Bernard Ebbers told "lie after lie after lie" about the crumbling state of WorldCom in an obsessive drive to meet Wall Street expectations...
NEW YORK — Bernard Ebbers told “lie after lie after lie” about the crumbling state of WorldCom in an obsessive drive to meet Wall Street expectations and keep its stock price high, a federal prosecutor said yesterday.
In opening statements at Ebbers’ accounting-fraud trial, prosecutor David Anders told jurors that even when subordinates made clear the books were wrong, Ebbers repeatedly said in a near-mantra: “We have to hit the number.”
“It was a command to commit fraud,” Anders said, placing Ebbers directly responsible for what later was revealed as an $11 billion accounting fraud at WorldCom, driving the company into the largest bankruptcy in U.S. history.
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Ebbers’ defense lawyer presented a profoundly different story, hailing his client as a self-made corporate hero who never had an inkling of the massive fraud carried out by others on his watch.
Lawyer Reid Weingarten described Ebbers as the gusto behind WorldCom, a leader who gladly ceded the accounting reins to Scott Sullivan, his whiz-kid chief financial officer — and the government’s star witness against Ebbers.
“Bernie, he’s charisma and vision,” Weingarten told jurors. “If you’re interested in the numbers, you go to Scott Sullivan.”
The opening statements raised the curtain on one of the biggest white-collar trials spawned by the scandals that took down huge companies such as WorldCom, Enron, Tyco International and Adelphia Communications.
The case is before 10 women and six men who were chosen as jurors and alternates. The first 12 of them — six women and six men in all — are expected to be named jurors because of their numerical order in the jury box, with the remaining four as alternates.
Ebbers stands accused of fraud, conspiracy and making false regulatory filings — nine total counts that carry up to 85 years in prison. The trial is expected to last into March.
The opening statements suggested the trial may turn on the testimony of Sullivan, who pleaded guilty to fraud in 2002 and agreed to testify against his former boss.
Anders told jurors that Sullivan carried out the shady accounting at WorldCom at the clear direction of Ebbers, who wanted to keep profits high even as his company, and the economy in general, sagged from 2000 to 2002.
The prosecutor said Ebbers and Sullivan “constantly” talked about the company’s faltering finances, and that Sullivan told his boss the only way to fix the situation would be to make accounting entries they both knew were wrong.
Anders said that when two WorldCom accountants threatened to quit over what they were asked to do, Ebbers ran into WorldCom’s controller in a hallway and said: “I’m sorry. I’ll make sure it never happens again.”
“When people buy stock in a company, they purchase the right to be told the truth,” the prosecutor said. “Bernard Ebbers violated that trust. He violated that trust by directing this fraud, and then telling lie after lie after lie about how his company, WorldCom, was performing.”
But Weingarten stressed to jurors that Sullivan stands to win a lighter sentence if he cooperates with the government, and said they should reject his claim that “big, bad Bernie made me do it.”
Ebbers was simply “playing essentially the WorldCom cheerleader,” he said.
“It will be perfectly clear to you who knows the numbers and who the market looks to for the numbers.”
Weingarten told jurors the government’s case reminded him of “one of those well-crafted docudramas you see on television,” where inconvenient facts can simply be left out of the story.
He also portrayed Ebbers as unselfish, having given $100 million to charity between the mid-1990s and 2002 — without wanting any credit or “Bernie Ebbers gyms” or “Bernie Ebbers statues.”
Testimony is set to begin today.