Trial About to Begin for Former WorldCom CEO

WorldCom Inc. was in trouble. The stock price was wobbly and Wall Street was asking tough questions. But Chief Executive Bernard J. Ebbers repeatedly put a positive face on his company, promising sound finances, strong revenue growth and conservative accounting -- famously reassuring concerned analysts in 2001 that “we do not see any storms on the horizon.”

Federal prosecutors say Ebbers was lying, orchestrating a shell game to cover up WorldCom’s financial trouble and stay in Wall Street’s good graces. In the summer of 2002, WorldCom collapsed under the weight of an $11-billion accounting fraud and filed the largest bankruptcy case in American business history.

Ebbers, 63, faces a criminal fraud and conspiracy trial in New York, with jury selection getting underway this week.

The trial completes a remarkable arc for Ebbers, from visionary who launched a long-distance company with colleagues at a Mississippi coffee shop in 1983, to leader of one of the world’s leading telecommunications firms, to accused felon facing possibly years in prison.

Although 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.

Potential jurors are set to fill out questionnaires Wednesday, with juror interviews set to start Monday. Opening statements could begin as early as the middle of next week.

The government’s star witness is expected to be Scott D. Sullivan, the former chief financial officer of WorldCom, who faced his own trial until pleading guilty in March and agreeing to testify against his former boss.

Prosecutors are expected to play a June 2001 voicemail message in which Sullivan told Ebbers that a WorldCom internal revenue report “just keeps getting worse and worse” and “already has accounting fluff in it.”

The defense is expected to argue that Ebbers left the accounting decisions to Sullivan, and that Sullivan was willing to tell the government what it wanted to hear when he made his deal last year.

WorldCom, which went through Chapter 11 bankruptcy proceedings, now operates under the name MCI Inc. Its headquarters are in Ashburn, Va.