Published January 13, 2015
Richard Scrushy (search), the founder and former chief executive of scandal-rocked HealthSouth Corp. (HSA), has subpoenaed CBS News journalist Mike Wallace (search) as a witness at his criminal trial later this month.
Wallace and CBS News producer Robert Anderson, who was also subpoenaed, have in turn filed a motion with Judge Karon Bowdre of the U.S. District Court for the Northern District of Alabama to have the subpoenas thrown out, according to court documents filed on Monday.
Scrushy faces a 58-count indictment on charges that include conspiracy to commit fraud, filing false financial statements, securities and wire fraud and money laundering at the Birmingham-based healthcare company he built into an industry leader.
He was interviewed for a segment of "60 Minutes (search)," a CBS news show, on the U.S. government's charges against Scrushy, which was rebroadcast last August. Now the government plans to show the jury the "60 Minutes" report, and Scrushy wants to question Wallace and Anderson about it, the documents said.
Wallace and Anderson want the subpoenas thrown out because "their only possible purpose is to compel the testimony of these journalists about their news-gathering efforts," testimony that is privileged by the First Amendment, they said in the document.
At the same time, the duo argued, "there is no possible knowledge these reporters have that goes directly to the heart of the defendant's guilt or innocence. Moreover, there are obvious alternative sources with knowledge about whatever the defendant might ask them," the documents continued.
The trial will provide the first major legal test of the new Sarbanes-Oxley (search) corporate reform laws, which were designed to hold high-ranking executives accountable for any false financial statements filed under their watch.
Prosecutors accuse Scrushy of directing a fraud in which they say company earnings and assets were inflated by some $2.6 billion over several years in order to manipulate share prices. Current HealthSouth executives estimate that false accounting was likely in excess of $4 billion.