The Association of U S West Retirees



Nacchio: Witness excluded at trial was 'heart' of defense
By Jeff Smith
Rocky Mountain News
Tuesday, September 2, 2008

An expert witness excluded from testifying at former Qwest CEO Joe Nacchio's insider-trading trial last year represented the "heart" of his defense, his attorneys argue in a filing.

Nacchio's defense team said expert witness Daniel Fischel has testified more than 200 times, including for the government, and had never been excluded.  They maintain that U.S. District Judge Edward Nottingham didn't notify the defense that they had to prove Fischel's reliability through additional written testimony or by requesting a hearing.

"Every defendant has a right to present a defense, and the concerns about fairness are heightened all the more when these rulings were issued by a judge who said he could 'see no reason why this man (Nacchio), who grew up the son of Italian immigrants . . . in New Jersey and New York, should ever have come out here to Colorado,' " Nacchio's lawyers wrote.

Nottingham's remarks were made at Nacchio's sentencing.

The filing by Nacchio's defense team comes in advance of oral arguments Sept. 25 in front of the full 10th Circuit Court of Appeals.

The court has agreed to consider whether Nacchio's conviction last year should stand.  Nacchio was sentenced to six years in prison, fined $19 million and ordered to forfeit $52 million of stock proceeds.  He is free on $2 million bail.

An appellate panel previously ruled 2-1 that Nottingham improperly excluded Fischel and ordered a new trial.

The government has argued that Nottingham was within his rights to exclude Fischel and that Nacchio's attorneys had "ample opportunity" to establish Fischel's reliability but failed.

Nacchio's attorneys argued that Fischel's testimony would have "unequivocally" contradicted any suggestion Nacchio sold stock based on material information.  Fischel would have testified that investors didn't react negatively when Qwest disclosed in 2001 the amount of revenue from one-time sales and swaps of communications capacity.