Perception of Szeliga's
By David Milstead And Jeff Smith
Rocky Mountain News
Friday, June 3, 2005
Robin Szeliga was thought to be one of the good guys. Then the Securities and Exchange Commission's civil suit came out in March.
The regulators' allegations - still unproved - painted a picture of a driven executive who was a willing participant in a "massive financial fraud." The only difference between her and some other top Qwest executives, according to the complaint, was that her stock profits were a fraction of the multimillions they pocketed.
The SEC claims Szeliga received "ill-gotten" gains totaling $1.6 million during the period in question, compared with ex-CEO Joe Nacchio's $216.4 million and the $41 million of Robert Woodruff, Szeliga's predecessor as chief financial officer.
One example of Szeliga's complicity, according to regulators: Qwest's outside auditor, Arthur Andersen, told Szeliga in 2001 to ask the SEC about Qwest's accounting theories. Szeliga refused, supposedly saying: "F--- no. Last time I went to the SEC, I ended up writing off $3 billion" of assets.
Szeliga, 44, came to Qwest in late 1997 after spending a decade as a finance executive at the cable-TV company Tele-Communications Inc., now Comcast.
By then, she had developed a reputation for being intense and sometimes difficult, but also conscientious.
When Woodruff left Qwest suddenly as chief financial officer in February 2001, Nacchio named Szeliga "interim" CFO.
The temporary title came at a critical time - the telecommunications industry had begun to slide and yet Qwest was still trumpeting double-digit revenue growth.
Szeliga was named CFO two months later after Qwest had filed its annual report with federal regulators. The SEC alleges the report provided false and misleading information to investors by failing to disclose how much the company relied on one-time transactions to meet its targets.
(In a court filing this week, Nacchio's attorneys responded by saying there is no factual basis for the SEC's allegation and no accounting requirement to label revenue as "recurring" or "nonrecurring.")
As Qwest fell under civil and criminal investigation in 2002, Szeliga was able to maneuver herself into a relatively favorable light.
Documents released in conjunction with the congressional hearings on Qwest in the fall of 2002 showed Szeliga almost in the role of a "whistle-blower," making efforts in the summer and fall 2001 to rein in Qwest's dependency on questionable swaps of network capacity with other communications carriers.
But not everyone believed that was the full story.
Ken Johnson, a spokesman for the House subcommittee, said after the hearings, "We felt there were a few specific circumstances where she was not being totally forthright with us."
New Chief Executive Dick Notebaert replaced her with Oren Shaffer in July 2002, but Szeliga was retained for another year as an executive vice president before leaving in 2003.
Questions about Szeliga's credibility surfaced again in spring 2004, when federal prosecutors called on her to testify in the criminal trial against four former midlevel Qwest executives accused of inflating revenues.
Szeliga told defense attorneys she wasn't an accounting expert, even though her biography indicated that she was a certified public accountant and had 15 years of experience.