WorldCom's Ebbers Convicted

Bernard Ebbers, 63, and his wife, Kristie, exit a federal courthouse in New York after a jury returned guilty verdicts on all counts against the former WorldCom chief executive. (Gregory Bull - AP)

Prosecutors left the courtroom without commenting. Later, Attorney General Alberto R. Gonzales issued a statement saying, "Today's verdict is a triumph of our legal system and the application of our nation's laws against those who breach them. We are satisfied the jury saw what we did in this case: that fraud at WorldCom extended from the middle-management levels of this company, all the way to its top executive."

Juror Vincent Wright, 52, a Manhattan bus driver, said he personally concluded "three things" about Ebbers after hearing the case against him: "He was either incredibly stupid, incredibly naive or incredibly smart, and he's not stupid. Naive, maybe. The company was having problems, and he just didn't want to see it go down. It was his baby."

The government had contended that Ebbers orchestrated a scheme to boost WorldCom's share price because he was trying to protect his personal fortune -- once valued at $1 billion -- from banks that were calling in his loans as the company's stock fell. Assistant U.S. Attorney William F. Johnson referred to the fraud as a "perfect storm of corruption" combining money, power and personal pressure on Ebbers.

Ebbers's former lieutenant, Scott D. Sullivan, WorldCom's ousted finance chief, testified that he personally had informed Ebbers that he was taking improper "shortcuts to earnings" and making "adjustments that weren't right" to the way the company booked revenue and operating expenses known as line costs. In these private conversations, Sullivan said, Ebbers ordered him to commit the fraud by insisting that the company had to "hit the numbers" Wall Street was expecting for revenue and earnings.

Three lower-level WorldCom executives, who like Sullivan have pleaded guilty to fraud, explained how they had secretly reclassified more than $2 billion in line costs -- fees paid to other carriers for use of their networks -- as capital expenditures. A voice mail from Sullivan to Ebbers and a memo written by Ebbers both strongly suggested that he was aware the company was including "accounting fluff" and "one time events" in its revenue numbers. Other employees of WorldCom and its successor, MCI Inc. of Ashburn, testified that Ebbers had an eagle eye for cutting costs -- down to small items such as bottled water and the company's coffee service -- and closely studied WorldCom budget documents.

But Ebbers took the stand and denied that Sullivan had ever told him that anything illegal was going on. Weingarten, Ebbers's attorney, contended that Sullivan had masterminded the line cost scheme and was falsely accusing Ebbers to cut his own prison time. Prosecutors introduced no documents that directly linked Ebbers to the line cost fraud and only one conversation with anyone other than Sullivan. Ebbers also contended that he trusted Sullivan to make sure that the company reported its revenue and expense accounting properly.

"This man has committed no crimes," Weingarten argued to the jury.

Juror Wright said the panel agreed within the first few days that Ebbers had committed securities fraud, and he said it was "easy" to convict Ebbers of the seven false-filing charges. But the group split eight to four on the conspiracy charge, with Wright and three others arguing for acquittal.

The problem, Wright said, was that "most jurors did not believe Scott Sullivan" and without his testimony there was little direct evidence that Ebbers had conspired with other WorldCom officials to carry out the fraud. On Monday, the jurors constructed a timeline that ultimately convinced Wright and the other holdouts that Ebbers and the other WorldCom officials were working toward the same fraudulent goal, Wright said.

The other jurors sent word through U.S. District Judge Barbara S. Jones that they did not want to comment. The panel members came mostly from blue-collar walks of life in Manhattan, the Bronx and the northern suburbs of New York City, a long way from Edmonton, Canada, where Ebbers was born and attended high school, and Mississippi, where he built WorldCom into a force to be reckoned with.

Jones thanked the jurors and set sentencing for June 13.

How much time Ebbers may serve is somewhat unclear because the U.S. Supreme Court recently declared federal sentencing guidelines unconstitutional but said judges could use them as a guide. If the guidelines were in force, Ebbers would probably receive at least 25 years, with a possible increase if Jones decides he lied on the stand. But she could also give him reductions for his personal situation -- he has a heart condition and has made more than $100 million in charitable gifts -- or opt not to use the guidelines at all.

Staff writer Ben White and staff researcher Richard Drezen contributed to this report.