After you quit, did you ever talk to your successors about the fraud?
I never really had any conversations with them. I moved 250 miles away. Occasionally I’d be in Birmingham and I would run into somebody and they would always say, “You left at a good time.” By 2003 I was living under the assumption that the fraud had ceased and everything was OK. It was a huge surprise to me when it was reported that the fraud had continued for all those years. I was amazed that it had gone on that long — I didn’t think it could.
Weston Smith finally blew the whistle. Do you regret not having done so yourself?
The correct thing I should have done was, at the critical point when we weren’t going to make our numbers, I should have said no [to any illegal actions]. If I got fired, I got fired. Once you actually commit fraud and have blood on your hands, getting out of the trap is very difficult.
Today you travel to business schools and talk to students about your experience at HealthSouth. What do you hope to accomplish?
I’m trying to turn a big negative into a positive, because there is such a need for ethics in the business world today, and I’m in a unique position to talk about it. If we can teach college students that they’re going to face these kinds of temptations every day in the business world, we can make a difference.
Some people ask, Can you really teach ethics? I’ve been using the example of the pilot [Chesley Sullenberger] who landed the plane in the Hudson River [in January]. He was able to do it because he had trained all his life how to do it. It was almost instinctive. When you’re faced with the decision whether to commit fraud or not, you are in a crisis. And if you have ethical training to fall back on, it will help you in that situation. If we start pointing out to students that there are people out there who will push you to commit fraud, that there are tremendous pressures on finance managers to do things that are inappropriate, then hopefully the day they’re in that situation they will do the right thing.
Do you think your presentations are effective?
I’m told by professors who are trying to teach ethics that they are effective. I hope they are. One thing I stress is to look beyond executive rhetoric and try to understand the true nature of a company’s culture. If you get a feeling that something isn’t right, it may not be.
What kinds of questions do students ask?
I get a lot of questions about Sarbanes-Oxley. Do I think it will prevent these kinds of things? I believe that Sarbanes-Oxley is what made Weston Smith blow the whistle. He had [moved up to CFO], and the counsel for the company, who didn’t know about the fraud, explained to him what Sarbanes-Oxley meant.
What’s life like for you now?
It’s actually pretty good, even though I basically have no wealth now. I’m just back to being an ordinary guy. I went back to college and took a two-year certificate program in turf management. I have a lawn-service business — it’s one man and a lawn mower. I’m cutting grass and doing public speaking and working on a book about my experiences.
Are you at peace with yourself?
I am. My marriage survived through it all. People seem to respect what I’m doing in my speaking. It’s sad, though, and I tell people this: I was a founder of one of the most successful health-care companies in the history of the United States. Today HealthSouth is trading on the New York Stock Exchange and doing well. But I won’t be remembered for that. I will be remembered as one of the guys who committed the fraud. That hurts, and it hurt my family a lot. But, you know, you heal over time, and I’m OK today.