Ebbers' Lawyer Slams Sullivan - TheStreet

Updated from 11:50 a.m.

Bernie Ebbers' lawyer said Thursday that the government's evidence against the former

WorldCom

chief came from "highly impeachable" sources.

The lawyer, Reid Weingarten, said former WorldCom financial chief Scott Sullivan and ex-controller David Myers, both of whom testified against Ebbers earlier in the trial, had ample motivation to frame their boss for their own misdeeds. But he said that blame for "98% of this fraud" could be laid at the feet of Sullivan, whom Weingarten called the "linchpin" of the wrongdoing.

Weingarten paid particular attention to a profit-boosting accounting maneuver in which the costs of phone lines are capitalized rather than expensed, as is required by generally accepted accounting practices. Weingarten likened this form of fraud to cocaine and said Sullivan found it "addictive." Weingarten said Sullivan lied throughout the trial, rendering his testimony worthless.

Weingarten made the comments during his closing argument in Ebbers' securities fraud trial in U.S. District Court in Lower Manhattan. He wrapped up his summation and prosecutors offered a brief rebuttal, and Judge Barbara Jones said she'd instruct the jury on matters of law Friday morning before the jury begins deliberating.

Weingarten offered up a dramatic performance in which he spoke to jurors at first in soft-spoken, almost incredulous tones as he recounted his disbelief at the charges against Ebbers, then became increasingly forceful. The charges could bring Ebbers as much as 85 years in jail if he is convicted.

"This man has committed no crimes," Weingarten said. He reiterated a component of the defense that emerged Monday when Ebbers took the stand: that Ebbers was a strong CEO who nonetheless failed to exercise oversight of the financial aspects of his company.

"You don't build the second-largest telecommunications company in the world being a moron," Weingarten told the jury. "But that doesn't make you a sophisticated financial analyst."

He said the prosecution's central contention -- that Ebbers cooked the books to keep Wall Street happy -- also made no sense in light of WorldCom's poor financial record toward the end of Ebbers' reign.

The company warned five times of quarterly shortfalls during that period, Weingarten said, noting that WorldCom stock suffered a disastrous plunge as a result. He said that fact undermines the government's claim that Ebbers was motivated to force workers to cook the books.

Instead, as he has throughout the trial, Weingarten pointed to several prosecution witnesses as the source of the $11 billion fraud, which pushed the nation's No. 2 long-distance service provider into Chapter 11 protection in June 2002. WorldCom emerged from bankruptcy last year as

MCI

(MCIP)

and is trying to sell itself to

Verizon

(VZ) - Get Report

over the objections of

Qwest

(Q)

.

Weingarten was scathing in his account of Myers, whom he called "a master obstructor" as he carried out book-cooking tasks assigned by Sullivan. Myers is facing 20 years in prison on his guilty plea, Weingarten said, and "he wants Bernie Ebbers to do his time."

But he saved his most vitriolic attacks for Sullivan, accusing him of lying to reduce his jail term and of pushing Myers to make incorrect accounting entries.

By contrast, Ebbers "is a man who obviously understands this business, but he's also a man who delegated a tremendous number of tasks to others," Weingarten told the jury, simultaneously taking a shot at the credibility of Myers and Sullivan and rejecting Wednesday's prosecution criticism of Ebbers' defense. "This is no aw shucks defense."

"Obviously, he was the CEO," Weingarten continued. "He put Sullivan in position to do what he did, and in that sense he is responsible.

"But he should not be convicted if he believed in good faith that revenue adjustments were proper," Weingarten argued.