Subject:  Ebbers faces jail Worldcom ceo... |
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Con_man
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Date Posted: 10:47:24 03/06/05 Sun
Ebbers faces jail
By David Nason
07mar05
NEWSWEEK celebrated the release from prison of lifestyle guru Martha Stewart with a front cover "composite photo" that takes her head and plonks it on the much slimmer model's body.
So the question has to be asked: whose body would one-time billionaire Bernie Ebbers be allocated if he beat jail in the WorldCom fraud trial now in the hands of the jury?
If the trial is to be any guide, you really can't go past Sergeant Schultz from TV's Hogan's Heroes. Throughout the six-week trial the Schultz mantra "I know nothing" has been the centrepiece of the Ebbers defence.
That, and the notion that Scott Sullivan, the WorldCom chief financial officer who executed the telco's $US11 billion fraud between 2000 and 2002, is angling for a reduced sentence by testifying against his old boss and therefore has every reason to lie.
Now it's up to the jurors who were told last Friday by Judge Barbara Jones they didn't have to conclude that Ebbers, 62, was part of the fraud in order to find him guilty. Judge Jones said it was enough for the jurors to find that Ebbers "deliberately closed his eyes to what was otherwise obvious".
While it's a notoriously foolish exercise to try to second-guess a jury, some of the documents the jury requested suggest Ebbers is in trouble.
Among them was the text of a voicemail message left by Sullivan in which the CFO told Ebbers he was worried about "accounting fluff" and "junk" in a financial report.
The jury also called for the transcript of evidence given by David Myers, a senior WorldCom financial controller who has also pleaded guilty to his role in the fraud and testified that Ebbers had expressed regret to him about forcing WorldCom's accountants to alter the books.
In a case where there is no paper trail linking Ebbers to the fraud and where Sullivan's evidence consists entirely of private, uncorroborated conversations with his boss, is this a sign of a jury inclined to convict and looking for whatever corroboration there is to do it?
Only time will tell, as it will for Stewart and the fortunes of Martha Stewart Living Omnimedia.
While MSO's share price has more than tripled since she went to jail last year for lying to regulators about a stock sale, analysts are united in the view that its $US33 closing price on Friday is way overvalued given continuing poor revenues.
Some analysts rate the stock as low as $US6 on performance but against that is Stewart's remarkable ability to promote herself and her products. Can she do it again?
She left prison claiming her five months inside had been a "life altering and life affirming" experience, something she will no doubt squeeze for all its worth on the daily lifestyle show she is soon to front on NBC TV.
There's also this year's Martha Stewart version of Donald Trump's Apprentice, a potentially dangerous exercise because firing people each week on TV could easily highlight the negative aspects of Stewart's character and invite people to dislike here.
People disliked Stewart in 2002 when she was charged and the MSO stock price plunged to below $US5.30, but the company's new chief executive, Susan Lyne, thinks the show can be done "creatively" and in a way that draws people to the brand.
Stewart's biggest drama remains the US Securities & Exchange Commission which wants to ban her as a director and limit what officer roles she can perform in listed companies. That case is on hold pending her appeal against her criminal conviction.
But one thing can be said for certain. Right now Martha Stewart is sleeping a whole lot sounder than Bernie Ebbers.
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