AUSWR
The Association of U S West Retirees
 

 

 

Anschutz testimony leaves questions
By David Milstead
Rocky Mountain News
Friday, April 6, 2007

Phil Anschutz testified publicly, under oath, for the first time Thursday about what happened at Qwest.  And many of your questions, and mine, went unanswered.

I hear from people, like the caller Wednesday on Colorado Inside Out, who ask, "Who hired Joe Nacchio, and shouldn't they be held accountable?"

For Anschutz and his people, this matter is settled.  His spokesman, Jim Monaghan, points out, accurately, that the Securities and Exchange Commission and the Justice Department have investigated Anschutz and brought no charges.

The House Energy and Commerce Committee, where Nacchio testified in 2002, said "neither Nacchio nor anyone at Qwest has provided us with any documentation to suggest that Anschutz's role was anything more than he has said it was:  largely ceremonial."

Thursday, Anschutz was asked what his chairman's role was.  "(Nacchio) was chairman and CEO, and I was nonexecutive chairman of the board. . . . And what that meant was that I had no salary, and I had no incentives, and I had no duties.  It was really ceremonial."

He also said:  "In fact, the press has never understood it."

Perhaps I am among the press who he feels misunderstands.

I have resisted embracing the idea that Anschutz was a "ceremonial" chairman -- or, more specifically, the implication that he was detached from important matters at the company.

Qwest's proxy statements make clear that Anschutz's role was "not an executive officer position."  Hence, "no duties."

But this does not mean Anschutz had a passive role in the company.  For years, Anschutz has had a reputation for being a very hands-on executive, focused on the day-to-day operations of his investments.

A March 9, 2005, article in trade publication Editor & Publisher about Anschutz's foray into the newspaper business quotes the editorial page editor of the Washington Examiner describing a 90-minute interview he had with Anschutz.

Anschutz, David Mastio said, was "stone-faced and very intense.  He seemed like he was trying to make me nervous, make me question myself.  He asked a lot of questions like 'Why do you want to do that?' and 'Why would that work?'  He was very probing."

The Washington Examiner is Anschutz's private concern, and Qwest became a public company.  There's a difference there.  But Qwest's proxy statements show Anschutz was an active board member, with he and his employees filling key roles.

The 2001 Qwest proxy notes that he chaired the board's executive committee, which "exercise(s) all the powers and authority of the board in the management of our company."

In the fall of 2001, after all the events currently at issue in Nacchio's insider-trading trial, the Qwest board signed a new four-year contract with Nacchio and gave him 7.25 million stock options.  Anschutz sat on the compensation committee, as did his employee Craig Slater.  (In testimony, Anschutz referred to the members of that committee as "they" rather than "we.")

Anschutz employees also chaired the board's nominating and finance committees.

What did all of this mean Thursday?  Very little, as the defense called him to talk about Nacchio's 1997 hiring and his 2001 wish to resign after his son's suicide attempt.

On cross-examination, prosecutor Cliff Stricklin asked, "Now, Mr. Nacchio did not run every major business decision by you personally, did he?"

"He did not," Anschutz said.

Stricklin:  "And how often did you talk with Mr. Nacchio about the business of Qwest?  How often did you confer with Mr. Nacchio during the time frame of 2000, 2001?"

Anschutz:  "We would talk intermittently.  Sometimes it would be several times a month by meeting or sometimes it would be several times a week.  There was no schedule to it."

And there was no more testimony about it.  Anschutz is not on trial, and since the defense chose not to suggest he had a significant role in the company, it wasn't in the prosecution's interest to suggest it, either.

Rocky finance editor David Milstead is weighing in each day on his "Out of Order" blog at RockyMountainNews.com.

http://www.rockymountainnews.com/drmn/tech/article/0,2777,DRMN_23910_5468389,00.html