Life in prison
Comments (15)
Monday, September 25, 2006 | 11:14 AM ET
By Henry Champ
On Tuesday, Canadian-born Bernie Ebbers will go to jail for a long time.
The former CEO of WorldCom will be issued number 56022-054 and will serve his sentence at Yazoo City minimum security facility near Jackson, Miss.
American lawmakers hope the sight of a handcuffed Ebbers heading off to a 25 year sentence will send shock waves through the business world.
Stiff new penalties for white collar crime have increased dramatically since 2002 and Ebbers is the first, and clearly the most-powerful CEO, to pay this heavier price.
Ebbers was found guilty of securities fraud, conspiracy and filing false documents with regulators for his role in an $11-billion accounting scheme that bankrupted the WorldCom company, wiped-out countless investors and emptied the company's pension funds.
Ebbers argued at trial that he knew nothing of the bookkeeping fraud. He blamed other executives. He characterized himself as the company's "coach" and "cheerleader", that he was the big picture guy. Legal observers called it the "aw shucks" defence.
The jury would have none of it.
The clinching argument
Jurors accepted the prosecution's argument that WorldCom was caught in the telecom downturn at the beginning of the decade. And that Ebbers, needing to show good earnings, browbeat his financial department to cook the books to convince Wall Street that things were well at WorldCom.
In the closing argument, prosecutor William Johnson said, "$11 billion dollars was a number so big that a CEO knows everything about it'.
So, now, the 65-year-old Ebbers, who suffers from a heart ailment, goes to jail and in all likelihood will never see freedom again.
There will be appeals. But Matt Steffy, a law professor at Mississippi College told the Jackson Clarion-Ledger, "unless he can show three judges that they made some grievous error in their opinion, they will not grant a rehearing.
"You've got to show that in their written opinion they got something wrong, demonstrably wrong, like relying on a case that was bad law and has been overturned".
Yet according the Washington Post, the length and severity of the Ebbers sentence has raised questions about "how large a pound of flesh should society exact for serious white collar crime".
Ebbers, born in Edmonton and schooled at the University of Alberta, was a basketball scholarship winner in the U.S. who had an illustrious rise in business. He started and operated a chain of motels in Mississippi, and then led WorldCom to the pinnacle of the telecom world.
It's the kind of record Americans normally applaud. No criminal record before this; a generous giver to charity.
The evidence at trial indicated that Ebbers poured a lot of his own money back into WorldCom to try to save the company. Today he is virtually penniless.
One student of the trial, University of Texas law professor Henry T.C.Hu observed: "On a personal level, you have got feel for people like Ebbers, who will likely die in prison. But overall I think the system got it right".
And the American people, how do they feel?
As one White House observer said, this verdict and sentence will never be overturned by any presidential pardon. He or she wouldn't dare.
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Henry Champ is CBC Newsworld's correspondent in Washington, D.C., delivering Canadian viewers the latest developments in the U.S. political arena. Recently, he has been a leading Canadian voice on coverage of the war on terrorism, the war in Iraq and the growing concerns over the Canada-U.S. relationship.
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Comments (15)
Aaron
Edmonton
Jack, the problem here is not that it was crimes against properties. The problem is that indirectly, this was a crime against several thousand people.
This was senior's retirment saving from a life time of working, now with no funds to pay for the basics of life. This was employees who where suddenly without a job as a company that was supposedly doing well went bankrupt. For the former, they may have no other recourse and no longer have the ability to work. For the later, there is the stain of being associated with such an ugly scandal even if they had nothing to do with it.
It was not for the funds he was punished. It was for what he did to all those who depended on him and his company when he faked those figures. With false figures he said he could manage quite a bit. When the actual figures showed, the illusion faded and the gems he promised where but granite.
Some crimes do have a slap on the wrist, but we recognize that many times crimes are a result of other problems. Poor or no income to pay for the basic necessities of life. little to no education to get employment that might provide for families. This is why the sentances are often light and the focus is more on rehabilitation than punishment.
In this case there is no excuse. He was not destitute. He was not unemployed. His family was not starving or without shelter. He does not have the excuses that make hunting for food a valid comparison. More like he burnt down the forest to chase out the game, not considering who would all die in the conflaguration.
Posted September 30, 2006 10:47 AM
Gary Dare
It wasn't just the lives of his employees and investors that Ebbers destroyed but he disrupted an entire industry. The original AT&T tried to meet MCI WorldCom's revenues, profits and cost efficiencies by reorganizing, spinning off or shutting down divisions, and massive layoffs. CEO Michael Armstrong was demoted to AT&T Wireless (which eventually shut down) for his failure against Ebbers. The legendary Bell Labs was diminished to an empty shell. Years later, we find out that all the figures were fake!
Posted September 29, 2006 08:09 PM
Jack
Kingston
Well, I guess we will get the justice system we deserve, as most of the people here seem to think crimes against property merit more punishment than crimes against persons.
As I suggested, before going off on how much Ebbers deserved what he got, one should look at the history of times when crimes against property were weighted more heavily than crimes against persons.
Posted September 29, 2006 01:07 PM
S Best
Looks good on him. With a title like CEO comes great responsibility. Mr. Ebbers was not only responsible for the well being of the company, but, indirectly, the well being of those who worked for it. His fraud has damaged or ruined hundreds of thousands of lifes, and he should be punished harshly.
Posted September 28, 2006 05:59 AM
Wayne
Edmonton
Maybe Canadians should take heed and learn from the American justice system. A crime is a crime whether or not a rich CEO or a Politician, fraud, embezzlement, channelling funds is a crime. We should do the same here instead of slapping people on the wrists, ie The Sponsorship scandal, Shawanigate etc.
Posted September 27, 2006 11:51 PM
Mark
Kingston
It's about time! The scale of this sort of crime is mind-boggling. If someone were to steal a $30k car the insurance company would cover it. The thief, if caught, would probably get a 1 year sentence (and only serve 6 months). Mr. Ebbers has overseen the theft of the equivalent of more than 350000 cars (which the insurance companies don't cover) and 25 years jail is too much?
Unfortunately by focusing on the money the human element is often ignored. 350000 people and their families will have to deal with the after-effects of having a part of their future taken away from them. Will they be able to channel the inevitable anger into a positive endeavour or will they end up abusing themselves and/or their families? My money is on an increase of alcoholism, domestic abuse, and other criminal tendancies thanks to Mr. Ebbers' actions.
Posted September 27, 2006 09:55 PM
Kari
U.S.
Some people here seem to think Ebbers' penalty was too harsh.
Don't get me wrong, criminals who rape and murder should go to jail FOREVER. But sometimes (not always) these people grew up with wretched poverty, abusive homes and drug addiction. We should at least feel sorry for their misfortune.
So Ebbers - what's his excuse?? That his fifth Mercedes has a scratch and his caffe latte didn't have enough nutmeg? This is disgusting. How dare he put so many people out of work when he had such a privileged life. His company had a "downturn"? Aww, Boo Hoo.
America has some good creative rehabilitation programs for non-violent criminals (robbery, drug dealing). Some people just need a decent job and a decent home to shape up. Ebbers will never shape up. If he can't appreciate a perfect home, health insurance and a luxury lifestyle, he deserves what he got.
Posted September 27, 2006 01:23 PM
Neil
Toronto
The Canadian system is too lax. We should be following the Americans on this issue. Most fraudsters in Canada get out after serving 1/3 of the sentence with double or triple deductions for pre-trial custody.
Posted September 27, 2006 02:15 AM
Richard
Windsor
Mr. Ebbers was trusted by many people who lost
jobs, pensions, and life savings because of his
actions. The total suffering which he inflicted far
far exceeds the suffering he or his family have
been allocated by the judicial system.
Power and privilege come with responsibility.
Those who abuse that power should expect dire
consequences. Maybe we should reconsider the
penalties for corrupt politicians - consider
the suffering that could have been prevented
by appropriate use of those tax dollars which
have been misappropriated.
Posted September 27, 2006 12:45 AM
Doug Gifford
Gananoque
The US criminal justice system is a harsh one. Lots of people die in prison and lots of people's families are paupered in the process. Assuming that the verdict was correct, Ebbers' punishment is no more unjust than for the thousands of other victims of this system. At least he was able to afford the best lawyers to defend himself. I also suspect that "virtually penniless" means something quite different for Ebbers' family than it does for most of us. Theft is theft; you make your choices and reap the consequences.
Posted September 26, 2006 09:12 PM
Jack
Kingston
Big sentences for these people are all well and fine, and saying the crime is victimless is clearly wrong, but there is a skewed value here.
If I go and kick the crap out of someone, including leaving them in a brain-damaged or paralyzed condition, I will not get the kind of sentence he got, nor anything even close to it, yet I will have deprived that person of far far more than Ebbers deprived his victims of, which was money. In many ways, the recent changes in the legal system seem to tend towards the idea that crimes against property are more heinous than crimes against persons.
This is not a good place to go; the last time our ancestor legal systems held this to be true was in the eighteenth century, and resulted in many many bad results, like debtor's prisons and execution for crime of hunting for food. Do we want to return to a legal system with that perspective?
Posted September 26, 2006 12:02 PM
michael murphy
got what he deserved
Posted September 26, 2006 12:48 AM
Donna Sharman Smyth
Mr. Ebbers should have stayed in Canada and made his fortune here instead of putting his freedom in jeopardy in the United States. His sentence was so unfair compared to the crime - rapists get a slap on the wrist and are free to rape again. Mr. Ebbers got caught up in a society that has lost its way. Greed is the order of the day in the U.S. now.
Posted September 25, 2006 02:52 PM
Steve
Halifax
White-collar crime is considered victimless, and therefore carries less sentences. There are always victims of crime, be it investors, owners, the tax-paying public...and there are some who get away with it once only to up the ante...and why shouldn't they? Our law enforcement agencies mostly turn a blind eye and when folks do get charged, they get slaps on the wrist.
I can say for certain that GWB did one thing right in his presidency, and that is turning up the heat on these types of criminals.
Posted September 25, 2006 12:05 PM
Joe
Halifax
If the CEOs of major companies can justify their massive salaries and perks with their supposed incredible value to shareholders than the defense that they were unaware of the bilking of those same shareholders as well as employees rings very hollow.
White collar crime on this scale dwarfs the efforts of 1,000 muggers on the street but the action is essentially the same. While Mr Ebbers may not be a "bad" man in the traditional sense of the word, tell that to the people who lost their life savings and are now financially destitute because of his actions.
Posted September 25, 2006 11:41 AM