NEW YORK, Feb. 17 -- Former WorldCom Inc. chief financial officer Scott D. Sullivan spent his final day in the witness chair Thursday fending off questions that implied he was willing to commit fraud rather than stand up to his former boss Bernard J. Ebbers.
Sullivan, 43, got hoarse and looked tense under the cross-examination by Ebbers's defense attorney Reid H. Weingarten, but he kept calm and stuck with his version of events: that he repeatedly told Ebbers he was booking "adjustments that weren't right" to improve the firm's bottom line and that Ebbers repeatedly replied that the firm had to "hit the numbers" that Wall Street analysts were expecting.
Former WorldCom finance chief Scott D. Sullivan repeated what he said was his boss's command to "hit the numbers."
(Gregory Bull -- AP)
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"Was there ever an occasion where you said, numbers be damned, I'm just not booking it?" Weingarten asked.
"No," Sullivan replied. "I went along with hitting the earnings-per-share number."
Weingarten pressed on: "Your desire to hit the numbers overtook your obligation to follow the law?"
"I knew it was wrong and I knew it was against the law, but I thought we were going to get through it in a short period of time," Sullivan said wearily. "I had no excuse for what I did."
Prosecutors contend Ebbers, 63, was the driver behind the scheme to inflate WorldCom's earnings from 2000 to 2002 by making unannounced changes to revenue accounting and hiding operating expenses by calling them capital investment. Ebbers's defense is that he was unaware of the fraud orchestrated by underlings, including Sullivan. Weingarten has suggested Sullivan's testimony was concocted to win him a lighter prison sentence.
Five former company executives including Sullivan already have pleaded guilty to fraud charges. Ebbers is charged with conspiring with them, committing securities fraud and filing false documents with the Securities and Exchange Commission.
But Weingarten, of Washington, and the rest of the defense team contend that Ebbers left the company's accounting to Sullivan, who masterminded the fraud and misled his boss. The defense used its day and a half of cross-examination to highlight Sullivan's history of lying, his possible motives for implicating Ebbers and the lack of corroborating evidence for Sullivan's version of events.
Sullivan has not identified any witnesses to the conversations in which he says he told Ebbers about the fraud, and there are no documents that directly link Ebbers to the company's decision to improperly reclassify operating expenses known as line costs as capital expenditures. Although Sullivan says he routinely initialed copies of the company's financial statements both before and after he made the adjustments and then gave them to Ebbers, the prosecution has not produced any of the "before" versions with either Sullivan's or Sullivan's assistant's handwriting on them. Nor has the government been able to show the jury a handwritten note that Sullivan says he sent Ebbers in fall 2000 protesting the accounting maneuvers.
