LOCAL ZEROES.(The Talk of the Town)(Richard Scrushy)

Three years ago, Richard Scrushy embodied the hoariest of American myths. He was the home-town boy made good, the scrappy local who went from the community college to the executive suite. His town was Birmingham, Alabama, and his company was HealthSouth, a medical giant beloved by Wall Street and central to Birmingham's economic well-being. Scrushy was eccentric--while serving as HealthSouth's C.E.O., he released a country-music record, sponsored a girl group, and co-hosted a bizarre talk show with the former child star Jason Hervey, from "The Wonder Years"--but he was also rich and famous. In Birmingham, the locals called him King Richard, and they were surrounded by Scrushy tributes: a life-size bronze statue outside the HealthSouth Medical Center, a Richard M. Scrushy Campus at Jefferson State Community College, a Richard M. Scrushy Parkway. But the kingdom rested on a foundation of lies. Between 1996 and 2002, HealthSouth overstated its profits by $2.7 billion, according to prosecutors. Seventeen of its executives have pleaded guilty to cooking the books. Scrushy, who is now on trial for his alleged role in the fraud, insists that he knew nothing about it, but that has made little difference. The statue and most of the nameplates are gone, and today Scrushy embodies another American tale: the local hero turned local zero.

As the key figures in the recent wave of corporate scandals--Bernie Ebbers, of WorldCom; John Rigas, of Adelphia; Kenneth Lay, of Enron; Scrushy himself--finally get their day in court, what's most striking is how similar their stories are. They all presided over companies that they essentially built from nothing. They all treated these companies as their own personal property. And they all came to be dominant figures in their home towns: Ebbers in Clinton, Mississippi; Rigas in Coudersport, Pennsylvania; Lay in Houston; and Scrushy in Birmingham. Some of these ponds are smaller than others, but in each instance the soon-to-be-disgraced C.E.O. was the biggest fish around.

In part, these C.E.O.s mattered so much simply because their companies did. Adelphia and the Rigas family accounted for nearly forty per cent of Coudersport's annual tax haul. HealthSouth employed thirty-five hundred people and, like Enron and WorldCom, turned many of its employees into millionaires, who, in turn, enriched the local merchants. Local people also invested heavily (and, for a time, happily) in the stock of these companies, and the towns benefitted from the publicity. Just as important, the bosses were active patrons who showered their largesse on their communities. (Ebbers even taught Sunday school and used his riding mower to trim his neighbors' lawns.) They were latter-day versions of George Pullman, the railroad-car magnate who in 1880 built an entire town for workers ...