Delivering a magisterial closing argument, Assistant U.S. Attorney William Johnson tied the various strands of the case against Bernard J. Ebbers tightly enough to likely secure a conviction, and offered a roadmap for making cases against CEOs in other instances, as well.
Thursday, it will be up to the defense to argue that the road map is a general plan–full of conjecture–that does not necessarily lead to Ebbers. Most likely, it will be tough going for Ebbers’ lawyer, Reid Weingarten.
“We all know many things can corrupt you,” Johnson began. “Money can corrupt you, power can corrupt you, pressure can corrupt you.” In Ebbers’ case, the three forces were combined to create “a perfect storm of corruption,” he said.
That fraud was committed at WorldCom under Ebbers’ watch was never seriously in doubt, the company having reported itself. The question in this case is what Ebbers knew, and the proof was made difficult by the fact that Ebbers himself did not create any of the financial statements that misled investors.
Johnson made the case that Ebbers, 63, was the most motivated and the most empowered to guide the fraud, making it “common sense” that he did it. As all CEOs are able to push and pull levers of money and power, and all are under pressure, Johnson’s theme was universal.
The direct evidence that Ebbers knew about the massive accounting fraud at WorldCom comes essentially from Scott Sullivan, WorldCom’s former CFO, now a cooperating witness. Sullivan and his staff controlled WorldCom’s financial reporting directly. But Johnson argued that the logic of WorldCom–not so different from the logic of all big companies–meant that Ebbers was not just involved, but in charge.
“The question for you is simply who put the fraud in motion,” Johnson told the five-man, seven-woman jury. It could have been Sullivan, who has admitted his guilt. But Ebbers was the boss: “Who had the most to lose if the truth came out? Who had the power?” Johnson asked.