SCRUSHY TRIAL UPDATE

A defense witness proved more useful to the prosecution in the corporate fraud trial of fired HealSouth Corp. CEO Richard Scrushy, providing some of the most damaging testimony to date with descriptions of Scrushy`s powerful management style. Former HealhSouth vice president Jim Whitten winked at Scrushy several times and glowingly described him as the brains behind an aggressive marketing machine. He said Wednesday, that Scrushy brainstormed ideas for TV programs and a magazine produced by HealthSouth, plus the company`s defunct "Go For It!" road show featuring appearances by pro athletes. "We wanted to create a branding for HealthSouth that was as well kown as Coca-Cola", said Whitten. Whitten also testified that Scrushy never demeaned employees, refuting claims by prosecution witnesses. But Whitten`s testimony about Scrushy`s expansive power in the company stood as a coup for prosecutors and a possible setback for the defense. He hesitantly admitted telling FBI agents during an interview that "nothing" went on at HealthSouth that Scrushy didn`t know about, potentially damaging defense claims that Scrushy wasn`t heavily involved in financial matters. "I felt like Richard was the boss. He was the CEO," said Whitten. Under cross-examination by prosecutor Richard Smith, Whitten also confirmed telling the FBI that Scrushy made incorrect statements about HealthSouth stock during a national cable TV appearance and at least once made fun of an employee during weekly meetings held on Mondays. Whitten testified that "Richard had a lot of power with the board of directors," but said he didn`t recall telling the FBI that Scrushy "led them by the nose", as indicated on an FBI synopsis of his statement. "I don`t recall the exact words. This was two years ago," Whitten said. Holding his hands in the air and looking sheepish, Whitten didn`t deny telling agents tht Scrushy let HealthSouth "take all the risk" in business ventures while he "took all the profit." Other defense testimoney was less mixed. Earlier Wednesday, U. S. District Judge Karon Bowdre dismissed a juror because of "external events" that could raise questions about impartiality. Bowdre emphatically stated that the juror had "not done anything wrong." Free on $10 million bond, Scrushy is the first CEO charged with violating the Sarbanes-Oxley corporate reporting law. He also is accused of conspiracy, fraud, money laundering and obstruction of justice. Scrushy could receive the equivalent of a life sentence and be ordered to forfeit some $278 million in mansions, cars, boats and othr assets if convicted.