Friday, July 8, 2005 | 9:21 a.m.
HealthSouth Corp. has rebuffed efforts by founder Richard Scrushy to return as chief executive since his June 28 acquittal on fraud charges. The reception he's getting from his Alabama neighbors is no less chilly.
"He wasn't welcome at the height of his power and fame, and he's certainly not now," says Vestavia Hills businessman Terry Argo, 54, while walking his dogs, one a Havanese, the other a Chinese Crested.
Scrushy, whose father installed cash registers for a living, was raised in Selma, a city best known as the starting point for three civil rights marches in 1965. His neighbors have long considered him an outsider in Birmingham's toniest suburbs -- Vestavia Hills, where he lives, and Mountain Brook, where his family shops. These are places where summer is a verb, Versace dinner plates are on wedding registries and the median family income is as high as $122,647, almost triple the U.S. average.
Seven men and five women acquitted Scrushy, 52, of charges that he directed a $2.7 billion accounting fraud at Birmingham-based HealthSouth, the largest U.S. operator of rehabilitation hospitals. After his trial, he vowed to fight management's plans to oust him from the board. He also wants to return as CEO.
Board Chairman Robert May said in a June 28 statement that HealthSouth is "appalled by the multibillion-dollar fraud that took place under Mr. Scrushy's management," which was terminated in March 2003. "Under no circumstances will Mr. Scrushy be offered any position within the company," May said.
Scrushy's struggle with HealthSouth may pale in comparison with any effort he may make to blend back in with his neighbors.
At the Mountain Brook Starbucks last week, where coffee was selling for $1.85 for a small cup, Scrushy-bashing was free and plentiful.
Lynn Renoll, 57, a lawyer, described his reaction to the Scrushy verdict as "utter disgust." Retired investment banker Rod Kendrick, 71, called it "an embarrassment."
Scrushy certainly has the trappings of wealth to blend in: He's worth more than $300 million, according to his lawyers and court documents. And then there are the mansions, yachts, racing boats and a Rolls Royce.
Scrushy's lawyer, Donald Watkins, says he knows why goodwill eludes his client in his own backyard.
"He's a self-made man," Watkins says. "In Mountain Brook the money is generational and they resent him. They never viewed him as a legitimate corporate leader because they didn't create him." The social elite who reject Scrushy are "sitting in envy," Watkins says.
"He built something that became No. 1 in the world, while we're used to being No. 1 in Alabama for illiteracy and infant mortality," Watkins says.
That explanation doesn't sit well with some town residents.
Kendrick, the former investment banker, says he and his seven-member Mountain Brook morning coffee klatch found distasteful Scrushy's public embrace of Christianity, complete with a daily devotional television show and a more than $1 million donation to a church. One man in Kendrick's group nodded in agreement while refusing to give his name because of a business transaction in the works with HealthSouth.
"He needs to ask himself what would Jesus do with all that money," Kendrick says of Scrushy.
Mountain Brook bookstore owner Charles Van Eaton, 55, says Scrushy's personal lavishness reminded him of the Oklahoma oil boom when oilmen would fly to lunch in New Orleans from Tulsa.
"Something seemed shady about it," Van Eaton says. "There was just something that didn't pass the smell test."
If history is any guide, Scrushy is in for a tough time back home, says Bill Bartmann, former chief executive of Commercial Financial Services Inc. who was acquitted in December 2003 of fraud charges stemming from the bankruptcy of his Tulsa-based company.
Bartmann, ranked with his wife as No. 287 on Forbes Magazine's 1998 list of wealthy Americans with $1.4 billion, said in a news release last week that his trial drove him into bankruptcy and people continue to think he's guilty.
"Some will think that he 'got off' because he was acquitted," Bartmann wrote of Scrushy. "In spite of a unanimous vote of innocence by 12 people who saw all of the evidence and heard all of the facts -- he and his family have suffered and will continue to suffer."
Bartmann predicts that Scrushy will never regain his company, his reputation or the years he spent defending himself.
"He will continue to pay for a crime he didn't commit for the rest of his life," Bartmann says.
Scrushy still faces a raft of civil suits by the U.S. Securities and Exchange Commission and investors who accuse him of securities fraud. He owes about $12 million in a loan repayment to HealthSouth under a Delaware Chancery Court ruling, according to Art Leach, another attorney for Scrushy.
Lawyer Watkins says Scrushy's only crime is being born of humble origins to a father, Gerald, who worked for National Cash Register Co., now NCR Corp., and died on June 20 while awaiting the verdict at his son's trial.
Some of Scrushy's neighbors say they also struggled to raise themselves up from a lowly economic position and profess no sympathy for him.
"I have a lot in common with Mr. Scrushy," says businessman Argo, who lives in Vestavia Hills and runs a designer jewelry store in Mountain Brook. "I was a redneck whose only ambition was to be a rich redneck. I don't put on airs. My Rolls Royce is in the garage."
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