Nacchio jury goes home
By Andy Vuong and Tom McGhee, Staff Writers
Thursday, April 5, 2007
The insider-trading trial in federal court of former Qwest CEO
Joe Nacchio concluded its third week of testimony around noon
today, with only one more witness scheduled to testify for the
The trial was expected to take seven to eight weeks. But U.S.
District Judge Edward Nottingham told the jurors before excusing
them for the rest of the week that the trial could finish next
week. The jury returns Monday.
On the issue of whether Nacchio will take the witness stand in
his own defense, Nottingham gave Nacchio's lawyers until 5 p.m.,
Saturday, to tell him if Nacchio will testify. The jury was
dismissed early in order to allow time for the defense team to
turn over documents on Nacchio's stock trades to prosecutors.
remaining witness listed by defense lawyers to
testify is law professor Daniel Fischel, who is scheduled to
testify Monday. Fischel has testified for defendants in a
number of high-profile cases, including the Enron case.
Nottingham was visibly annoyed that the defense wants more time
to decide whether to put Nacchio on the stand.
Prosecutors wanted Nottingham to tell Nacchio's lawyers to make
the decision over the lunch hour today.
"In every trial there comes a decision whether the defendant is
going to testify. They should be required to make that decision
over the lunch break," Assistant U.S. Attorney Cliff Stricklin
told the judge.
Nottingham replied that the defense will call him by 5 p.m.,
Saturday, with a decision.
Earlier this morning, business mogul Philip Anschutz, who hired
Joe Nacchio in 1996 to head the company that became Qwest
Communications, testified about an emotion-laden meeting in 2001
where a tearful Nacchio told him he wanted to quit because his
son had tried to commit suicide.
But Nacchio never left after he was given an additional 5
million stock options, a salary increase and increased bonuses,
Anschutz said under cross-examination by federal prosecutors.
Anschutz was the first witness for the defense in Nacchio's
insider-trading trial this morning in federal court in Denver.
"The compensation comittee certainly wanted to keep Mr. Nacchio
as CEO and they had come up with a plan to incent Mr. Nacchio to
stay," said Anschutz, who founded Qwest.
Nacchio did take some time off and returned home to his family
during the period in 2001, Anschutz said.
Anschutz said he first contacted Nacchio at the suggestion of
investment bankers after he told them that he wanted to take his
fibre-optic cable company, SP Telecom, later named Qwest,
public. It was 1996 and he had invested or committed to invest
about $1 billion in the company, which was laying fiber along
railroad rights-of-way he owned.
Anschutz at one time owned the Southern Pacific and Rio Grande
railroad companies, and had served on the board of directors of
the Union Pacific Railroad.
Saloman Brothers analyst Jack Grubman told him that Nacchio,
then at AT&T, had the experience needed to build and run the
communications company, which later merged with the Baby Bell
"He was good and he was also bright," Anschutz said of Nacchio
in a halting voice tinged with a Western accent.
Nacchio negotiated a $600,000 annual salary, stock amounting to
3 percent of the company's $1 billion value at the time, and
received $11.3 million to leave AT&T. Nacchio also asked to
have Qwest headquarters be located in New Jersey in order to be
close to his family.
Anschutz kept the company in Denver but allowed Nacchio to have
an office in New Jersey, commuting to Denver for four-day weeks
and travelling home for three-day weekends.
Anschutz spent about 45 minutes on the witness stand this
On Wednesday, federal prosecutors rested their case after
questioning 20 witnesses over 10 days.
After the prosecution rested, defense attorneys filed an almost
routine motion for acquittal, which U.S. District Judge Edward
This morning, Nottingham also denied defense motions for a
mistrial connected to what they termed "prejudicial" testimony
from two government witnesses.
Nottingham, however, did strike testimony from Qwest shareholder
Sally Anderson and granted the defense's motion to redact a
document connected to testimony from David Weinstein, Nacchio's
former financial adviser.
The defense said its case may take a day and a half, not
including whether or not Nacchio will testify.