AUSWR
The Association of U S West Retirees
 

 

 

Nacchio judge rules in secret
By Sandy Shore, The Associated Press
Denver Post
Thursday, October 26, 2006


A federal judge has issued a secret ruling about the relevance of classified government documents that former Qwest Chief Executive Officer Joe Nacchio wants to use in his defense against insider trading charges.

U.S. District Judge Edward Nottingham's ruling came about two weeks after he met behind closed doors with prosecutors and Nacchio's attorneys to discuss the classified information.

In his memorandum and order, which were filed with the court late Tuesday, Nottingham said he explained his decision regarding the documents but the bulk of it, 25 pages, was sealed under the Classified Information Procedures Act.

A spokesman for the U.S. attorney's office declined comment today.  Nacchio's attorneys have said they will not comment on the case outside the courtroom.

Nacchio is charged with 42 counts of insider trading, accused of selling stock in 2001 based on inside knowledge that Qwest Communications International Inc. would be unable to meet revenue targets.

Each count against Nacchio carries a penalty of up to 10 years in prison and a $1 million fine.  The trial is set for March 19 and is expected to last about 30 days.

At issue is whether the classified information will help explain what Nacchio might have known at the time the trades occurred.

The defense has said Nacchio was aware of classified government contracts awarded to Qwest and of plans for future government business dealings with the Denver-based company.

Qwest, the primary phone service provider in 14 mostly Western states, reported total revenue of $19.6 billion in 2001, the year of the trades in question.  Of that, $322 million was attributed to federal contracts, and less than half of that came from classified contracts, according to court filings.

Nacchio also is one of several former Qwest executives accused by the Securities and Exchange Commission in a civil case alleging they orchestrated a financial fraud that forced the company to restate billions of dollars in revenue.

The Classified Information Procedures Act was enacted several decades ago to counter a strategy used by defendants charged with spying who would threaten to expose national secrets unless the charges were dropped.

It allows the attorneys and judges to review such information behind closed doors to determine if it is significant enough to be included at trial.

http://www.denverpost.com/ci_4547862