TOPICS > Economy

Called to Account

February 28, 2005 at 12:00 AM EDT


TERENCE SMITH: In a surprising and potentially risky move, the defense decided today to let Bernard Ebbers testify on his own behalf. Ebbers is being tried in federal court on charges that he orchestrated an $11 billion accounting fraud to disguise the financial health of the telecommunications giant WorldCom before it collapsed in 2002. Ebbers denied those charges today.

For more on what happened today, I’m joined by Ken Belson who was in the courtroom covering the story for The New York Times. Ken, thank you for joining us.

KEN BELSON: Thank you.

TERENCE SMITH: What, in essence, did Bernard Ebbers say today in his own defense?

KEN BELSON: Well, somewhat predictably, he confronted the allegations head on. He said that no chief financial officer at the company had ever told him anything was wrong. Meetings that supposedly occurred according to some of the other witnesses, he claims he had no recollection of and basically said that as far as he was concerned, there was no financial monkey business going on, on the company’s balance sheet.

TERENCE SMITH: So he directly contradicted the earlier testimony of the prosecution’s star witness, Scott Sullivan, the chief financial officer. So does this now leave it as he said-he said?

KEN BELSON: Absolutely. And I think this was an effective display because almost everything that Scott Sullivan or the government asked Scott Sullivan about, his meetings with Mr. Ebbers, Mr. Ebbers rebutted straight on. So I think the jurors will be left with a he said-he said scenario.

The defense also asked him quite a bit to humanize him, to put a little softer face on Mr. Ebbers asking him about his money he gave away to charity, the businesses, local businesses that he helped, taking some of the edge off some of the earlier testimony that portrayed him as a nit-picker and a bit of a tyrant.

TERENCE SMITH: And did that seem to be well received by the jury, could you tell?

KEN BELSON: I think so. Most of them had their seats turned directly to him. They sit at a 90-degree angle to him typically, to the witnesses, but most turned their seats at an angle to see what he had to say. I would say most of the jurors were fairly thoughtful, looked as if they were listening intently.

Mr. Ebbers, he is well known as a good salesman, I think put on a good show. He was in earnest or appeared in earnest. He spoke slowly and comfortably, used a lot of folksy language about himself and he was also very self-effacing.

TERENCE SMITH: I gather he also suggested that he was not all that familiar with the accounting rules and procedures and even the technology. I wonder, is that so?

KEN BELSON: Yeah, it was somewhat of a startling admission. He basically said I didn’t know very much about technology and "I didn’t know much about accounting. What I knew about was sales and marketing and that’s where I put my energy, and to get people to take care of the other stuff, I hired competent accountants and competent engineers."

But to hear it from a CEO, somebody who built a company that was worth at its peak over $150 billion, to say he really didn’t know much about technology, seems to be somewhat of a contrast with how he was portrayed years ago.

TERENCE SMITH: Did that seem credible to the jury, particularly the contrast, as you say, between one of the most powerful executives in the country and the portrait he painted today?

KEN BELSON: I think it went a long way to softening some of the images of him. I’m not sure they’re 100 percent convinced, of course, I can’t speak for them. But I think it was effective to hear from him directly because he’s been sitting at the defense table for six weeks now basically scribbling on a notepad, and he’s been talked about in front of the jury for so long. So to hear it from his words I think was an effective display.

TERENCE SMITH: Now, if you have these two conflicting accounts, that of Mr. Ebbers and that of Mr. Sullivan, has either the prosecution or the defense corroborated either account with evidence of any kind?

KEN BELSON: Absolutely not. Basically, the prosecution has relied on what Mr. Sullivan said, that he went into Mr. Ebbers’ office and asked him about some of the accounting frauds, some of the elements of it and Mr. Ebbers said go ahead, do what you have to do, essentially. And Mr. Ebbers is just basically said those meetings never occurred.

I think the jury will have to believe which of the two witnesses tells a better story. It is not easy to decide without that. Now of course the prosecution has some chances to still introduce some evidence, maybe some e-mails, introduce other witnesses that we haven’t heard from before, but my gut is that they basically have introduced as much evidence as they probably can already.

TERENCE SMITH: Was this something of a gamble, to put Bernard Ebbers on the stand? That always, as you just said, exposes a witness to cross-examination. I wonder what the considerations were, if you know.

KEN BELSON: Well, I don’t know directly from the lawyers. It is always a risk. The easy part was mostly today when the defense lawyer was asking him the questions. And I think he probably had rehearsed that quite a bit over the last couple of months.

The tough part comes at the end of today, and then also into tomorrow when the prosecution continues to ask him questions. We did see a little taste of that today. There was about an hour of cross-examination.

And at one point, Mr. Ebbers got a little testy with the prosecutor’s questions; at one point even folded his arms almost as in defiance of the questions, the line of reasoning anyway from the prosecutor. So it’s a gamble because he could show a different side of himself, and all of that carefully orchestrated persona that was put up on the stand today could come undone maybe tomorrow.

TERENCE SMITH: And you expect more cross-examination tomorrow, even after that?

KEN BELSON: Yes, that’s what we are being told.

TERENCE SMITH: Okay. Terrific. Ken Belson, thank you so much for filling us in.

KEN BELSON: Thank you.