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Feds oppose open hearing in Nacchio trial
The government wants parts of today's hearing closed to discuss how to handle classified info.
By Andy Vuong, Staff Writer Denver Post

Friday, August 24, 2006

A hearing scheduled today should be closed for "a very limited portion" so the parties can discuss how to handle classified information in the insider-trading case against former Qwest chief executive Joseph Nacchio, the government said Thursday in a court filing.

The filing was in response to The Denver Post's objection to the government's request that parts of the motions hearing be closed to the public.

"Some of the information raised by the defendant is extremely sensitive -- disclosure of information as basic as the name of some of the agencies involved could compromise national security," states the filing from the U.S. Department of Justice.

Nacchio faces 42 counts of illegal insider trading connected to his sale of $100.8 million in Qwest stock in early 2001.  Prosecutors allege he knew that the company's finances were faltering.  Nacchio has pleaded not guilty.

Nacchio's attorneys have said they want to use classified information to argue that Nacchio had a rosy outlook at the time because the company was in line to receive large government contracts.

Before departing Qwest in mid-2002, Nacchio served on two federal advisory panels dealing with national-security issues:  the Network Reliability and Interoperability Council and the National Security Telecommunications Advisory Committee.  However, he wasn't nominated to serve on the latter panel until July 2001 -- which is after the period when he allegedly made illegal insider trades.

The government said in Thursday's filing it "believes that this case will ultimately be able to proceed without the disclosure of classified information."  But prosecutors added that the parties haven't had a chance to discuss the relevancy and admissibility with the court.

During today's hearing, U.S. District Judge Edward Nottingham is expected to rule on Nacchio's request to move the case from Colorado to his home state of New Jersey.  Nottingham likely will also rule on Nacchio's motion to dismiss the charges.

A trial date has not been set.

Staff writer Andy Vuong can be reached at 303-820-1209 or avuong@denverpost.com.

http://www.denverpost.com/business/ci_4234174