Updated from 1:07 p.m.
Federal prosecutors wrapped up their summation Wednesday by honing the message that it was Bernie Ebbers who turned
If the pun was a bit labored, the point was clear as U.S. Attorney William Johnson offered up the government's closing argument. Rejecting Ebbers' defense that he was blithely unaware of problems at his struggling telco, prosecutors pinned the blame squarely on the former CEO. They said his losses on WorldCom stock made him obsessed with pleasing Wall Street -- and led the company into fraud.
"Money can corrupt, power can corrupt, and pressure can corrupt," Johnson told jurors in summarizing the case against Ebbers in U.S. District Court in Lower Manhattan. "But all three at one time is a perfect storm."
Ebbers' attorney, Reid Weingarten, is expected to present his closing remarks Thursday morning, meaning the jury could start deliberating later that day.
Throughout the monthlong trial, the prosecution has said Ebbers was the leader of a massive fraud that culminated with WorldCom seeking Chapter 11 protection in June 2002. The government has said Ebbers' personal financial straits -- his wealth was linked to the plunging value of WorldCom stock -- motivated him to falsify the company's accounting in a vain effort to keep the stock up.
The government's star witness was former financial chief Scott Sullivan, who testified that Ebbers had detailed knowledge of the company's condition and urged employees to meet financial targets at any cost. The defense has painted Ebbers as a victim of a scheme by an underling seeking to reduce his own sentence on fraud charges.
On Wednesday, Johnson repeatedly stressed to jurors that when business started getting weak in the summer of 2000, Ebbers became obsessed with hitting lofty financial targets that WorldCom couldn't legitimately meet. As sales spiraled down, Ebbers' constant refrain was "we have to hit the numbers," says Johnson referring to testimony from Sullivan and others such as former controller David Myers.
Facing financial ruin, Ebbers relied on Sullivan and others to smooth out sales shortfalls almost entirely through accounting tricks. This accounting fluff, as Sullivan referred to it in a voice mail, brought other company officials into the scheme, said Johnson. In order to avoid drawing more attention from auditors, the company started keeping two sets of books, he said.
Johnson pointedly recounted Myers' late January testimony about a late 2000 conversation with Ebbers in a hallway at WorldCom's offices. Myers testified that Ebbers pulled him aside to apologize after Myers was ordered to doctor expenses. "I'm sorry you were asked to do what you were asked to do," Myers said Ebbers told him. "It's something that you should not have been put in that position to do" and something Myers would "never have to do" again.
Johnson also counseled jurors not to be taken in by what he called Ebbers' "aw shucks" persona. While Sullivan was just following orders from an imperial CEO, Johnson contended, Ebbers "had the most to lose and the most to gain" from falsifying WorldCom's books.
Johnson later recounted how Ebbers' competitive streak became a key ingredient in the alleged book-cooking. Returning to WorldCom's late 2000 forecast of 13.5%-15.5% year-over-year quarterly revenue growth, Johnson noted that T. Rowe Price telecom guru Rob Gensler had called WorldCom a "tweener" in growth vs. value terms. Ebbers, enraged that his company wouldn't count as a growth stock, insisted on setting the high end of the range at 15.5% because Gensler's own definition of a growth stock demands 15% revenue growth.
For his part, the 63-year-old Ebbers seemed at ease Wednesday amid the hubbub. Appearing in a dark suit with a taupe shirt and gold silk necktie, he greeted various spectators and teasingly posed for the courtroom sketch artist.
Ebbers, who built WorldCom into a global telecom titan from a tiny Mississippi operation before the company plunged three years ago into bankruptcy, faces up to 85 years in jail if convicted on fraud, conspiracy and false filings charges. WorldCom emerged from bankruptcy last year as
and is trying to sell itself to
over the objections of
Johnson covered some familiar ground in making his closing argument Wednesday, at one point offering up the top 10 reasons to convict Ebbers.
"He was under pressure to pay back millions in loans," the prosecutor said of Ebbers. "The truth would have wiped him out, so he chose to cover up WorldCom's bad business with fraud."