Former Executive Says Ebbers Apologized
The former controller of WorldCom Inc. testified Thursday that then-Chief Executive Bernard J. Ebbers apologized to him in 2000 after company accountants were forced to cover up more than $800 million in expenses.
David Myers said in U.S. District Court in New York that he encountered Ebbers in a hallway in October 2000 at the company’s Mississippi headquarters, days after he and other accountants had devised a plan to paper over soaring costs.
He paraphrased Ebbers as saying: “I’m sorry you were asked to do what you were asked to do. It’s something that you should not have been put in that position to do.”
The testimony was part of an effort by prosecutors to portray Ebbers as aware that WorldCom was suffering financially and that number-crunchers were asked to use accounting tricks.
Myers also testified that Ebbers, in a meeting in 2000, insisted WorldCom should predict 15% revenue growth for 2001 -- even though finance chief Scott D. Sullivan believed the company would not top 12%.
“Bernie indicated that the company really needed to have 15% in the range,” Myers said.
Ebbers is charged with fraud and conspiracy, accused of orchestrating the massive accounting fraud at WorldCom, eventually estimated by investigators at $11 billion.
Prosecutors have portrayed Ebbers as obsessed with keeping the company’s stock price high by keeping its financial numbers in the good graces of Wall Street.
But Myers also made clear in his testimony that it was Sullivan, not Ebbers, who explicitly ordered him to find a way to hide expenses when they came in far higher than expected in the third quarter of 2000.
At the time, so-called line costs -- the fees WorldCom paid other telephone companies to lease their lines -- had soared out of control, putting WorldCom in danger of missing Wall Street earnings estimates.
The former controller has pleaded guilty to fraud and conspiracy in 2002, agreeing to cooperate with the government in hopes of winning a lighter penalty when he is sentenced.
WorldCom changed its name to MCI Inc. after it emerged from bankruptcy protection last year and is now based in Ashburn, Va.
