Nacchio puts blame on ex-counsel
Fighting the conviction of the ex-CEO, his lawyers say Qwest's
general counsel should have kept Joe Nacchio better informed.
By Andy Vuong, Staff Writer
Wednesday, July 25, 2007
Former Qwest chief executive Joe Nacchio is pointing the finger
at Drake Tempest, the company's former general counsel who often
commuted by private jet with Nacchio from the East Coast to
Denver when the two worked together.
Attorneys for Nacchio, who is to be sentenced Friday for illegal
insider trading, said in a filing this week that Nacchio did not
know the risk that Qwest would miss financial targets was
material information and that it was Tempest's responsibility to
tell him so.
Tempest "was intimately apprised of Qwest's financial
performance and the specific information at issue here,"
Nacchio's attorneys wrote in a filing requesting bail pending
appeal. "As general counsel, he also managed the trading
windows, and there was testimony that it was Tempest's duty to
close the trading window if there was material nonpublic
information barring insiders from trading."
The filing states that "Tempest knew exactly what Nacchio knew.
... Yet Tempest never closed the trading window, never advised
the company to change its public disclosures, and, as far as the
evidence showed, never told insiders not to trade."
Tempest's name was raised as part of the defense's argument that
there was insufficient evidence to convict Nacchio.
"I don't have any comment on that," Tempest's attorney James
Nesland said Tuesday.
Tempest showed up on three pages of the 59-page filing.
Tempest, who worked for Qwest from 1997 to 2002, was never
charged by the federal government in its years-long
investigation of the company's former executives.
He was on the government's "may call" witness list in Nacchio's
month-long criminal trial, but wasn't called.
Nacchio was convicted in April on 19 counts of illegal insider
trading connected to his sale of $52 million in Qwest stock in
April and May 2001. Prosecutors showed that he had material,
nonpublic information that Qwest was struggling when he made
those trades. The government has recommended that Nacchio serve
87 months in prison, pay $19 million in fines and forfeit $52
million in ill-gotten gains.
To secure bail pending appeal, Nacchio's attorneys have to show
that their appeal will raise a substantial question of law or
fact that will lead to a reversal of the verdict or a new trial.
Along with the insufficient evidence argument, Nacchio's
attorneys said in the filing that they plan to raise issues
about jury instructions, the exclusion of defense expert
testimony and rulings connected to Nacchio's
Staff writer Andy Vuong can be reached at 303-954-1209 or