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The harder they fall

Everything about WorldCom chief executive Bernie Ebbers was larger than life. He strode corporate boardrooms in cowboy boots and bought companies as easily as others trade cars. His personal debts ran to hundreds of millions of dollars and were backed by the fraudulently inflated price of stock in his telecommunications empire. When WorldCom failed, it was the biggest bankruptcy ever.

Ebbers' own descent is now the stuff of legend. Convicted recently of nine criminal charges stemming from financial skulduggery at WorldCom, he is the tallest timber felled so far in the forest of corporate scandal. Martha Stewart is a more familiar face, but her stock manipulation was small change compared to Ebbers' crimes. She did five months, while he faces up to 30 years in prison.

Arrogance led to his downfall. Prosecutors argued that Ebbers directed Scott Sullivan, the company's chief financial officer at the time, to hide expenses and inflate profits to prop up the stock price. It was a tough sell to jurors, however, because the only evidence linking Ebbers directly to the fraud was Sullivan, a less-than-believeable witness.

Then Ebbers took the stand. His evasions and unconvincing self-portrayal as a trusting boss who didn't understand accounting or technology eroded his credibility, according to jurors who spoke after the verdict. "A lot of his own testimony pretty much did it," one juror said.

So Ebbers' last con failed, and he is going to be held accountable. Thousands of former WorldCom employees and investors, who lost millions on the company's misfortune, are still not made whole. They can hope, however, that this is the end of an era when unscrupulous executives escape responsibility for the fraudulent practices of their underlings.

Still awaiting trial or a verdict are several former chief executives: Enron's Ken Lay and Jeffrey Skilling, L. Dennis Kozlowski of Tyco International and HealthSouth's Richard Scrushy. After the Ebbers verdict, no one can rest assured that the best legal team money can buy is a guarantee you can get away with it.

[Last modified March 19, 2005, 01:01:18]