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Ebbers's Attorney Blames Underlings

Jury Set to Begin Deliberations Today

By Brooke A. Masters
Washington Post Staff Writer
Friday, March 4, 2005; Page E01

NEW YORK, March 3 -- Former WorldCom Inc. chief executive Bernard J. Ebbers should not be convicted of securities fraud because the main evidence against him comes from underlings who masterminded the company's $11 billion fraud and now "want Bernie Ebbers to do their jail time," defense lawyer Reid H. Weingarten told the jury in closing arguments at Ebbers's trial.

"This man has committed no crimes," Weingarten said Thursday, pointing to where Ebbers, 63, sat quietly watching.


Former WorldCom chief executive Bernard J. Ebbers's attorney pointed to stock Ebbers bought after being ousted as evidence of innocence. (Chip East -- Reuters)

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Photo Gallery: Ebbers Through the Years
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For MCI Board, An Awkward Straddle (The Washington Post, Mar 4, 2005)
Bank Settles In WorldCom Class Action (The Washington Post, Mar 4, 2005)
Prosecution Says Ebbers Had Motive, Led Fraud (The Washington Post, Mar 3, 2005)
Story Archive and Company Background

Former WorldCom chief financial officer Scott D. Sullivan testified earlier in the five-week trial that Ebbers ordered him to hide operating expenses and make unannounced changes to revenue accounting to boost WorldCom's bottom line from 2000 to 2002. Prosecutors contend Ebbers was trying to prop up the company's stock to prevent banks from calling in $400 million in personal loans he had taken out using his WorldCom holdings.

But Ebbers said on the stand that Sullivan, who has pleaded guilty to fraud, kept him in the dark about his and controller David F. Myers's efforts to hide operating expenses known as line costs by falsely calling them capital expenditures.

"Bernie Ebbers had nothing whatever to do with the crime that Scott Sullivan committed," said Weingarten in a four-hour address in which he ticked off evidence supporting a not guilty verdict.

Prosecutors introduced no documents that directly tie Ebbers to the line-cost fraud, and Sullivan has said there are no witnesses to the conversations in which he allegedly told Ebbers he was making "adjustments that weren't right" to the company's books.

"Justice, not sympathy, does not allow a man to be convicted on the uncorroborated evidence of an unreliable source like Scott Sullivan," Weingarten said, noting that Sullivan said he lied on a federal security clearance form -- a crime -- to avoid the embarrassment of having to admit his cocaine use.

Weingarten referred to Myers, the only other witness to say he talked directly to Ebbers about the fraud, as Sullivan's "puppy dog" and noted that Myers's testimony conflicts with Sullivan and two other witnesses about the date of his alleged conversation with Ebbers. "Myers made that [conversation] up," Weingarten said.

Ebbers also demonstrated his innocence, Weingarten said, in the way he dealt with his investment in WorldCom. With the exception of a September 2000 sale forced on him by his bank, Ebbers never sold WorldCom stock, riding it down from a peak value of $1 billion to absolutely nothing. And, after he was forced out of the company in April 2002 but before the fraud was discovered, he used his remaining cash -- $5.3 million -- to buy more shares.

"Is it consistent with someone who knows the books are cooked to hang on to your stock?" Weingarten asked. "He bought more stock, and he never alerted his family that there was a thing wrong at WorldCom. This man did not have a clue."

In a nod to anti-corporate sentiment, Weingarten conceded that Ebbers shares some of the blame for the $11 billion fraud and WorldCom's decision to seek bankruptcy protection in July 2002, which cost investors billions of dollars. The company now does business as MCI Inc. of Ashburn.

"He was CEO. This happened on his watch. He put Scott Sullivan in a position to do what Scott Sullivan did," Weingarten told the jury. "But this is a criminal case, and he should not be convicted if he did not know about the line-cost adjustments."

Dropping his voice to a near whisper, Weingarten concluded, "I know you are going to do the right thing."

When time came for the government's rebuttal, Assistant U.S. Attorney David B. Anders countered that Ebbers, not Sullivan, was the liar and that jurors would have be naive to believe that Ebbers had no idea of the fraud, even though he -- as the largest shareholder -- was the principal beneficiary of efforts to prop up the stock price. Ebbers is charged with securities fraud, conspiracy and seven counts of making false filings to the Securities and Exchange Commission.

"The evidence has proven beyond a reasonable doubt that Bernard J. Ebbers, president and chief executive of WorldCom, is guilty beyond a reasonable doubt of participating in an enormous conspiracy to commit fraud, and he did it in a futile attempt to protect his personal fortune," Anders said.

U.S. District Judge Barbara S. Jones said she would charge the jury and send them to deliberate Friday.


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