By Paul Thomasch
NEW YORK (Reuters) - Former WorldCom Inc. Chief Executive Bernard
Ebbers took the witness stand in his criminal trial on Monday and
flatly denied playing any role in the $11 billion accounting fraud
at the telecommunications company.
Ebbers, who faces up to 85 years in prison if convicted of fraud and
other charges in connection with the accounting scandal, told jurors
he would have put a stop to the fraud had he known about it.
Instead, he said, he was kept in the dark about any financial tricks
used by Chief Financial Officer Scott Sullivan to hide soaring
expenses or inflate revenues.
"He never told me he had made an entry that wasn't right," Ebbers, 63,
testified. "If he had, we wouldn't be here today."
The former basketball coach, milkman and bouncer said he had some
"general supervisory responsibility" for accounting, but was "not
involved in the actual conduct of the department."
Control of the department was left to Sullivan, Ebbers told a
Manhattan federal courtroom packed with press, spectators, and
supporters, including his wife.
"As I said before, I wasn't advised by Scott Sullivan of anything ever
being wrong with accounting at WorldCom."
As expected, Ebbers' testimony contradicted that of Sullivan, who
pleaded guilty to fraud and implicated his boss during earlier
testimony as the government's star witness.
Sullivan testified that he warned his boss that the only way the
company could meet its earnings projections would be to make
"adjustments" to the financial statements.
Ebbers repeatedly responded by telling Sullivan that "we have to hit
our numbers," according to the finance chief's testimony.
But no other witness has been able to directly link Ebbers to the
fraud, meaning the case will largely come down to whether jurors
believe Sullivan or Ebbers, who had been portrayed as an intimidating
and detail-oriented boss.
Ebbers, dressed in a blue suit and pale yellow tie, sought to present
a different view on Monday, speaking in detail about his teenage years
on a Navajo reservation, his five daughters, and his humble beginnings
in the telecommunications business.
At one point, he appeared confused by the page numbers on a document
introduced into evidence; at another he told jurors he'd donated more
than $100 million to charities; later he testified that he
considered retirement in 2001 when doctors said "your pumper isn't
pumping the way it should."
Speaking with a folksy style, Ebbers said his management style
reflected that of a coach, who motivated his staff "to play together"
like a team.
"I considered myself demanding," he said "I expected results. I
sometimes said things I shouldn't have said maybe," he testified.
Reid Weingarten, lead attorney for the defense, wrapped up his
questioning of Ebbers late Monday afternoon, after displaying evidence
that Ebbers purchased $5.3 million worth of WorldCom stock with
the last of his savings in May 2002, just weeks after he had been
forced to resign.
By June, investigators uncovered the accounting problems, and all of
Ebbers' stock -- including the shares he had just purchased --
eventually became worthless.
Asked why he bought more stock after his resignation, Ebbers said: "I
believed WorldCom was a great company."
He added that he felt "shock" when informed of the accounting
problem. "I never thought anything like that had gone on. I had no
earthly idea anything like that would occur."
After Weingarten's questions, Assistant U.S. Attorney David Anders
cross-examined Ebbers about his knowledge of accounting and his role
as the company's ultimate decision maker. Anders' cross-examination is
scheduled to continue on Tuesday.
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Lisa Minter (lisa_minter2001@yahoo.com)