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Cross-examination of the government’s chief witness in the trial of former WorldCom CEO Bernard Ebbers began Wednesday with “whiz kid” Scott Sullivan, WorldCom’s ex-CFO, holding his own against veteran defense attorney Reid Weingarten. While Weingarten cast some doubt on Sullivan’s credibility, he was unable to shoot many holes in the witness’s contention that he received orders from Ebbers to commit fraud. The cross-examination of Sullivan, the linchpin of the government’s case against Ebbers, is likely to be the critical juncture of a trial lacking bountiful documents and many witnesses who can directly attest to Ebbers’ role in the fraud. Sullivan was the alleged conduit between Ebbers and the accounting machinations in which WorldCom overstated its revenues and hid expenses by $11 billion leading up to its eventual collapse into bankruptcy in 2002. WorldCom emerged from the nation’s largest ever bankruptcy last April under the name MCI. Prosecutors pinned the fraud on Ebbers, who has been charged with multiple counts of securities fraud and related actions. If convicted, the 63-year-old defendant faces up to 85 years in jail. Weingarten started his cross with softball questions, trying to lull Sullivan as he prepared for an attack. Early on, Weingarten, working from his script, asked Sullivan a series of questions on line cost capitalization, the process by which WorldCom improperly recorded expenses. Sullivan answered without much resistance. Then Weingarten launched the assault: “When you told him,” referring to another senior executive, “you were capitalizing line costs, did he have a stroke?” “Objection,” blurted William Johnson, an assistant in the Southern District U.S. Attorney’s Office. Judge Barbara Jones sustained. In a soft-spoken, sometimes didactic tone, Sullivan last week outlined the financial downfall WorldCom faced in 2000 after Internet companies feeding its growth collapsed and the government blocked its plans to acquire competitor Sprint. Through hours of cross-examination Wednesday, the witness did not budge from this tone, avoiding a defensive posture even when admitting to repeatedly lying to investors and other WorldCom executives. Sullivan focused on jurors rather than Weingarten when answering complex questions, and always tried to add favorable context to leading questions, resisting Weingarten’s efforts to narrow his responses to “yes” or “no.” Weingarten of Steptoe & Johnson, a savvy advocate who successfully represented former Tyco general counsel Mark Belnick last year, was at his most successful when undermining Sullivan’s credibility. “So you were attempting to mislead them?” he asked, referring to WorldCom’s executives and audit committee before Sullivan was fired in 2002. “Yes,” Sullivan responded. “If you believed something is in your interest, you’re willing to lie,” asked Weingarten. “Yes,” Sullivan answered. “You lied your head off,” Weingarten continued. Judge Jones stopped Sullivan from answering. Weingarten also made in-roads in Sullivan’s deal with the government. It is standard procedure for defense attorneys to accuse witnesses who are cooperating with prosecutors in the hope of a reduced sentence of embellishing or even lying on the witness stand about a defendant. Weingarten astutely cast doubt on Sullivan’s motives by showing that he did not plead guilty until early last year, just weeks before his trial and knowing that other witnesses had turned against him. Weingarten’s questions insinuated that Sullivan, who had been indicted soon after the problems at WorldCom were made public in 2002, finally pleaded guilty and turned against Ebbers when the deadline for his trial approached. If found guilty, he could have faced decades in jail. At other times Wednesday though, Sullivan capably shielded himself. On direct examination, he repeatedly told jurors of Ebbers’ insistence that WorldCom “hit the numbers,” referring to analysts’ expectations of the company’s financial performance, despite continued appeals and concerns lodged by Sullivan to reconsider. Sullivan took these words to be marching orders to commit fraud. Attempts by Weingarten to cast these words in another light were not effective. Sullivan, by repeatedly placing conversations he had with Ebbers in context, avoided getting pinned down to “yes” or “no” answers, or labeled as the one who masterminded the fraud unbeknownst to Ebbers.

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