematic or pervasive corruption of a governmental function, process, or office that may cause loss of public confidence in government." ...The evidence at trial established beyond a reasonable doubt that Defendants Siegelman and Scrushy executed a bribery agreement, a conspiracy, and an honest services fraud scheme that corrupted the office of Governor of the State of Alabama and the CON Board. The egregiousness and pervasiveness of this criminal activity may have certainly caused a loss of public confidence in government."

"...Defendants Siegelman and Scrushy utilized and abused their positions as Governor and a member of the CON Board, respectively, to organize, direct, and order other government officials, public employees, and private citizens to take actions to effectuate their criminal scheme. For example, after receiving the bribe from Defendant Scrushy, Defendant Siegelman ordered Bailey to contact Margie Sellers, Chairperson of the CON Board, and instruct her to have Defendant Scrushy named Vice-Chair of the CON Board. Further, Defendant Scrushy bribed Tim Adams, another CON Board member, so that Adams would act favorably as a CON Board member on HealthSouth matters."

"In addition, the Siegelman/Scrushy criminal activity involved numerous unwitting public officials and employees such as Raymond Bell and Josh Hayes, appointment secretaries under Defendant Siegelman, Alva Lambert, the administrative officer over the CON Board, and the other CON Board members who participated in HealthSouth matters without knowledge of the Siegelman/Scrushy criminal activity. The breadth and reach of this criminal activity across and up to the highest levels of State government may have caused a loss of public confidence in government and justifies an upward departure of two levels..."

"Scrushy not only abused his own political position as a CON Board member, but also corrupted the Office of Governor and the CON Board as a whole..."

"...Defendant Scrushy corrupted the highest executive office in State government, namely, the Governor, by purchasing from then-Governor Defendant Siegelman membership on, representation at, and influence over the CON Board...Defendant Scrushy's corrupt activities involved numerous public officials and employees and private citizens...Defendant Scrushy's corruption of the Office of Governor and the CON Board spanned at least four years and involved multiple projects before the CON Board. In addition, the amount of bribes paid by Defendant Scrushy was far greater than the bribe payments in Reyes."

"Moreover, his criminal behavior directly impinged on the provision of medical care to the citizens of Alabama, ...the widespread media coverage about this case demonstrates the Defendant Scrushy's corrupt activities may result in a loss of public confidence in government."

"...If any case can ever qualify for a departure to account for systematic and pervasive corruption, this is that case given the tremendously harmful effect upon public perception of and confidence in Alabama state government resulting from Defendant Scrushy's criminal behavior. The offense conduct in this case demonstrates a blatant and egregious corruption of Alabama State government, and particularly of the Office of Governor and the CON Board, and justifies an upward departure of two levels from the Guidelines range."

In the second filing asking for an upward departure from the sentencing guidelines, the government argues Scrushy abused a position of private trust:

"...Defendant Scrushy's criminal conduct constituted an abuse of a position of private trust that was not taken into consideration by the applicable sentencing guidelines and constitutes an aggravating factor justifying an upward departure. To support this Motion, the United States provides as follows:

I. This Court Should Upwardly Depart in the Sentence of Defendant Scrushy Because He Abused a Position of Private Trust as Chief Fiduciary of HealthSouth in Committing His Criminal Offenses.

The United States asserts that an upward departure of two levels is warranted in this case as to Defendant Scrushy because he abused a position of private trust in committing his crimes. Specifically, Guidelines § 3B1.3 does not fully account for the extraordinary situation present in this case, where each of the offenses of conviction inherently contain not only an abuse of public trust through corruption of Defendant Siegelman and his office, but a further, distinct abuse of private trust by Defendant Scrushy himself as the Chief Executive Officer and Chairman of the Board of HealthSouth."

"In particular, the testimony of Mike Martin and Bill McGahan showed that Defendant Scrushy used his "managerial discretion" over the financial relationship between HealthSouth and its investment bank, UBS, to coerce the concealed and disguised payment of $250,000 to Defendant Siegelman. By virtue of Defendant Scrushy's fiduciary positions placing him in command of HealthSouth's financial operations, he was able to turn the commercial value of HealthSouth's trade with UBS into a lever to extract half of the bribe paid to Defendant Siegelman from a third party, and was further able to do so by ordering subordinates to act for him and attempt to conceal his role."

"Defendant Scrushy's violation of private trust as the primary fiduciary of HealthSouth is an independent abuse of trust that is distinct from and in addition to the abuse of public trust for which Guidelines § 3B1.3 already accounts. In other words, the government expressly acknowledges that Guidelines § 3B1.3 states that the "adjustment may not be employed if an abuse of trust or skill is included in the base offense level or specific offense characteristic," and that the base offense level for each offense of conviction for Defendant Scrushy already addresses the abuse of public trust presented by this case. However, the further, different abuse of private trust by Defendant Scrushy is not addressed in either the base offense level or in any specific offense characteristic."

"Thus, pursuant to 18 U.S.C. § 3553(b) and Guidelines § 5K2.0 "there exists an aggravating ... factor of a kind, or to a degree, not adequately taken into consideration" by the Guidelines.  Moreover, this aggravating additional abuse of trust by Defendant Scrushy, as the single most important and powerful fiduciary of an enormous corporate entity wielding tremendous financial leverage over third parties, takes this case far from the heartland of public corruption cases addressed by Guidelines § 2C1.1. Accordingly, the government submits that a two level upward departure for Defendant Scrushy's abuse of a position of private trust is warranted..."

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