Ex-Qwest CFO gets probation
Tearful Szeliga admits she made error in judgment
By Jeff Smith
Rocky Mountain News
Saturday, July 29, 2006
A tearful and remorseful former Qwest Chief Financial
Officer Robin Szeliga on Friday acknowledged she made an
"error in judgment" and had "strayed from the Lord's
guidance" when she sold stock in April 2001. Her statement
came minutes before she was sentenced to two years of
probation and six months of home detention for one count of
insider trading. She also was fined $250,000 for a trade
that netted her $125,000.
She had already repaid the $125,000 into a fund for affected
"My life is forever changed by this mistake," Szeliga told
U.S. District Judge Walker Miller in a packed courtroom.
"Most importantly, I have had to come to grips with my own
failings and demons."
Szeliga's voice quavered as she softly read her statement.
Afterward, she was embraced by family and friends. She left
the courthouse hand-in-hand with her mother.
The sentencing sets the stage for the final step of the
government's prosecution against former Qwest executives:
the case against former Chief Executive Joe Nacchio.
Nacchio faces 42 counts of insider trading in connection
with selling $101 million of stock in the first five months
of 2001 while allegedly knowing the Denver telco's financial
condition was deteriorating. He has repeatedly denied
wrongdoing. Szeliga is expected to be one of the
prosecution's key witnesses should the case go to trial.
Szeliga could have gotten 15 to 21 months in prison, but
government prosecutors recommended leniency based on her
U.S. Attorney for Colorado William Leone described Szeliga
as "uniquely situated" and said her assistance was "complete
and central" to the government's investigation. Prosecutors
say that in some cases Szeliga was one of only three
witnesses to key conversations.
Miller handed down a sentence identical to the one imposed
on former Qwest Executive Vice President Marc Weisberg, who
was accused of improperly pocketing millions of dollars from
Szeliga's attorney Terry Bird objected to the size of the
fine, but Miller said he would have a difficult time
explaining a smaller penalty to Qwest employees who had lost
a significant portion of their retirement income as the
company's stock fell from $40 to $60 a share to less than $2
at one point.
"(The fine) is intended to punish," Miller said.
Her voice trembling, Szeliga, 45, who became chief financial
officer during the critical first half of 2001, said she had
spent many hours of soul-searching over her mistake. She
said she hoped she could turn the pain and hurt into
something good for her children and others.
"From this very broken place, I hope that I can share some
of the lessons that I learned," she said.
Szeliga said the pain was being absorbed not only by herself
but by her husband and young daughters. "Each of us will
have to deal with this one way or the other for the rest of
Bird said Szeliga -- once a rising star among Colorado
finance executives -- is unemployable but on occasion
teaches yoga, volunteering her time.
He said he had seen his client suffer through guilt and
depression, and praised her for courage in taking
responsibility for her mistake. Dozens of letters of
support were written by friends and family.
Home detention details haven't been worked out. But
generally, a defendant is required to wear an ankle bracelet
about the size of a garage door opener that monitors their
proximity to their home. Defendants are allowed to go to
work and to medical appointments and such. It's unclear
whether Szeliga would be allowed to attend yoga classes.
Bruce Allen, a Denver investment manager who has followed
the Qwest case closely and witnessed the sentencing, was
struck by the heavy toll the case had taken on Szeliga.
"From a human level, it's really remarkable to see how much
one person's mistake has cost her," Allen said, "and even
with all her efforts to cooperate and to make amends for her
mistake, her life is irrevocably changed."
Several of Nacchio's lieutenants, including Szeliga's
predecessor, Robert Woodruff, made tens of millions of
dollars each exercising stock options.
But former federal prosecutor Christopher Bebel of Houston
said prosecutors wouldn't bring criminal charges unless they
could prove the executives had knowledge of the "accounting
sleight of hand" at the time of their sales. Woodruff faces
Bebel said it could have been worse for Szeliga.
"The leniency displayed by the judge clearly is designed to
recognize the cooperation she has extended," Bebel said. If
she hadn't cooperated fully, "there would have been little
chance for her to avoid a significant term of imprisonment."
Bird said prosecutors have nothing to worry about Szeliga
being sentenced prior to a potential Nacchio trial.
"She will continue to offer full and truthful testimony,"
Bird told reporters after the sentencing.
Bebel said prosecutors always can use a carrot-and-stick
approach if needed: File a motion for her sentence to be
reduced if they're pleased with her continued cooperation,
threaten her with perjury if she's untruthful.