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Livent's fallacious testimony?

The literary term “pathetic fallacy” describes when a writer gives human traits or feelings to nature or some other inanimate object to reflect the mood of a scene in the story. On the second day of Maria Messina’s cross examination, pathetic fallacy came to life with dramatic thunder claps outside the court room as defence lawyer Edward Greenspan grilled Livent’s former senior vice-president of finance in the criminal fraud trial of Livent founders Myron Gottlieb and Garth Drabinsky.

Thunder punctuated Messina’s answers as Greenspan the lawyer representing Drabinsky grilled her about differences between her testimony and that of Gordon Eckstein, Livent’s former senior vice-president of finance. The biggest clap came as Greenspan quizzed Messina about the differences between Eckstein and Drabinskys penchant for verbally abusing Livent employees.

“You hated (Eckstein),” Greenspan said. “No, I wouldn’t use that word. He was pretty nasty. They don’t come much worse in a professional environment,” Messina said as thunder rolled through the courtroom.

Greenspan went on to quote Messina’s earlier testimony to the RCMP where she called Drabinsky a “creative genius,” and therefore cut him more slack when it came to his abusive behavior. “You respected him for what he was,” Greenspan suggested. “Initially, I did, yes,” Messina replied. Thunder rocked the room again.

But through his questions, Greenspan is trying to convince Justice Mary Lou Benotto that Messina’s previous testimony that Garth Drabinsky and Myron Gottlieb are the real architects of the fraud that ultimately destroyed Livent is the real fallacy. Drabinsky and Gottlieb have both pleaded not guilty and maintain the fraud if there even was one was committed by Eckstein without their knowledge or approval. Whether Benotto is buying Greenspan’s contention that Messina’ss testimony is a fallacy, or whether she thinks the lawyer’s acussations are merely pathetic is anyone’s guess.

In an effort to discredit both Messina and Eckstein, Greenspan highlighted differences between the testimonies of the two former Livent accountants. Eckstein has been described as an arrogant and tyrannical bully whose wild mood swings led many in the office to describe him as “Sybil,” after the character in the film of the same name who suffered from multiple personalities disorder. In his earlier testimony, Eckstein was accused of attempting to woo Messina by sending her flowers, switching her tickets to Livent shows so that she sat next to him and in contrast, throwing a clock at Messina in one violent outburst. Eckstein denied all the allegations, while Messina maintains they occured. “Mr. Eckstein swore to tell the truth and he said the clock incident never happened. You swore to tell the truth and you said it did,” Greenspan said. “Between the two of you someone is making it up.”

“I know it happened sir,” Messina replied.

Greenspan went further, calling Eckstein a “nut bar” and portrayed Messina as a liar when she testified that she hoped Eckstein would help to stop the alleged fraud. “I’m going to suggest to you that you are an outright liar,” Greenspan said. “It doesn’t make sense you placed all your hope on Mr. Eckstein, a man you couldn’t trust at all.”

Messina also changed her story when speaking to different bodies investigating the collapse of the theatre company, in an effort to downplay her own guilt and play up the guilt of Drabinsky and Gottlieb, Greenspan suggested. “You managed to spin a story so you had officials of a public company keeping you on as CFO where no responsible public company would keep you on.”

“They knew what I did,” Messina replied.

Messina ultimately blew the whistle on the accounting fraud at Livent in August, 1998, when she told new management at the company about millions of dollars in improperly recorded expenses and liabilities buried on the company’s balance sheet. The disclosure led to the firing of Drabinsky and Gottlieb, while Messina was kept on by new management until the U.S. SEC demanded she be fired as part of settlement with the regulator. Since then, Messina has earned about $s325,000 per year working Ernst and Young, the receiver handling the Livent bankruptcy, and Stikeman Elliot, the Toronto law firm currently suing Drabinsky, Gottlieb and former Livent auditors Deloitte and Touche.

Greenspan suggested that Livent managers continued to support her since she was going to be their main witness in the lawsuits. Greenspan referred to letters of support written by Livent managers Robert Webster, Roy Furman, and Stikeman Elliot lawyers that were filed in 2000 with the Institute of Chartered Accountants of Ontario as part of the disciplinary hearings against Messina. “It’s quite remarkable how many friends you have in high places,” Mr. Greenspan noted after reading from the letter. “You weaved a story to the company who knew you were going to be its star witness.”

Greenspan spent a considerable amount of time quizzing Messina, who worked as Livent’s auditor at Deloitte and Touche before joining the company in 1996, about why she did not tell her former accounting firm colleagues about the alleged fraud at Livent. It would have been easy to do since Messina was friends with and had even dated Aaron Glassman, a Deloitte accountant and former lead client services partner on the Livent account while she worked at Livent. “You could have told him during pillow talk,” Greenspan said.

Glassman testified at the Livent preliminary hearing that he dated Messina until November 1997 a period when she was fully aware of the alleged Livent fraud. However, Messina maintained that Glassman misspoke and that their romantic relationship ended in September 1996, long before she knew about the fraud. “It is so obvious that I was dating Mr. Glassman in 1996, it was not possible that I was dating him in 1997,” Messina shot back. “I could have told him (about the fraud) but I didn’t. I wish I had.”

We could have used some thunder after that answer.