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Ebbers: Bumpkin or Bully?

After of bombarding jurors with financial data, documents, and reports, the prosecution went for the human angle as they launched their summation in the fraud trial of ex-WorldCom CEO Bernie Ebbers today.

Assistant U.S. Attorney William Johnson, summarizing the government’s case against Ebbers, portrayed Ebbers as a man with an intimidating physical stature and fiery temper, who was pressed to desperate measures to resolve his own personal financial missteps.

The six-foot-plus former exec, who towered over most people in the courtroom, was described as “a forceful and dominating personality” who used his temper to intimidate employees.

”You can see how big Mr. Ebbers is,” Johnson told the court. This is in stark contrast to the genial portrait painted by defense attorney Reid Weingarten on Monday as former basketball coach Ebbers took the stand (see Ebbers: Of Motels & Men).

The company’s former CFO Scott Sullivan has already pleaded guilty in the case, and prosecutors, aided by Sullivan’s testimony, have spent the last few days attempting to prove to jurors that Ebbers was the prime mover behind the fraud.

But, in tense exchanges yesterday, the former WorldCom chief repeatedly denied any knowledge of what was happening, even when presented with information that data on the company’s line costs, or network expenses, had been adjusted to the tune of $2 billion.

Prosecutor David Anders struggled to make headway against Ebbers’s constant denials and lapses of memory, as the former exec continually distanced himself from the financial side of a business that he had built into one of the largest telecom firms in the world (see Ebbers Day II: 'Look After Pennies').

Developing a military analogy which he constantly referred back to, Johnson today depicted Ebbers as a general commanding his lieutenant Sullivan to commit fraud. “Ebbers took the witness stand and denied that he knew anything about this fraud,” said Johnson, describing this scenario as a “complete phenomenon.”

Johnson repeatedly urged jurors to question Ebbers’s personality. ”We all know money can corrupt, power can corrupt, pressure can corrupt,” he said. All three of these is like a perfect storm, he added.

The pressure cited by Johnson refers to Ebbers's massive personal debt, which later weighed on his and the company’s finances. The prosecution tried to show that Ebbers had been pressured to maintain WorldCom’s stock price in the face of mounting margin calls from banks looking to collect on his debt, which was collateralized by his WorldCom stock .

”The truth would have wiped him out financially,” says Johnson.

Even when set against against the backdrop of a telecom industry slump, the company’s fall from grace was nonetheless spectacular. Johnson explained that WorldCom fell from its position of industry leader in 1999 to that of a struggling company a few years later. “WorldCom had truly become WorldCon,” Johnson quipped. “Bernie Ebbers was the lead of WorldCom and the leader of that con.”

The attorney urged jurors to consider the impact of the accounting scandal on WorldCom shareholders and those whose pensions were tied up in the company’s finances when pondering Ebbers's fate. (WorldCom has since gone through bankruptcy restructuring and is now MCI.)

Describing Ebbers's constant denials and lapses of memory, Johnson told jurors that Ebbers was treating them the same way he treated WorldCom shareholders. "The 'aw, shucks' defense insults your intelligence," he said.

— James Rogers, Site Editor, Next-Gen Data Center Forum

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