- The Washington Times - Wednesday, March 2, 2005

NEW YORK (AP) — Money, power and pressure combined to form a “perfect storm of corruption” that led former WorldCom Inc. chief Bernard Ebbers to commit an enormous fraud, a federal prosecutor said yesterday in closing arguments.

Mr. Ebbers’ testimony that he was unfamiliar with finance and accounting is little more than a deceitful effort to avoid punishment — an “aw-shucks defense,” prosecutor William Johnson told jurors.

“He lied right to your face,” Mr. Johnson said. “The aw-shucks defense insults your intelligence. You know better.”

Judge Barbara Jones said the defense would present its closing argument this morning, and then jurors can begin deliberations in the afternoon.

The prosecutor portrayed Mr. Ebbers, 63, yesterday as a hard-nosed, temperamental manager who became the commanding general of an “army of fraud” at WorldCom. Five other executives have pleaded guilty in the $11 billion accounting scandal.

Only Mr. Ebbers had the greatest motive to fool shareholders, and the most to lose — including $400 million in personal loans backed by WorldCom stock — if the company’s true, sagging finances became public, Mr. Johnson said.

“He was WorldCom, and WorldCom was Ebbers,” the prosecutor told jurors. “He built the company. He ran it. Of course he directed this fraud.”

Mr. Ebbers, who is charged with fraud, conspiracy and false regulatory filings, took the witness stand earlier this week and denied any knowledge of the fraud that took place on his watch.

He refuted testimony by former WorldCom finance chief Scott Sullivan, the star prosecution witness, who said Mr. Ebbers pressured him into committing fraud by insisting the company had to “hit our numbers,” meaning please Wall Street.

“He’s never told me he made an entry that wasn’t right,” Mr. Ebbers told jurors. “If he had, we wouldn’t be here today.”

Yesterday, the prosecutor said that, while Mr. Sullivan took part in the fraud “with his eyes open,” Mr. Ebbers was the one facing margin calls on his personal loans while WorldCom’s stock slid.

“We all know that money can corrupt people,” Mr. Johnson said. “We all know that power can corrupt people. We all know that pressure can corrupt people. Any one of these things is enough.”

“All three at once,” he continued, “is like the perfect storm of corruption. Money, power and pressure corrupted Bernard J. Ebbers to commit fraud on a billion-dollar scale.”

The prosecutor offered jurors a “top 10” list of reasons why they should find Mr. Ebbers guilty. At the top was the testimony of Mr. Sullivan, the only witness to say Mr. Ebbers ordered the fraud.

The defense hammered away at Mr. Sullivan during the trial, highlighting his prior use of cocaine and marijuana and his admitted past lies about the fraud. Mr. Johnson reminded jurors they are not required to like the witness.

“You may frankly be appalled at what Scott Sullivan did,” he said. “All you’re being asked to do is believe him.”

Mr. Johnson spoke for 3 hours.

The defense rested its case earlier yesterday after calling four witnesses over five days of testimony, none more important than Mr. Ebbers, who testified he only learned about the massive fraud after he resigned from WorldCom in 2002.

In a daylong cross-examination Tuesday, Mr. Ebbers insisted to federal prosecutor David Anders that he was not aware of the adjustments being made each quarter from late 2000 to early 2002.

When shown a report with a similar gap for the first quarter of 2001, Mr. Ebbers said he probably just tossed it in the trash — probably because it did not compare the results with the company’s budget.

“So it’s your testimony,” Mr. Anders said at the end of the day, “that WorldCom reduced its line costs through adjustments of more than $2 billion — and you had no idea?”

“That’s correct,” Mr. Ebbers said.

The charges against Mr. Ebbers carry up to 85 years in prison.

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times is switching its third-party commenting system from Disqus to Spot.IM. You will need to either create an account with Spot.im or if you wish to use your Disqus account look under the Conversation for the link "Have a Disqus Account?". Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide