The star witness against former WorldCom chief Bernard Ebbers was grilled by a defense lawyer yesterday about lies he told over and over...
NEW YORK — The star witness against former WorldCom chief Bernard Ebbers was grilled by a defense lawyer yesterday about lies he told over and over to investors, his own board of directors and the U.S. government.
In cross-examining Scott Sullivan, who was finance chief under Ebbers, defense lawyer Reid Weingarten appeared to be trying to paint him as a master of deception with a wizardly command of accounting.
Sullivan testified last week that Ebbers pressured him to carry out the improper accounting at WorldCom — a fraud that eventually totaled $11 billion and drove the company into bankruptcy.
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On cross-examination, Sullivan said he deliberately misled WorldCom’s board in 2002 by trying to defend baseless accounting entries that covered up the company’s expenses.
Asking about a meeting with WorldCom’s audit committee, Weingarten said: “If you believe something is in your interest, you are willing and able to lie to accomplish it, isn’t that right?”
Sullivan answered, “On that date, yes. I was lying.”
Weingarten continued: “So you looked those 12 people in the eye and you lied your head off?” U.S. District Judge Barbara Jones interjected before Sullivan could respond, saying, “All right, Mr. Weingarten.”
Weingarten took on Sullivan’s central claim that Ebbers was commanding him to cook the books when he said each quarter that WorldCom had to “hit our number,” referring to Wall Street estimates.
“You took that, Scott Sullivan took that, as a marching order to go out and commit fraud?” the lawyer asked.
“I took that as an order to make adjustments and hit the earnings-per-share number,” Sullivan answered.
The defense played for jurors a videotape of a 2000 conference with market analysts in which Sullivan projected up to 15 percent revenue growth for WorldCom in 2001 — numbers he said he knew were far too optimistic.
Weingarten also quizzed Sullivan about leaving his history of drug use off a security clearance form he filled out in 2000, when WorldCom was doing contract work for the government.
Sullivan said, somewhat sheepishly, “I was not truthful. I didn’t want to deal with the embarrassment of the drug usage.”
The cross-examination represents a crucial moment in the trial because Sullivan is the only witness to directly link Ebbers to the massive fraud at WorldCom.
Sullivan, 43, has already pleaded guilty to fraud in the case and hopes to win a lighter sentence for cooperating with the government. The defense aims to show Sullivan is willing to tell the government what it wants to hear.
Another key element of the defense’s argument is that only Sullivan had the accounting know-how to execute the huge fraud. The defense claims Ebbers was more of a visionary, leaving the numbers to Sullivan.
Weingarten also had Sullivan tell jurors of his compensation — he once earned a $10 million bonus — and of a $15 million Florida home Sullivan is building. Sullivan said the home is being sold with the proceeds to go to the government.
Ebbers, 63, is charged with fraud, conspiracy and filing false statements with the Securities and Exchange Commission. Those charges carry up to 85 years in prison.
Sullivan is to be sentenced after Ebbers’ trial.