Ex-WorldCom faces trial
By Erin McClam
NEW YORK -- Bernard Ebbers took a small long-distance telephone company and transformed it into a global telecommunications giant.
But Ebbers' creation, WorldCom Inc., fell on tough times. The stock price was wobbly and Wall Street was asking tough questions. Its guiding force, though, repeatedly denied there were problems, even famously reassuring concerned analysts in 2001 that "we do not see any storms on the horizon."
The next year, in the summer of 2002, WorldCom collapsed under the weight of an $11 billion accounting fraud and filed for the largest bankruptcy in the history of American business.
Federal prosecutors say Ebbers was lying, orchestrating a shell game to cover up his company's financial trouble and stay in Wall Street's good graces. The former WorldCom CEO faces a criminal fraud and conspiracy trial in New York, with jury selection getting under way this week.
While Ebbers has kept a low profile since he was indicted in March 2004, he has always maintained his innocence.
"Bernie Ebbers never sought to mislead investors, never sought to improperly manipulate WorldCom's numbers, never improperly took any money and never sought to hurt the company he built," his lawyer Reid Weingarten said at the time.
Today, defense lawyers and federal prosecutors were scheduled to meet in court to resolve final pre-trial matters in the case.
Jury selection was set to start Wednesday, with potential jurors filling out questionnaires in the case. Opening statements could come as early as next week.
The trial was expected to last four to eight weeks. It will be followed closely by some of the tens of thousands of people who lost their jobs or their investment money when WorldCom folded.
One of them is Danny Thompson of Plano, Texas, a former Tyco engineer.
"Bottom line, one minute you have a retirement plan and a future, you're making a living wage at a great job, and the next you're working for less than half of what you used to make and have zero retirement," he said.
Federal prosecutors say Ebbers lied repeatedly to investors, Wall Street analysts and the SEC about the true shape of the company, which has since emerged and now operates under the name MCI Inc., with headquarters in Ashburn, Va.
Even after WorldCom began to suffer following the bursting of the technology bubble, Ebbers repeatedly offered a positive spin, promising sound finances, strong revenue growth and conservative accounting.
The government's star witness was expected to be Scott Sullivan, former chief financial officer of WorldCom, who faced his own trial until pleading guilty in 2004 and agreeing to testify against his former boss.