Adelphia Witness’ Credibility Questioned

A lawyer for Adelphia Communications Corp. founder John Rigas sought Monday to discredit the government’s star witness, who testified the Rigas family used a variety of deceptions to mislead investors and the public about the financial condition of the cable television company.

For more than a week the jury in the trial of John Rigas, two of his sons and a senior Adelphia executive has heard testimony from former Adelphia finance chief James Brown that the family used fraudulent transactions and accounting maneuvers to disguise the existence of $2.3 billion in off-balance-sheet debt from the public.

But during cross-examination Monday, Brown admitted that he agreed with the Rigases and auditor Deloitte & Touche that the Rigas debt did not need to be disclosed as liabilities on Adelphia’s financial statements.

“Am I right that you, together with Deloitte & Touche, reached the conclusion that it was not necessary to book Rigas obligations as liabilities on Adelphia’s books?” Rigas attorney Peter Fleming asked.

“That was my conclusion. I’m not sure why Deloitte & Touche agreed to that,” Brown said.

The Rigas defense sought to paint Brown as the rogue head of the accounting unit who deceived the Rigas family, committed criminal acts and is now testifying in exchange for what he hopes will be a reduced sentence.

Brown was arrested in November 2002 on charges related to the collapse of Adelphia in May 2002.

John Rigas, 79, his sons Michael, 50, and Timothy, 47, as well as former Adelphia executive Michael Mulcahey are charged with 24 counts of wire, bank and securities fraud and conspiracy related to the collapse of the nation’s fifth-largest cable television operator.

Brown is the highest-level former Adelphia employee to plead guilty and cooperate with the government in exchange for the possibility of a reduced sentence. Several members of his accounting department also are cooperating with government prosecutors.