Ex-Qwest accountant seeks right to fully question regulators
By Sandy Shore, AP Business Writer
Saturday, December 8, 2007
Qwest Communications accountant accused in a civil fraud case
should be granted full access to question federal regulators
about evidence against him, his attorney argued Friday.
The Securities and Exchange Commission's request for a court
order to limit questioning is premature since witness interviews
haven't occurred, said attorney Kevin Evans, who represents
"The SEC filed suit against Mr. Kozlowski," Evans wrote in a
U.S. District Court brief. "The SEC cannot now hide
behind the shield of deliberative process to prevent Mr.
Kozlowski from discovery materials that the SEC has placed at
Kozlowski is one of five former Qwest Communications
International Inc. executives, including ex-CEO Joe Nacchio, who
are accused of creating a financial fraud that nearly forced the
Denver-based telecommunications company into bankruptcy.
Last month, SEC attorneys asked for the order to limit questions
that Kozlowski's attorneys could ask about communications they
say are protected from release during the evidence-gathering
In his court brief, Evans contended the SEC has not detailed the
reasons it should be awarded such an order. He also argued
that Kozlowski's need for the information is more important than
protecting the SEC's process.
The SEC has said actions of Qwest executives between April 1999
and March 2002 paved the way for Qwest to improperly report
approximately $3 billion in revenue that helped seal its 2000
acquisition of former Baby Bell U S West. Qwest later
restated $2.2 billion in revenue.
The SEC wants repayment and civil penalties with amounts to be
determined at trial. No trial date has been set.
Other defendants are former finance chief Robert Woodruff,
former President Afshin Mohebbi and former accountant Frank T.
In April, Nacchio was convicted in a separate criminal trial of
19 counts of insider trading stemming from the sale of $52
million worth of stock in 2001 at a time when he knew the
company was at financial risk but didn't tell investors.
Nacchio was sentenced to six years in prison but remains free on
bond pending an appeal.