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Feds to list witnesses in Nacchio trial
By Andy Vuong, Staff Writer
Denver Post
Wednesday, February 28, 2007

Federal prosecutors will produce for the first time Thursday a list of witnesses they plan to call during the criminal insider-trading trial of former Qwest chief executive Joe Nacchio.

U.S. District Judge Edward Nottingham has ordered the government to compile the list for the defense.  It's unclear whether it will be made public.  The defense has to submit its witness list by March 16.

James Payne, former senior vice president of Qwest's Government Systems Division, said Tuesday that he expects to be called to testify during the trial, which is set to begin March 19 in federal court in Denver.

"I'm involved on both sides of the case," Payne told The Denver Post in a phone interview from Washington, D.C.  "I'll be subpoenaed by one side or the other, and perhaps both."

Payne joined Qwest in August 1999 and worked directly with Nacchio on government contracts, including those with clandestine agencies that may play a key role in Nacchio's defense.

Former Qwest chief financial officer Robin Szeliga, former Qwest president Afshin Mohebbi and former board member Tom Stephens could be key witnesses for the government.

Payne is the first former Qwest official to publicly disclose that he expects to be involved during the trial.  Payne said he has been contacted by prosecutors and defense attorneys a number of times.  Court filings suggest he may be more helpful to the defense.

Asked whether he expects to play a big role in the case, Payne said: "I don't think I have a choice."

Payne has verified Nacchio's contention that potential classified contracts were not included in Qwest's public statements about its prospects, according to court filings by Nacchio's attorneys.  Specifically, in a November 2005 interview with the government, Payne said he did not include the contracts in his financial reports until they came to fruition because he saw them as speculative.

According to a separate court filing, Qwest received $200 million in 2000 and $322 million in 2001 in federal contracts, which represented about 1.5 percent of its overall revenue.

Payne left Qwest in May 2005 and now works for Bechtel, a government contractor based in San Francisco.

Although the Department of Justice hasn't disclosed its witnesses, it has compiled a list of people who are not allowed to be interviewed by attorneys in a separate Securities and Exchange Commission civil case that's pending against Nacchio and several former Qwest officials.

The government doesn't want these people interviewed in the civil case because they could be called as witnesses in the criminal case.

The list has 28 names, including Szeliga, Mohebbi and Stephens.  The list hasn't changed since it was disclosed in court filings last year, said Forrest Lewis, attorney for former Qwest accountant Frank Noyes, a defendant in the civil case.

The SEC alleges in the civil suit that former Qwest officials fraudulently boosted revenues by $3 billion from 1999 to 2002.  Qwest later restated much of that revenue.

Staff writer Andy Vuong can be reached at 303-954-1209 or avuong@denverpost.com.

What's ahead  -  Key dates in the criminal insider-trading case of former Qwest chief executive Joe Nacchio:

-  Thursday: Deadline for prosecution to file its witness list;  hearing on remaining pretrial matters
-  March 9: Conference to update unresolved issues in the case
-  March 16: Deadline for defense to file its witness list
-  March 19: Trial is to begin

http://www.denverpost.com/business/ci_5318150