Ex-Qwest VP expected to settle
Former outside auditor also likely to resolve civil charges in SEC cases
By Tom McGhee, Denver Post Staff Writer
Sunday, March 13, 2005
Among those expected to settle civil charges in connection with alleged securities law violations at Qwest are a former Qwest finance officer and a former outside auditor.
Sources close to the matter said Mark Iwan, a former Arthur Andersen auditor who advised Qwest on its financials, and William Eveleth, former senior vice president of finance, have agreed to settle Securities and Exchange Commission charges.
Neither Eveleth nor Iwan could be reached for comment Friday. Eveleth's attorney and a spokesman for Arthur Andersen said they couldn't comment on the matter.
Sources said Friday that Iwan's settlement was expected to be announced in a few weeks. Eveleth's settlement could come sooner.
The SEC is expected to file lawsuits or announce settlements as early as Monday against roughly a dozen former Qwest executives who worked for the company between 1999 and 2002. Those are the years when former Qwest chief executive Joe Nacchio ran the Denver-based phone company and when accounting irregularities are alleged to have occurred.
Nacchio is expected to be sued, as are former president and chief operating officer Afshin Mohebbi, former chief financial officers Robert Woodruff and Robin Szeliga, and former wholesale sales chief Greg Casey, a source said.
The civil actions by the SEC involve a potpourri of claims and aren't identical, the sources said. But all involve claims that the company misled investors about its revenues.
The SEC has in the past sued corporate executives, seeking damages equal to profits those executives made on suspect deals.
Of those who served on Qwest's board during 1999-2002, including Qwest founder Philip Anschutz, only Nacchio will be sued, sources said.
Jeff Dorschner, a spokesman for the U.S. attorney's office in Denver, said Friday that a criminal investigation by his office into Qwest's accounting continues. The Justice Department brought charges against four Qwest executives in 2003, but only one was convicted of a felony.
At the same time the Justice charges were filed, the SEC sued eight Qwest executives, including Eveleth.
One source said the suits will focus on actions similar to those spelled out in an SEC lawsuit against Qwest that the company settled in October for $250 million.
The SEC claimed Qwest was generating "spurious" revenue through swaps or sales of fiber-optic capacity with other telecom companies.
Qwest really did not need the fiber but used the deals to meet financial targets, regulators said.
The SEC actions against Nacchio and the others won't have any impact on Qwest, said Lynn Turner, a former SEC chief accountant based in Denver.
"The impact on the company is zero; the impact on the individuals is something else," he said.
Under Richard Notebaert, who replaced Nacchio as CEO in 2002, Qwest has struggled to remove the taint of the accounting scandal.
Staff writer Tom McGhee can be reached at 303-820-1671 or email@example.com .