Former Qwest chief executive Joe Nacchio may call Qwest founder Philip Anschutz to the stand in Nacchio’s insider-trading trial, an attorney for Nacchio said Monday.
Anschutz is one of at least 18 witnesses Nacchio’s attorneys might call during the trial, which began with jury selection Monday. The list includes a Catholic abbot, Nacchio attorney Herbert Stern said. He may be a character witness for Nacchio.
Other former Qwest officials on Nacchio’s potential witness list are chief financial officer Robert Woodruff, executive vice president of marketing Stephen Jacobsen and general counsel Drake Tempest, who also may testify for the government.
Lead prosecutor Cliff Stricklin said Monday that the government could call more than 40 witnesses, including former Qwest board members Craig Slater and Tom Stephens. Former chief financial officer Robin Szeliga and former president Afshin Mohebbi, also on the prosecutors’ list, are expected to provide key testimony for the government.
The lists were read by attorneys for each side during a long day of jury selection. That process will continue today.
Nacchio faces 42 counts of criminal insider trading that carry maximum sentences of 10 years each, though the terms would likely be served concurrently if Nacchio is convicted. He has pleaded not guilty.
The government alleges he sold $100.8 million shares in early 2001 when he knew the company had big financial problems that weren’t publicly disclosed.
Anschutz, who hired Nacchio in 1997, had been considered a potential witness for either Nacchio or the government. He could testify about board communications and directives concerning Nacchio’s stock sales. He also might have knowledge of Qwest’s classified contract work.
A Nacchio representative declined to comment.
Just because people’s names were mentioned as potential witnesses doesn’t mean they will actually testify. A lawyer representing one of Nacchio’s potential witnesses said he had not discussed testimony with Nacchio’s lawyers and did not expect his client to be called.
Many, though not all, of the potential witnesses are former Qwest employees.
“They clearly are trying to tell two different versions of what happened internally,” said University of Denver law professor and securities expert Jay Brown, who is working as a paid consultant for The Denver Post.
At least two of Nacchio’s witnesses worked closely with him on classified government contracts. Nacchio’s attorneys have said he was optimistic about Qwest’s prospects in early 2001 because he was aware the company was in line to receive secret government contracts.
“He says no one else at Qwest knew about it,” Brown said. “He needs people with knowledge of those contracts to testify about it, or he himself is going to have to testify about it.”
Brown said Tempest could be a key witness because he likely counseled Nacchio on key decisions, but it’s unclear who will benefit from his testimony.
“At the end of the day, he’s going to be better for one side than the other,” Brown said.
Slater and Stephens could testify about Nacchio’s compensation and about what he may have known and shared with the board about looming problems in early 2001.
Slater was on the board’s compensation committee. Stephens headed Qwest’s audit committee and identified problems in a swap of fiber-optic capacity.
“This one stinks,” he wrote in a note in April 2001. Stephens went on to push for an internal investigation that led Qwest to restate revenues of $2.5 billion for 2000 and 2001.
Staff writer Greg Griffin can be reached at 303-954-1241 or ggriffin@denverpost.com.
