Did Ex-Alabama Governor Get A Raw Deal?

Is Don Siegelman in prison because he's a criminal or because he belonged to the wrong political party in Alabama? Siegelman is the former governor of Alabama, and he was the most successful Democrat in that Republican state. But while he was governor, the U.S. Justice Department launched multiple investigations that went on year after year until, finally, a jury convicted Siegelman of bribery.

Now, many Democrats and Republicans have become suspicious of the Justice Department's motivations. As correspondent Scott Pelley reports, 52 former state attorneys-general have asked Congress to investigate whether the prosecution of Siegelman was pursued not because of a crime but because of politics.

"You tell us how you're going to pay for college scholarships. You tell us how you're going to put state of the art computers inside every school in this state," he said.

But now the applause has long faded. Today, Siegelman is at a federal prison camp in Louisiana. He's doing seven years. The main charge against him was that he took a bribe, giving a position on a state board to businessman Richard Scrushy, who had made a big donation to that lottery campaign. There was a star witness, Nick Bailey, a Siegelman aide who had a vivid story to tell.

"Mr. Bailey had indicated that there had been a meeting with Governor Siegelman and Mr. Scrushy, a private meeting in the Governor's office, just the two of them," says Doug Jones, who was one of Siegelman's lawyers. "And then, as soon as Mr. Scrushy left, the governor walked out with a $250,000 check that he said Scrushy have given him for the lottery foundation."

"Had the check in his hand right then and there? " Pelley asks.

"Had the check in his hand right then," Jones says.

"That Scrushy had just handed to him, according to Bailey's testimony?" Pelley asks.

"That's right, showed it to Mr. Bailey. And Nick asked him, 'Well, what does he want for it?' And Governor Siegelman allegedly said, 'A seat on the CON Board.' Nick asked him, 'Can we do that?' And he said, 'I think so,'" Jones says.

The CON board regulates hospital construction, and Scrushy ran a healthcare company. Both Siegelman and Scrushy were convicted in federal court.

But, as 60 Minutes found out, the imprisonment of Don Siegelman is not nearly as simple as that.

"I haven't seen a case with this many red flags on it that pointed towards a real injustice being done," says Grant Woods, the former Republican attorney general of Arizona.

Woods is one of the 52 former state attorneys-general, of both parties, who've asked Congress to investigate the Siegelman case.

"I personally believe that what happened here is that they targeted Don Siegelman because they could not beat him fair and square. This was a Republican state and he was the one Democrat they could never get rid of," Woods says.

Now a Republican lawyer from Alabama, Jill Simpson, has come forward to claim that the Siegelman prosecution was part of a five-year secret campaign to ruin the governor. Simpson told 60 Minutes she did what's called "opposition research" for the Republican party. She says during a meeting in 2001, Karl Rove, President Bush's senior political advisor, asked her to try to catch Siegelman cheating on his wife.

"Karl Rove asked you to take pictures of Siegelman?" Pelley asks.

"Yes," Simpson replies.

"In a compromising, sexual position with one of his aides," Pelley clarifies.

"Yes, if I could," Simpson says.

She says she spied on Siegelman for months but saw nothing. Even though she was working as a Republican campaign operative, Simpson says she wanted to talk to 60 Minutes because Siegelman's prison sentence bothers her conscience.

Simpson says she wasn't surprised that Rove made this request. Asked why not, she tells Pelley, "I had had other requests for intelligence before."

"From Karl Rove?" Pelley asks.

"Yes," Simpson says.

Rove was a strategist in Alabama. Simpson says she worked with him on several campaigns.

60 Minutes contacted Rove. Through his lawyer, he denied Simpson's allegations. One of Rove's close Alabama associates was Republican consultant Bill Canary. Simpson says she was on a conference call in 2002 when Canary told her she didn't have to do more intelligence work because, as Canary allegedly said, "My girls" can take care of Siegelman. Simpson says she asked "Who are your girls?"

"And he says, 'Oh, my wife, Leura. You know, she's the Middle District United States Attorney.' And he said, 'And then Alice Martin. She is the Northern District Attorney, and I've helped with her campaign,'" Simpson says.

"Federal prosecutors?" Pelley asks.

"Yes, Sir," she says.

Bill Canary denies the conversation ever happened. He told 60 Minutes he never tried to influence any government official in the case. His wife Leura Canary and Alice Martin are top federal prosecutors in the state. Both were appointed by President Bush, and their offices investigated Siegelman. Details of some of those investigations leaked to the press. And Siegelman lost his 2002 re-election campaign narrowly to Republican Bob Riley.

Two years later, as Siegelman geared up to run again, the Justice Department took one of its Siegelman investigations to trial-an indictment involving an alleged Medicaid scam.

"He's indicted. He goes to trial. That's a pretty big deal to have your former governor on trial. Everybody's there. The government gives their opening argument. The judge says, 'I want to see you in chambers because this case, there's no case here,'" Grant Woods says.

Woods says the judge threw the case out, without a witness testifying. "The case is so lame that he throws it out," he says.

Vindicated, Siegelman focused on winning the 2006 election. And that's when Jill Simpson says she heard the Justice Department was going to try again. She says she heard it from a former classmate and work associate Rob Riley, the son of the new Republican governor.

"Rob said that they had gotten wind that Don was going to run again," she says.

"And Rob Riley said what about that?" Pelley asks.

"They just couldn't have that happen," Simpson says.

Asked how they were going to prevent that from happening, she says, "Well, they had to re-indict him, is what Rob said."

Simpson told this same story, under oath, to Congressional investigators in a closed session. Rob Riley told 60 Minutes he never talked to Jill Simpson about this.

Four months after Simpson says they spoke, Siegelman was indicted on new charges. Doug Jones, Siegelman's lawyer, says one of the prosecutors told him that Justice Department headquarters in Washington had ordered a top to bottom review of the case. Today, the Alabama prosecutors deny that it was Washington - but whoever ordered it, there was a big boost to the investigation.

"They started over. People started getting subpoenas that had never gotten subpoenas before, for testimony, for records. The governor's brother, his bank records started getting subpoenaed. The net was cast much wider than had ever been cast before," Jones says.

"You know, on the other hand, what's wrong with the Department of Justice vigorously investigating a case if they think there is an indictment to be made on public corruption charges?" Pelley asks.

"Well, you still have to investigate crimes, not people. It undermines the entire system of justice because at that point anybody can be a target. Any prosecutor can look across the table and say, 'You know what? I just don't like you,'" Jones says.

The prosecution was handled by the office of U.S. Attorney Leura Canary, whose husband Bill Canary had run the campaign of Siegelman's opponent, Gov. Riley.

"Why would you do it that way?" Woods asks. "Why wouldn't you say, 'You know what? We're going to bring in someone from another jurisdiction to do it. There's a lot of United States attorneys around the country. We'll have somebody come in and do this case.' That's not what happened in Alabama. Every time they had the chance to go the extra mile to be independent and objective, they didn't do it."

Leura Canary handled the case for eight months. When defense attorneys objected, she turned it over to her assistants and says that she had nothing further to do with it.

In this new investigation, prosecutors zeroed in on that vivid story told by Siegelman's aide, Nick Bailey, who said he saw the governor with a check in his hand after meeting Richard Scrushy. Trouble was, Bailey was wrong about the check, and Siegelman's lawyer says prosecutors knew it.

"They got a copy of the check. And the check was cut days after that meeting. There was no way possible for Siegelman to have walked out of that meeting with a check in his hand," Jones explains.

"That would seem like a problem with the prosecution's case," Pelley remarks.

"It was a huge problem especially when you've got a guy who's credibility was going to be the lynch pin of that case. It was a huge problem," Jones says.

And there was another problem with the prosecutor's star witness: Nick Bailey was a crook. Unknown to Siegelman, Bailey had been extorting money from Alabama businessmen. Facing ten years in prison, Bailey agreed to cooperate with prosecutors to get a lighter sentence.

60 Minutes went to talk to Bailey. The Justice Department wouldn't let our cameras into the prison, but we met with him for hours.

Bailey told 60 Minutes that before the Siegelman trial, he spoke to prosecutors more than 70 times, and he admitted that during those conversations he had trouble remembering details. He told 60 Minutes the prosecutors were so frustrated, they made him write his proposed testimony over and over to get his story straight.

If Bailey's telling the truth, his notes, by law, should have been turned over to the defense. But Siegelman's lawyers tell 60 Minutes they never saw any such notes and never had a chance to show the jury just how much Bailey's story had changed.

No one at the Justice Department would be interviewed for this story, but they did send a statement which read, in part, "This case was brought by career prosecutors … based upon the law and the evidence alone. After considering that evidence … a jury of Mr. Siegelman's peers found him guilty beyond a reasonable doubt."

But Grant Woods, the former attorney general of Arizona, says the case should never have gone to trial. "The prosecutor's gotta look at it and say, 'Hey, is this the sort of thing that we're really talking about when we're talking about bribery?' Because what the public needs to know here is there is no allegation that Don Siegelman ever put one penny in his pocket," he says.

Richard Scrushy did make donations totaling $500,000 to that education lottery campaign, and after serving on the hospital board under three previous governors, Scrushy was re-appointed by Siegelman.

But Woods says that's politics, not bribery. "You do a bribery when someone has a real personal benefit. Not, 'Hey, I would like for you to help out on this project which I think is good for my state.' If you're going to start indicting people and putting them in prison for that, then you might as well just build nine or ten new federal prisons because that happens everyday in every statehouse, in every city council, and in the Congress of the United States," he says.

"What you seem to be saying here is that this is analogous to giving a great deal of money to a presidential campaign. And as a result, you become ambassador to Paris," Pelley remarks.

"Exactly. That's exactly right," Woods says.

Siegelman was campaigning in the 2006 Democratic primary as he went to trial. "We're going to turn this bus into what we call the night shift, because after the trial every day we're gonna be hittin the trail every day," he said.

But he lost in the primary. After two months, the jury deadlocked twice, then, voted to convict on its third deliberation. Many legal minds were shocked when federal judge Mark Fuller, at sentencing, sent Siegelman directly to prison without allowing the usual 45 days before reporting.

"He had him manacled around his legs like we do with crazed killers. And whisked off to prison just like that. Now what does that tell you? That tells you that this was personal. You would not do that to a former governor," Woods says.

"Would you do that to any white collar criminal?" Pelley asks.

"No, I haven't seen it done," Woods says.

"Help me understand something. You're blaming the Republican administration for this prosecution. You're saying it was a political prosecution. You are a Republican. How do I reconcile that?" Pelley asks.

"We're Americans first. And you got to call it as you see it. And you got to stand up for what's right in this country," Woods says.

Don Siegelman has six years and eight months to go on his sentence.