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Livent's "horrible" accountant

Lawyers representing Garth Drabinsky and Myron Gottlieb in the Livent criminal fraud trial have one simple goal when it comes to Gordon Eckstein: completely destroy his credibility.

And on the first day of what is expected to be a long and brutal cross examination of Livent’s former senior vice president of finance and administration, Edward Greenspan — the lawyer representing Garth Drabinsky — was pulling out all the stops to portray Eckstein as an abusive, foul-mouthed-manager.

Eckstein allegedly made anti-gay remarks about one employee, sexually harassed another and bullied or threatened his staff into participating in Livent’s alleged accounting manipulations, the court heard. “You are, by nature, a pretty horrible human being,” Greenspan told Eckstein in court earlier today.

Demolishing Eckstein is crucial since he has testified repeatedly about how — on orders from Livent founders Drabinsky and Gottlieb — he fraudulently manipulated Livent’s financial statements to hide mounting company-wide losses. Drabinsky and Gottlieb have both pled not guilty to two counts of fraud and one count of forgery and have maintained that any fraud that occurred at the company happened without their knowledge or approval.

Last year, Eckstein pled guilty to one charge of fraud in Canada and was given a conditional sentence of two years less a day. In 1998, Eckstein pled guilty to one charge of conspiracy to commit fraud in the U.S. He has yet to be sentenced in that case.

Eckstein repeatedly refused to agree with the statements of other Livent employees who described him as so abusive and volatile that he was often referred to as “Sybil,” because of his ability to instantly switch personalities. “No one really knew which personality would come out at any particular point in time,” former Livent CFO Maria Messina told the RCMP during an interview in August 1998, shortly after the collapse of the theatre company. “He could be the nicest, gentlest person one minute and just a vile human being within 30 seconds. I had terrible run-ins with him. The verbal abuse was just unimaginable.”

Greenspan confronted Eckstein with later testimony Messina gave to investigators in which she accused the married Eckstein of making amorous advances towards her. While she admitted that he never touched her or asked her out, he sent her flowers on Valentine’s Day, arranged her to be seated near him at special Livent events and appeared jealous when she had lunch with male colleagues. It wasn’t all flowers and good seats though: Messina once complained that Eckstein threw a desk clock at her.

But if none of Eckstein’s alleged temper was on display in the courtroom as he calmly explained that he merely sent her flowers as a friend, since she had recently separated from her husband. He moved her seats at special events to be near him to ensure she had good seats after she had complained about having lousy seats and both Drabinsky and Gottlieb had instructed him to “keep her happy, and on-side.” He did admit to yelling at her for taking a long lunch, but it wasn’t out of jealousy; it was because she had left the office on the day when she was required to sign cheques for production employees to distribute to the company’s theatre employees. And, for the record, he never threw a clock at anyone, he testified.

Greenspan showed Eckstein a memo from Messina written in April 1, 1998 in which she threatened to quit the company because she could no longer tolerate Eckstein’s verbal abuse. Eckstein denied ever seeing the memo or talking about it with either Drabinsky or Gottlieb. “I admit I was abusive and I had a temper, but it wasn’t constant,” he testified. “If it was that terrible and caustic they were free to leave, they were free to go and talk to Mr. Drabinsky or Gottlieb… No one was chaining them.”

It wasn’t just Messina who complained about Eckstein’s volatile temper. Grant Malcolm, the company’s former production controller, told investigators that Eckstein often berated employees for being “fucking idiots” who were “paid to do what they were told and not to think.” Chris Craib, Livent’s former controller, accused Eckstein of making fun of his homosexuality and threatening his job. Eckstein denied threatening Craib’s job but said anti-gay remarks were often bandied around at meetings with Drabinsky and Gottlieb.

The alleged abusive tenor of management at Livent might provide an insight into why so many accountants turned their back on their professional training and participated in the “widespread accounting fraud” that prosecutors allege occurred at the theatre company. In an interview with the RCMP in 1991 Craib described Eckstein as “Jekyll and Hyde” and when Mr. Hyde appeared: “This side comes out and… it scares you to death and you end up doing things you shouldn’t be doing.”