The Association of U S West Retirees



Meter running on Nacchio trial costs
By Sara Burnett and Jeff Smith
Rocky Mountain
Wednesday, March 19, 2008

As the case of U.S. v. Joe Nacchio goes on and on, each side's legal bills just keep going up and up.

No one is saying what the tab is so far for either side or what the final tally could be in light of an appellate court decision to reverse Nacchio's insider-trading conviction and grant a new trial.

But one thing is certain -- it won't be cheap.

"These cases are tremendously expensive, for both sides," said James Rollin Miller, who heads the litigation group at MoyeWhite law firm in Denver.

Taxpayers are footing the bill for the government's prosecution of the former Qwest CEO, who was convicted last year of 19 counts of insider trading.

Jeff Dorschner, a spokesman for the U.S. attorney's office, said Tuesday the cost to the government isn't readily available.  That's partially because unlike a private law firm, where attorneys bill by the hour, the government doesn't keep track of personnel hours spent on a case.

But legal experts say the cost is probably in the millions of dollars.

Nacchio's bills are likely much higher.

Legal experts put the cost of Nacchio's criminal defense case at tens of millions of dollars.  Qwest paid for the pre-trial and trial expenses because of a contractual obligation to indemnify Nacchio.

Qwest won't comment, but the Denver telco almost certainly will have to pay for Nacchio's legal costs if there's a new trial.

Donna Jaegers, a telecommunications analyst with Janco Partners, said her understanding is that "as long as he hasn't been found guilty, they're still on the hook."

Qwest did balk at paying additional legal expenses once Nacchio was convicted last spring, then worked out a deal not to pay Nacchio's appellate attorney, Maureen Mahoney.

The settlement reserved the right for Qwest and Nacchio to go after disputed legal expenses after the appeals process runs its course.  It's unclear, in light of Monday's reversal, if Nacchio could get reimbursed by Qwest for Mahoney's expenses.

Qwest spokesman Bob Toevs said the company isn't commenting at this point.

Several attorneys from Stern's New Jersey firm, Stern & Kilcullen, worked on the case, as well as the Denver law firm headed by John Richilano.

The New Jersey attorneys traveled frequently to Denver for pretrial hearings, including closed hearings to discuss classified evidence.