shades, light detail
By Al Lewis, Staff Columnist
Friday, April 6, 2007
reclusive billionaire Phil Anschutz remained famously reclusive
in federal court Thursday.
He slipped into the courthouse before 6:45 a.m., avoiding news
photographers who arrived too late to capture his entrance. He
remained out of sight until he was called to the stand about
9:40 a.m. in the insider-trading trial of former Qwest chief
executive Joe Nacchio.
The shadowy Qwest founder, who hired Nacchio in 1997, strode
into the courtroom jiggling a bottle of water, looking scrappy
and fit despite his graying hair and 67 years. Once on the
stand, he became as bland and diminutive as a billionaire could
possibly be -- except for the red power tie around his neck.
Anschutz's direct testimony lasted less than 15 minutes. His
cross-examination lasted about 30 minutes.
Nacchio's case is going so well, he doesn't really need Anschutz
to step up for him. But Nacchio's lawyer, Herbert Stern, had
promised the jury they would hear from Anschutz, which was
probably why he was there.
In the past, Anschutz wasn't there. In the fall of 2002,
telecom executives -- including Nacchio -- were dragged before
Congress en masse to explain how they got so rich as their
companies imploded. Anschutz -- who by now has made about $3
billion from his investment in Qwest -- was unconventionally
permitted to answer these questions by phone.
Not Thursday. There he was. The wizard from behind the
curtain, and every bit as disappointing as the one from Oz. In
a monotone, Anschutz told the court how he built Qwest from
railroad rights of way and hired Nacchio to run it.
Defense attorney John Richilano seemed most interested in asking
Anschutz about a meeting Anschutz had with Nacchio in December
2001 after Nacchio's son attempted suicide.
"He was quite agitated by it," Anschutz said. "In fact, he
broke down in tears. ... He then said, 'Phil, I want to resign.'
... I was quite surprised at the news of his son and was further
surprised ... that he would want to resign from the company."
"An improved state of mind"
To keep Nacchio from leaving, Qwest's board offered him a raise,
a bonus and 5 million more stock options.
A couple of weeks after their initial conversation, Nacchio
"seemed to be in an improved state of mind," Anschutz said.
I'm not sure what this testimony does for Nacchio's case. Does
it mean Nacchio was so disturbed about his son that he needed to
quit, but then Qwest offered him more stock options, so he
Anschutz was Qwest's founder and sat on the board with two
employees of his investment company. But I have never heard
Anschutz take responsibility for what happened there. Maybe
it's because he can't. There are too many lawyers out there
ready to pounce on his every word. Thursday would be no
On cross-examination, Anschutz reminded the court that he was
the "nonexecutive chairman of the board." What did that mean?
"I had no salary, and I had no incentives, and I had no duties.
It was really ceremonial," he told the court.
Qwest turned out to be a ceremony that parted thousands of other
investors from their money. In the end, nobody made more dough
from Nacchio's tenure as CEO than Anschutz.
There are so many questions we would like answered by the wizard
of Qwest -- such as his take on the insider-trading issues at
stake. But rules of procedure allowed prosecutor Cliff
Stricklin only to inquire about Anschutz's testimony.
"Your Honor, we're now going way beyond the scope. Direct
examination was very limited," defense attorney Richilano said
in one of his objections during Stricklin's questioning.
Stricklin got Anschutz to tell the jury that it was Nacchio who
ran the company and that it was Nacchio who decided what to tell
Wall Street -- facts that won't help Nacchio but serve to
further extricate Anschutz from the mess.
Other than that, Anschutz hardly had to say a thing. Soon, the
reclusive billionaire was out the door, dark sunglasses hiding
his eyes. Several suited men, most likely his lawyers, escorted
him to a silver Audi station wagon, making camera angles
difficult, though not impossible, for news photographers.
For a brief time, the wizard was not behind his curtain. And he
told us nothing.
Al Lewis' column appears Sundays, Tuesdays and Fridays.
Respond to him at denverpostbloghouse.com/lewis, 303-954-1967 or