Anschutz, 35 others tied to Qwest testify
SEC transcripts kept from defendants in civil fraud inquiry
By Jeff Smith
Rocky Mountain News
Thursday, October 13, 2005
Qwest founder Phil Anschutz and other former and current directors testified before federal regulators this year and in 2004, according to court documents filed this week.
The transcripts are characterized as "investigative testimony" taken by the Securities and Exchange Commission prior to the SEC filing civil fraud charges last spring against former Qwest CEO Joe Nacchio and six other former executives.
Investigative testimony means questions were answered under oath, with the presumption that transcripts may be shared with criminal investigators.
The testimonies of Anschutz and more than 35 other people connected to Qwest were deemed important enough that the Justice Department successfully requested the transcripts be withheld from Nacchio and the other civil fraud defendants while the criminal investigation continues. A freeze on discovery in the civil case runs through early next year.
"They don't want potential (criminal) targets to coordinate their defense by reviewing transcripts by key personnel," said Chris Bebel, a former federal prosecutor in Houston.
Reading between the lines, Bebel said it's also apparent the activities focused on by the SEC may play a key role in an upcoming criminal indictment.
Former Chief Financial Officer Robin Szeliga already has pleaded guilty to insider trading for a stock sale made in April 2001.
That suggests prosecutors in part are focusing on spring 2001, when Nacchio sold nearly $50 million of company stock. Nacchio has denied allegations of wrongdoing.
The list of those who testified before the SEC provides only names and dates. It's not known what they discussed or whether they could be potential witnesses, subjects of an action or neither.
Anschutz testified last January, while another Anschutz official, Craig Slater, testified for two days in October 2004, according to the federal court filing.
Both Anschutz and Slater sold stock during spring 2001, but neither has been charged with wrongdoing by the SEC. A spokesman has previously said neither had any insider information at the time.
Officials with the SEC and the U.S. attorney's office in Denver declined comment Wednesday about the list. Anschutz spokesman Jim Monaghan also declined comment.
Others who testified before the SEC included Szeliga, former Chief Operating Officer Afshin Mohebbi, former audit committee Chairman Tom Stephens and former Arthur Andersen auditor Mark Iwan.
Nacchio wasn't on the list of those who testified before the SEC, suggesting he may have invoked his Fifth Amendment rights against self-incrimination, Bebel said.
Others not on the list were Qwest's former chief legal counsel Drake Tempest, who fought testifying, and ex-Chief Financial Officer Robert Woodruff, who faces civil fraud charges.