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House Panel Receives Records From HealthSouth, Auditor

May 7, 2003 | AP

A House panel investigating the $2.5 billion accounting scandal ensnaring HealthSouth Corp. has received all the financial records it requested from the rehabilitation giant and its longtime auditor, a committee spokesman said Tuesday.

The House Energy and Commerce Committee is “pretty satisfied that we've gotten everything,†but staff won't be certain until they review the documents over the coming weeks, said Ken Johnson, a spokesman for panel chairman Rep. Billy Tauzin, R-La.

The committee, which last year investigated the wave of corporate scandals that began with Enron, also received the requested documents 43 boxes worth from HealthSouth's auditor, Ernst & Young, Johnson said.

With the Justice Department's criminal investigation of HealthSouth only begun in March, 11 former company executives already have pleaded guilty and entered into plea deals with the government.

While not charged with a crime, fired chief executive officer Richard M. Scrushy a prominent Alabama figure who built the company was accused in a lawsuit filed by the Securities and Exchange Commission of overstating corporate earnings to make it seem that the company was meeting Wall Street's forecasts. Scrushy has denied any wrongdoing.

His lawyers have said they expect him to be indicted, and a federal judge is considering whether to maintain a temporary freeze on his assets.

In civil charges, the SEC has accused Birmingham, Ala.-based HealthSouth of overstating earnings by $1.4 billion since 1999.

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