A House committee asked HealthSouth Corp. founder Richard Scrushy for records that congressional investigators believe the former chairman and CEO may have taken out of the company's Birmingham, Ala., headquarters. The Energy and Commerce Committee and its Subcommittee on Investigations and Oversight gave Scrushy until June 25 to turn over the documents. Their request includes: information about any offices outside of HealthSouth headquarters where Scrushy conducted company business, communications between Scrushy and employees of HealthSouth, its former auditor, Ernst & Young, and an investment bank, UBS Warburg. In addition, the subcommittee today approved a motion authorizing a subpoena requesting more documents from HealthSouth. Subcommittee Chairman Lee Greenwood (R-Pa.) said the company has been cooperating but was concerned that it might face legal liability for revealing patient information unless the records were subpoenaed.
The committee and its subcommittee are probing alleged accounting fraud that authorities contend inflated HealthSouth's profits, revenue and assets. Eleven former HealthSouth executives, including all five of the company's CFOs, have pleaded guilty in criminal proceedings. Scrushy has not been criminally charged, but he and HealthSouth were named in a civil complaint filed by the Securities and Exchange Commission in March. -- by Vince Galloro