A federal judge agreed Tuesday to delay former WorldCom Inc. chief executive Bernard J. Ebbers's trial until January to give his lawyers more time to prepare his defense.
Ebbers, who has pleaded not guilty, is charged with conspiracy, securities fraud and making false Securities and Exchange Commission filings about the telecommunications giant's fiscal health. WorldCom collapsed in the nation's largest bankruptcy filing in June 2002 and has had to restate more than $11 billion. The company, based in Ashburn, now does business as MCI Inc.
Ebbers was slated for trial Nov. 9, but his lead attorney, Reid H. Weingarten, asked for a delay because the trial of another client, former Tyco International Ltd. general counsel Mark A. Belnick, ran long.
Over the objection of prosecutors, U.S. District Judge Barbara S. Jones set a new trial date of Jan. 17, though proceedings will probably start the next day because that date is Martin Luther King Day, a court holiday.
"I don't believe that counsel's mistake in terms of his ability to try this case . . . should be held against or cause Mr. Ebbers prejudice," the judge said.
But Jones ruled against several of the former WorldCom executive's efforts to get the charges against him dismissed, and she turned down his request to be tried in Mississippi, near his home there in Brookhaven.
Jones said she would have to think about Weingarten's request for access to sealed documents filed with the court by a lawyer for former WorldCom chief financial officer Scott D. Sullivan.
Sullivan, who has pleaded guilty, is expected to testify that he told Ebbers that company officials were falsifying WorldCom's accounting to pump up revenue and cut expenses. But before Sullivan cut a deal with prosecutors, his lawyer said in court that Sullivan believed WorldCom's accounting decisions were proper.
"It's a defense counsel's dream" to be able to ask a witness, " 'Are you lying now or did you perpetrate a fraud upon the court?' Are we to be deprived of the opportunity to cross-examine?" Weingarten asked.
But Sullivan's lawyer Irvin B. Nathan argued that the filings were protected by attorney-client privilege, and Jones declined to rule from the bench.
Ebbers also asked Jones to allow him more travel privileges while he is out on bond. Weingarten said his client wants to visit his daughter, who is in college in Tennessee, and his parents, who will celebrate their wedding anniversary in Edmonton, Alberta, on Wednesday.
"My dad has gone legally blind and my mother is losing her sight. I just hope to see them one last time while they can still see me," Ebbers said after the hearing. Jones said the defendant should submit specific trip requests to her.
Also Tuesday, another judge on the same court, Denise Cote, approved a settlement agreement in which Ebbers, MCI and its insurers will pay between $47.15 million and $51 million to compensate up to 50,000 WorldCom employees who lost billions of dollars in retirement accounts after the company filed for Chapter 11 bankruptcy reorganization.
The wildcard in the settlement, which was forged in July, is Ebbers, who will pay between $400,000 and $4 million depending on how much money he is required to spend repaying loans from MCI.
The settlement covers Ebbers and 18 other former WorldCom executives, but not Sullivan or the 401(k) plan's administrator, Merrill Lynch Trust Co.