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Judge says Nacchio team can see rebuttal evidence
Joe Nacchio is expected to base defense on U.S. security.
By Jeff Smith
Rocky Mountain News
Thursday, January 25, 2007

A Denver federal judge has ordered prosecutors to produce immediately the evidence they intend to use to rebut Joe Nacchio's possible national security defense.  Two legal experts said the ruling will benefit Nacchio's defense team, allowing it to see whether the government has some hidden ammunition and make adjustments in strategy if necessary.

The experts said the ruling also reflects U.S. District Judge Edward Nottingham's desire to ensure that Nacchio, Qwest's former chief executive, is treated fairly and to minimize grounds for a mistrial or an appeal if he is convicted.

"Through this ruling, the defense will gain added insights into the arsenal of evidence that the government maintains," said Chris Bebel, a former federal prosecutor in Texas.

Jeff Dorschner, spokesman for the U.S. attorney's office for Colorado, declined to comment on the ruling.

Nacchio faces 42 counts of insider trading in connection with selling $101 million of stock during the first five months of 2001.  His trial is scheduled to start March 19 and last up to 7 1/2 weeks.

Prosecutors allege that Nacchio accelerated his stock sales while aware that Qwest's financial condition was weakening.

Nacchio's attorneys have argued that Nacchio, based on classified information, believed the Denver telco was going to be awarded hundreds of millions of dollars in government contracts.  Those potential deals offset his concern about warnings he was receiving about the company's finances from other Qwest executives, they say.

Prosecutors and Nacchio's attorneys have spent many hours in closed-door hearings wrangling over which classified evidence is relevant and how it should be summarized and heard by a jury.  Prosecutors had argued that they shouldn't be required to produce rebuttal evidence before trial.

"Because of the extremely sensitive nature of this evidence, the judge has done everything possible to promote the odds that the defendant will receive a fair trial," Bebel said.  "He's opted to take this unduly cautious step to minimize the odds that a legal quagmire will develop midstream that might force him to declare a mistrial."

Craig Silverman, a former Denver prosecutor, said it's a good ruling for a defense that understandably would be worried that the prosecution "may be holding some hidden card that undermines their defense."

Bebel said the government will struggle to predict all of the rebuttal evidence it may use.  But he also noted "rebuttal evidence usually is narrow and thin and doesn't play a big role in most criminal trials."  Still, prosecutors could try to get in other rebuttal evidence during the trial.

If Nacchio abandons his national security defense, that could be telling about the strength of the government's rebuttal evidence, experts said.

The case

Former Qwest Chief Executive Joe Nacchio will go on trial March 19 on 42 charges of insider trading in connection with selling more than $100 million of stock.  Nacchio denies wrongdoing and says he was optimistic because he had classified information about government contracts he expected the company to land.

Key dates

  Friday:  Status conference

March 1: Pretrial hearing

March 19: Trial begins or 303-954-5155,2777,DRMN_23910_5303317,00.html