wants to use Nacchio testimony
By Jeff Smith
Rocky Mountain News
Thursday, December 22, 2005
Former Qwest executive Marc
Weisberg, who goes to trial Jan. 3 on money laundering and
wire fraud charges, wants to submit as evidence excerpts of
testimony provided by former Qwest CEO Joe Nacchio to
federal regulators last year. Weisberg, a former executive
vice president, is accused of defrauding Qwest by funneling
low-priced stork from vendors to his personal accounts.
According to court documents filed this week by Weisberg's
attorney Stephen Peters, Nacchio told the Securities and
Exchange Commission in May 2004 that to the best of his
recollection Weisberg didn't pressure vendors into
allocating the stock in exchange for Qwest's business.
"No, but I mean in the negotiations, when you're negotiating
across the table on a deal and there's all kinds of things
on the table, I just know how Marc negotiates," Nacchio
testified to the SEC. "He's a very good negotiator but ...
I have no recollection of Marc making that a prerequisite
for doing a deal."
Nacchio's testimony is "critical to the just disposition of
Weisberg's case," Peters argued in the motion.
Peters said Nacchio isn't available as a witness because he
has been indicted on insider trading charges and plans if
necessary to invoke his Fifth Amendment right against
self-incrimination if he's called in the Weisberg case.
Jeff Dorschner, spokesman for the U.S. attorney's office in
Colorado, declined comment Wednesday, noting that the
government will file its response later.
Nacchio testified that Weisberg was the "point person" for
the vendor-stock deals but "needed some guidance" on the
best way to handle the situation so it wasn't
controversial. At the time, it was relatively common in the
overheated telecommunications industry for vendors to offer
initial public offering stock to potential customers.
Nacchio, who also received some allocations, said he told
Weisberg it would be best for the shares to be granted only
to senior executives because they typically don't select
"Look, we have a pretty strong conflict-of-interest policy
that says you've got to recuse yourself from a decision if
you're invested in a company," Nacchio testified. "Very few
of these technology decisions .... are made by the
Nacchio also maintained that receiving the stock wasn't
necessarily a perk because it required the executives to pay
for the stock at the IPO price and "if we guess the market
wrong at any time, you lose your own money as we've
demonstrated on several of our investments."
Many of the stock, however, soared in price during the
period before the telecom industry weakened.
Separately, Nacchio agreed in 2003 to give $400,000 to two
law schools to settle charges by New York Attorney General
Eliot Spitzer that he improperly made more than $1 million
from lucrative IPOs doled out by Citigroup's Salomon Smith
Barney as in inducement and reward for Qwest's investment