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Bernie Ebbers Jurors Explain Verdict

As we reported here yesterday, the only witness against Bernard Ebbers who directly implicated him in the WorldCom fraud was the company's former CFO, Scott Sullivan, who was testifying in exchange for a reduced sentence in his own case.

After the verdict, some jurors said they had difficulty with Scott Sullivan's testimony and did not entirely believe it. They said they searched for evidence to corroborate Sullivan's contentions that Ebbers knew about, endorsed and at times directed Sullivan to engage in the fraudulent accounting practices that led to the massive $11 billion loss.

"The most difficult thing was to find the evidence that supported the conviction without relying on Scott Sullivan," Aran Nulty, an elementary school teacher and juror No. 10, told the paper. "The testimony of Mr. Sullivan was not enough by itself. A lot of us struggled with his testimony. His testimony did not have enough credibility for us to come to a conviction based on what he said."

What exactly was that corroborating evidence? I don't see it. The case was Scott Sullivan. Sullivan was on the stand for five days, relentlessly attacking Ebbers. Ebbers testified, doing well on direct examination and not so well on cross-examination. But he didn't say anything that corroborated Sullivan. And Sullivan was the mastermind of the false accounting scheme.

Could it be that the massive size of the fraud alone was enough to persuade jurors they couldn't give Ebbers a pass? Or, did Ebbers' own testimony do him in. I think it's the latter. Instead of keeping the jurors focused on Sullivan's credibility, Ebbers, by testifying, put his own credibility at issue. If the jury didn't find him convincing, it's a short step to saying he lied. If he lied about not knowing about the fraud, then he was guilty.

The New York Times reports:

Mr. Ebbers's testimony that he did not know about the fraud, according to one juror, was unconvincing. "A lot of his own testimony pretty much did it," said the juror, who insisted on anonymity.

Deciding whether to take the stand is a decision that ultimately belongs to the client, not the lawyer. A lawyer makes a recommendation to the client at the end of the Government's case, answering the questions, do we need to put on a case at all, and can the defendant bring the case home if he testifies?

Often clients, particularly ones who have been successful in their lives, believe that the jury needs to hear them tell their side of the story. But the jails are filled with people that thought if they could only tell their side of the story, the case would just go away.

Scott Sullivan was impeachable and he admitted cooking up the fraud scheme, using cocaine and marijuana and that he was singing for his supper, hoping for a lenient sentence. If Ebbers hadn't testified, and the defense just hammered on Sullivan's lack of credibility in closing and on the lack of corroborating witnesses, maybe the verdict would have been different.

But, looking at it from Ebbers standpoint, had he not testified and been convicted, he would be kicking himself for the next 20 years or more for not taking the stand, wondering if his testimony would have changed the outcome.

I think it is a rare case where the defendant should take the stand. Unless the client was in Ohio when the crime occurred (making alibi your defense,) it's a road filled with potholes and a very big risk. The burden of proof is on the Government. Why make its job easier? Trials are not really a search for the truth, they are only a testing of the evidence.

Ebbers' defense team had the money for mock juries, shadow juries, skilled lawyers and trial consultants to gauge the acceptability of the "How was I to know" defense, to take him through grueling mock-cross examinations and to predict the effect of Ebbers' testimony on the jury. I assume they did all that. And that Scott Sullivan's defense team, led by the excellent Roy Black, did the same to prep Sullivan for his testimony.

The standard of proof of beyond a reasonable doubt is not met where the jury weighs two versions of events, finds both somewhat credible and then decides which is more believable. That's enough for a civil case, not a criminal case.

Had Ebbers not testified, and the jurors been faced only with Sullivan's testimony to implicate him, the verdict might have been different. And then again, maybe not. Maybe it was just the size of the fraud, and the jurors own inability, using their common sense, to conceive that someone as high-up in the company as Ebbers wouldn't know about it. Which just goes to show, Monday morning quarterbacking of trials really is just a spectator sport.

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    Re: Bernie Ebbers Jurors Explain Verdict (none / 0) (#1)
    by Talkleft Visitor on Thu Mar 17, 2005 at 07:09:53 AM EST
    I have heard there is a concept in the law - "the thing speaks for itself". Some things are so blatant they don't require corroborrating evidence. Hiding a period cost on the balance sheet isn't high finance wizardry - it's Accounting 101, the kind of thing every 1st semester accounting class teaches. Compared to the dense, multi-layered book-cooking at Enron, this is almost laughably simple. The defense's only hope was to convince jurors with no business backgrounds that the fraud was more complicated than it really was - some kind of egghead stuff 'master-minded' by the bean-counters, way out of the realm of normal folks like Ebbers. In reality, these are basic concepts that any business person - especially the highly-paid CEO of a publicly-traded company - knows or should know. Good job on the part of the jury for upholding responsibility.

    Re: Bernie Ebbers Jurors Explain Verdict (none / 0) (#2)
    by Talkleft Visitor on Thu Mar 17, 2005 at 07:11:03 AM EST
    I have been saying this on your threads since before the verdict. I'll say it again. In the Ebbers case, you don't need any corroboration, and don't need to trust the CFO. It is enough to convict, beyond a reasonable doubt, if 1) the firm has done a high-level accounting fraud, 2) the defendant has the office of the CEO, and 3) there is no credible evidence that he is a hands-off CEO. Most folk who have worked in a hierarchical organization would agree with me. I think that the Ebbers jury was an excellent one, because it correctly discounted Sullivan's testimony, carefully dredged through the evidence (even though I think most of it was secondary supporting stuff), and convicted. Again, Ken Lay is different, because there is some credible evidence that he was a hands-off CEO. If I were a juror in Ken Lay's case, I would not convict unless I heard credible evidence that established his involvement beyond a reasonable doubt.

    Re: Bernie Ebbers Jurors Explain Verdict (none / 0) (#3)
    by Talkleft Visitor on Thu Mar 17, 2005 at 07:20:17 AM EST
    Res ipso loquitor - the thing speaks for itself. As to the other posts, you are forgetting that these crimes requires mens rea - a criminal state of mind, intent. For these reasons, I would like to see a statute that makes corporate crime like this a matter of strict liability like statutory rape. In a crime of strict liability, state of mind or intent don't matter, if the facts indicate the crime occurred, you get convicted. I haven't followed this case closely, but I suspect I would agree with TL that the case was weak. A statute of strict liability that would guarantee jail time for CEO's and CFO's under certain circumstances (enron, arthur anderson, and halliburton come to mind) would go along way towards clarifying and bolstering "business ethics."

    Re: Bernie Ebbers Jurors Explain Verdict (none / 0) (#4)
    by Talkleft Visitor on Thu Mar 17, 2005 at 07:21:18 AM EST
    should be res ipsa loquitor. Haven't had my coffee yet. Off to court in a bit. Later

    Re: Bernie Ebbers Jurors Explain Verdict (none / 0) (#5)
    by Talkleft Visitor on Thu Mar 17, 2005 at 09:50:58 AM EST
    If you examine the corporate cultures of Worldcom and Enron, they have the mens rea, at least as reported by the media. I'd convict every top dog in those companies.

    Re: Bernie Ebbers Jurors Explain Verdict (none / 0) (#6)
    by Talkleft Visitor on Thu Mar 17, 2005 at 10:06:24 AM EST
    Oh Pulezze..Lay benefited from every dime and Ebbers was CEO. If he didn't know then the stockholders should be allwed to beat him to death for being an incompetent fool who happened to be a good salesmen These men draw enormous salaries and they are responsible. Unless they can prove the sleazy people THEY HIRED lied to them. Just look at that Lisa Myers NBC shill interview with Lsy --He's a big fat liar. The problem is the corporate culture in America is to wink and nod and every rule is made to be broken. The sin is getting caught. Absolutely everything in the US today is about money --what is the bottom line. And not even big picture money --but cash in hand live for today money. We are quite a disgusting lot.

    Re: Bernie Ebbers Jurors Explain Verdict (none / 0) (#7)
    by Rick B on Thu Mar 17, 2005 at 10:06:51 AM EST
    conscious angel, you are describing Sarbanes-Oxley. Both the CEO and the CFO (and, I think, the Board members) must now sign a statement that they have investigated and assured themselves that the finanacial statements are accurate and that they take ~personal~ responsibility for them. It is, needless to say, not popular legislation with the management set.

    Re: Bernie Ebbers Jurors Explain Verdict (none / 0) (#8)
    by Dadler on Thu Mar 17, 2005 at 10:48:13 AM EST
    TL, The jury's minds are the processors of "evidence", and are therefore -- whether we want to face it or not -- an integral part of that evidence. This may not be legally enshrined, but it is the concrete reality. You cannot separate humans from human nature. Unfortunately, we can't program computers to act as juries. Human frailty, emotion, instinct, intelligence or lack thereof, these are as much "evidence" in a trial as any piece of solid stuff. Not perfect, but irreversibly true. Also, Ebbers was the only one to paint himself as an out-of-the-loop dupe, I believe. And while doing that, he could only come off LESS credible than Sullivan...in the MINDS PROCESSING THAT TESTIMONY/EVIDENCE. And that's what sunk him, rightly or wrongly, I think.

    Re: Bernie Ebbers Jurors Explain Verdict (none / 0) (#9)
    by Talkleft Visitor on Thu Mar 17, 2005 at 10:10:55 PM EST
    I am not certain that Sarbanes-Oxley has a criminal component and it still gives the option of the "I am so stupid" defense. I want something stronger, a strict liability statute that mandates jail time for certain corporate officers when certain circumstances have occurred within the company, its stock value, its structure, bottom line etc. But thanks for reminding me of S-O, it's a step in the right direction. These are the people that we can trust with our privatized Social Security accounts. Anybody have any concerns or questions?

    Re: Bernie Ebbers Jurors Explain Verdict (none / 0) (#10)
    by Talkleft Visitor on Thu Mar 17, 2005 at 10:23:59 PM EST
    It is, needless to say, not popular legislation with the management set. It must be terrible for them, having to put down their coffee cup / golf clubs and actually do something productive like ensure that their culture of runaway greed and apathy doesn't tank investors retirement accounts. Maybe they could also re-invest those retained earnings in compliance rather than shoving it all in their pockets.

    Re: Bernie Ebbers Jurors Explain Verdict (none / 0) (#11)
    by Talkleft Visitor on Fri Mar 18, 2005 at 05:55:51 AM EST
    CA - Oh dear, I just discovered that my Doctor ia being jailed for causing an intentional death. There goes my medical treatment... Oh dear, I just discovered that my Attorney is being jailed for fraud. There goes my Will getting written.