United States v. Siegelman

In 1998, Don Siegelman (defendant) was elected governor of Alabama. Following his election, a lobbyist for HealthSouth Corporation, a major hospital system that operated throughout Alabama, met with Siegelman on behalf of the chief executive officer (CEO) Richard Scrushy. Scrushy had served on the Alabama Certificate of Need Review Board (CON Board) during the three previous governorships and hoped to remain on the board. The CON Board was responsible for approving healthcare applications, which was necessary before a health facility could be established in Alabama. As a member of the CON Board, Scrushy had authority to vote to reject applications that could create competition with HealthSouth. Siegelman informed the lobbyist that because Scrushy had contributed to his opponent’s campaign, Scrushy would need to donate $500,000 to Siegelman’s Alabama Education Lottery Foundation campaign. Scrushy instructed one of the company’s investment bankers to make the contribution. The banker was concerned with the optics of providing such a large contribution and instructed Integrated Health Services of Maryland (IHS) to make the donation in exchange for HealthSouth reducing the amount of money IHS owed the corporation. IHS agreed to the deal and donated $250,000. One week later, Siegelman appointed Scrushy to the CON Board. Siegelman then issued a check by HealthSouth for $250,000 to the Alabama Education Lottery Foundation. Siegelman and Scrushy were indicted and charged with federal-fund bribery, honest-services conspiracy, and honest-services mail fraud.