Ebbers Trial: Sex, Drugs & Numbers
Who's really to blame for WorldCom's downfall? The pencil pushers or the charismatic country coach?
At the trial of former WorldCom CEO Bernie Ebbers in New York today, Ebbers’s attorney Reid Weingarten warned jurors that: “This case isn’t about sex, drugs, and rock 'n' roll -- it is about financial records that you have to slog through.”
Thanks, Reid. This comes as a bit of an understatement. Jurors have been bombarded with a blizzard of financial data over the last few days, although it looks as if the case could ultimately rest on the personalities of those involved.
Just as the Feds did yesterday when they painted Ebbers as a calculating tyrant, so Weingarten did a hatchet job on the Government’s two star witnesses, former WorldCom CFO Scott Sullivan and the telecom firm’s one-time controller, David Myers (see Ebbers: Bumpkin or Bully?).
Sullivan and Myers have already pleaded guilty in the case, and prosecutors, aided by their testimony, have spent the last few days attempting to prove to jurors that Ebbers was the prime mover behind the fraud.
But Weingarten has constantly argued that Ebbers was unaware of what was going on, and today he claimed that the “brilliant” Sullivan and his “henchman” Myers built up a web of intrigue to cook the company’s books (see Ebbers: Of Motels & Men).
Sullivan was, Weingarten told jurors, probably one of the most hireable CFOs in the industry, but also a liar who made the accounting decisions in the case: “He had an enormous power, enormous credibility, and enormous prestige.”
Clearly looking to counter the prosecution’s attack on Ebbers, the attorney went on to explain that many of WorldCom’s accountants were “mesmerized” by Sullivan, adding that: “He was tough, he was not a weakling that Bernie Ebbers put down.”
Weingarten went on to describe Myers, who has figured as an important witness in the case, as “Scott’s guy,” adding: “He was as obedient and sycophantic to Sullivan as a puppy dog.”
The attorney also poured scorn on Myers’s testimony concerning a conversation with Ebbers, which appeared to implicate the former CEO in the accounting scandal. “Myers made that up, he made that up,” in an attempt to curry favor with the Government to avoid a long prison sentence, Weingarten told jurors. “He wants Bernie Ebbers to do his jail time.”
Ebbers’s stock options have been a major theme of the trial, with prosecutors attempting to depict him as a desperate man crushed by personal debt (see Ebbers Day II: 'Look After Pennies').
But Weingarten today pointed to the fact that Ebbers kept hold of his stock as evidence of his innocence. ”When you look at Bernie’s stock you can come to no other conclusion than that he had no part in cooking the books. The evidence doesn’t add up to a guy who, at this stage of his career, is looking to commit fraud.”
The defense attorney even had an explanation for the lapses of memory that have appeared to dog Ebbers throughout the trial. “When you’re 63, there are some issues with memory.”
In the government's final rebuttal, prosecutor David Anders once again took up the issue of Ebbers's WorldCom stock. Ebbers, he claimed, was hanging onto the stock in hopes that the market would rebound and he could pay off some of his huge debts.
"His only escape from this situation was to get the stock price to go up -- that's his motive for fraud," Anders told the court.
— James Rogers, Site Editor, Next-Gen Data Center Forum, and Dan Jones, Site Editor, Unstrung