On August 27, 2013 Judge Johnson, a Federal Judge in Birmingham Alabama, denied my request for a hearing to discuss with her the removal of the Director and Officer bar that I had agreed to in settling an action brought by the SEC against HealthSouth and me. That bar order gave me the opportunity to come back before the Judge after 5 years and ask her to remove the bar. We had hoped that the Judge would give us the opportunity to present witnesses and permit me to testify before her why the bar should be removed.
Among the Judge’s comments in denying my request were statements that I have not accepted any responsibility for the accounting fraud that occurred at HealthSouth and I have not shown any remorse for what happened at HealthSouth. I regret today that we did not include in the papers we filed with the Court the many statements that I have made publicly to the press and others as to my feelings about these matters. I have stated publicly many times that I accept full responsibility for the accounting fraud at the company. I was the CEO and it happened on my watch. It was my responsibility to oversee all aspects of the company. Today, as I speak to various groups of people, I always express the truism that as CEO the buck stopped with me. The Judge stated that I ignored my duty to monitor and duty to know what took place at HealthSouth. Perhaps she is right. Although HealthSouth had grown beyond my wildest expectations in the 12 plus years since I first founded the company, the accounting fraud occurred 2 or 3 floors below me in the same building where I had my office. I wish I had done more. I was so absorbed and concerned over so many other issues that had to do with building and growing the company. I should have paid more attention to the financial and accounting group and their reporting. Going forward, when I speak to groups about my experience in this matter, I will emphasize the need for senior corporate officers to “run and to focus on the core business as well as accounting and financial reporting” Shareholder values will come from a well-run business model.
Since I was not given the forum in Federal Court in which to express my remorse for what has happened, I will do so here. My personal pain runs deep. When I lie awake at night, the depth of my feelings towards anyone that may have been hurt is unfathomable. These include my fellow officers, the employees who had put their trust in me and the hundreds of shareholders, bondholders and pensioners who may have been harmed as well as my own family. Sometimes the pain is intolerable and I rise in the morning exhausted from personal self-examination and introspection. It pains me deeply that it happened. I blame no one but myself. I wish I could do something for all of them. God willing, one day I hope I can.
I wish we would have been able to explain to the Judge the plans we have for the future. Those plans include me continuing to speak all over the country about the role and duties of a CEO and the steps that might be taken to prevent these kinds of things from happening again in another company. I will continue to speak at colleges and universities to inform students how this can happen and how to prevent it. I believe I can take my experience and use it as a learning opportunity for the corporate world. I think that I owe this as a public service to the business community and to every young man and woman who has the American dream of building a great business or company. As I speak, I will discuss all the governance and compliance issues and the importance of working with auditors and financial and accounting leadership and audit staff to make sure everything is done properly. I believe that this should never happen again in this country.
I have accepted that this happened while I was at the head of the company and that it was on my watch. That means I must accept responsibility for it and I do. I am very sorry about what happened. I will now do everything I can in my lifetime to teach and speak and make myself available to the help others understand what happened while I was CEO or Chairman, why it did, and how others can prevent falling victim to the same mistakes I made and how they can prevent this from happening in their companies.