By: John Gray

If asked to name a famous Canadian defence lawyer, top of mind would be Eddie Greenspan. The august lawyer has defended some of Canada’s most famous defendants and has a reputation as one of the sharpest criminal lawyers practicing. Today, Greenspan showed why he’s earned that reputation with a dramatic and blistering cross-examination of Chris Craib in which the lawyer relentlessly attacked the former Livent controller as a liar whose testimony could not be trusted.

In cross-examination yesterday, Greenspan accused Craib of lying to the U.S. Securities and Exchange Commission (SEC) and conspiring with Maria Messina, Livent’s former chief financial officer, to invent testimony that would reduce her responsibility for the alleged fraud at Livent. Again and again Craib denied discussing Messina’s testimony (which occurred 10 years ago to the day) with her before he was interviewed by U.S. regulators, repeating over and over that he could not recall any specific conversations with Messina about what she told the SEC.

But today, Greenspan confronted Craib with his own words from a transcript of his interview with SEC investigators in which he admitted to speaking with Messina – albeit briefly – about her testimony.

“Is that true,” Greenspan asked.

“Yes,” Craib replied.

“Because if it’s true you spent an awful lot of time lying yesterday,” Greenspan said. “If it’s true then what you said yesterday was a pack of lies.”

“I always testify to my memory and I always testify truthfully,” Craib responded.

According to the SEC transcript, Craib called Messina the day before his SEC testimony to ask her about the first time they both knew about the alleged financial manipulations at Livent. Neither Craib, nor Messina, could remember the exact date and had been trying to reconstruct their memory by examining company documents. They both felt that they learned about the irregularities in Nov. 1997, but that date was contradicted by an Aug. 1, 1997 “executive financial summary” that Craib produced that clearly showed the alleged financial manipulations, he said.

Craib gave the August document to the SEC, but continued to maintain that he felt he did not learn about the irregularities until November. That November date is important because it is also the date Messina told the SEC she learned about the irregularities. It is also after an important US$125 million bond issue Livent sold to investors. Had the SEC suspected Messina knew about the alleged fraud prior to that sale of bonds, she could have faced prosecution for her role in the sale, Greenspan insisted.

“I’m going to suggest to you this was pure collusion,” Greenspan said.

“No sir,” Craib responded.

Destroying Craib’s testimony is of vital importance to the defence lawyers. Craib is a key prosecution witness since he was the chartered accountant who produced many of the important “executive summaries” of the company’s quarterly and year-end financials that clearly showed how Livent’s financial results were being allegedly manipulated. Craib also testified that he attended a management meeting in April 1998 where he witnessed Livent founder Garth Drabinsky openly talking about manipulating the company’s financials. Ultimately, both Messina and Craib did tell U.S. regulators and prosecutors they learned about the irregularities earlier than November. As part of a plea-agreement with U.S. prosecutors, Messina did admit to knowing about the alleged fraud prior to that bond offering.

Even with the clear hit against Craib’s credibility, Greenspan couldn’t help but add a twist of sarcasm.

“This makes you a liar,” he said.

“No, it does not make me a liar,” Craib responded.

“Did someone teach you that when you are in difficulty you say ‘I was truthful then and I’m truthful now?’” Greenspan asked.

“No,” Craib replied.

“Did Maria Messina teach you that?” Greenspan asked.

“No.”

“How am I supposed to believe that? Because you say it?”

“Yes,” Craib said.

Craib said that he had no motive to lie, but Greenspan quickly retorted that he was a defendant in a multi-million civil lawsuit filed by Drabinsky and Gottlieb and so had many motives to lie.

“It’s not a motivation,” Craib replied. “What happened, happened and I can only testify to that.”

And that’s not the only time that Craib “lied,” Greenspan insisted.

During his testimony in a civil action brought by Livent against company founders Garth Drabinsky and Myron Gottlieb, Craib told lawyers that he had mentioned the financial irregularities at Livent in June 1998 to Christine Thomlinson, a lawyer he hired to act in an employment action he had considered filing against his boss, Gordon Eckstein. But there is no mention of financial fraud in Thomlinson’s notes and she testified at the Livent preliminary hearing in 2005 that she did not remember Craib mentioning anything about fraud.

“You say under oath that you discussed financial irregularities with Thomlinson,” Greenspan said. “She says she has no idea what you’re talking about. She says all you talked about was leaving Livent. There was never any talk about financial irregularities…nothing about seeing some meeting and witnessing Garth Drabinsky directing some fraud.”

“If that’s her memory, I accept that,” Craib said.

“It’s not in her memory, it’s not in her notes,” Greenspan continued.

“At the end of the meeting I mentioned it, but it was very short,” Craib said. He went on to explain that while he could not recall the exact words he used with the lawyer, he had told her that he witnessed “something bad” at Livent. “I may not have said enough.”

“You embellished…an event that never happened,” Greenspan said.

“I don’t accept I embellished,” Craib said.

Craib told Thomlinson he was worried he might be fired after his boss Gordon Eckstein, Livent’s former senior vice president of finance and administration, began a campaign of harassment against the accountant. Eckstein had complained about Craib’s work, “slandered” him to other Livent executives, and openly speculated about his sexual orientation. And while Craib’s meeting with Thomlinson was less than two months after he says he witnessed Drabinsky openly discussing manipulating Livent’s financial results, he told the lawyer that – aside from Eckstein – he enjoyed working at Livent.

“Take Gord [Eckstein] out of it and you liked it,” said Greenspan.

“I existed almost in two worlds,” said Craib, who went on to explain that while he continued to be worried about Livent’s accounting irregularities, he did also enjoy many aspects of his job.

“What do you mean you existed in two worlds? Are you another Sybil?” Greenspan said, making reference to the name many in the accounting department – including Craib – used to describe Eckstein’s seemingly split personality.

And there may be more problems to come for Craib. During their examination of Craib, prosecutors produced a copy of a memo Craib wrote shortly after that fateful meeting with Drabinsky in which he discussed alleged accounting manipulations. However, the original version of that memo appears to be missing from the crown’s documents, the court heard in submissions at the end of the day.

Greenspan told the court he wanted to examine the document to see it the date had been altered. The date of the meeting has been one of the most contentious points of the trial. Craib testified that the meeting occurred on Friday April 24—although the memo is dated “Friday April 23.” The defence contends that the meeting could not have occurred since Drabinsky was travelling out of the country until late Friday afternoon. “We need to look at the original to see if it can shed some light on this issue,” Greenspan said.

Brian Greenspan, the lawyer representing Myron Gottlieb, has made his own request for original documents of memos written by Maria Messina. Those memos are also not immediately available and not in the possession of the RCMP, crown prosecutor Robert Hubbard told the court.

The document may be among the files of Les Wittlin, a lawyer who briefly represented all five members of Livent’s finance department who have testified at the trial, before the accountants were ordered by U.S. regulators to obtain separate lawyers. Wittlin has since left the law firm he worked for during the time he represented the accountants and has told the RCMP he is “disinclined” to go through his old files looking for the document. In submissions about the document, Madam Justice Mary Lou Benotto told the crown that perhaps the RCMP could contact Witlin again and explain that he should either go through his files or come to court to explain himself.

When Greenspan was not accusing Craib of lying, he did briefly touch on an intriguing line of questioning that raises the possibility that either Drabinsky or Gottlieb could ultimately take the stand and tell their story.

Greenspan briefly asked Craib about the justifications Eckstein made for some of the alleged “arbitrary” accounting manipulations at Livent. In particular, alleged manipulations involving advertising. Previous witnesses have testified Livent managers routinely ordered millions of dollars in advertising expenses to either be capitalized to fixed assets or moved to future quarters, thus improving the company’s bottom line.

“Gordon Eckstein made specific arguments for advertising,” Greenspan suggested. “Deferring advertising expense to future periods can be justified if you can demonstrate that the advertising benefits future periods.”

“You would have to analyze the circumstances and the company’s accounting policies,” Craib replied.

Greenspan insisted that this was a “technical question” that should be “addressed by accountants and not by business executives.”

“I don’t agree with that,” Craib replied.

“You don’t have any experience as a business executive,” Greenspan said. But Craib responded that he is an executive now. After leaving Livent, Craib became employed as chief financial officer of a private company.

Eckstein testified that he ordered the accounting staff to allegedly manipulate Livent’s books, based on orders from Drabinsky and Gottlieb. And while the defence insists that Eckstein was acting alone, there has not been any direct evidence to suggest Eckstein was telling Drabinsky and Gottlieb that everything he was doing was proper. Does that mean we will eventually see Drabinsky or Gottlieb on the witness stand to tell the judge Eckstein was rationalizing those allegedly fraudulent accounting maneuvers? We’ll have to wait and see.

In the meantime, Craib is expected to remain on the witness stand for some time.

The trial continues tomorrow.