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Nacchio 'rattling sabers'
Ex-prosecutor calls possible defense strategy 'unseemly'
By Jeff Smith, Rocky Mountain News
Thursday, December 1, 2005

A former federal prosecutor views ex-Qwest CEO Joe Nacchio's possible national security defense as a sound though perhaps "unseemly" strategy to stave off an indictment or to present evidence problems should a criminal case go to trial.  "In all likelihood, Nacchio is rattling sabers about his intent to delve into confidential national security issues in an attempt to coax prosecutors to back off," Christopher Bebel, a Houston attorney and former prosecutor, wrote by e-mail this week.  "In a nutshell, he wants to make it clear that it will be very painful for the government to go forward with the case;  light will be shed upon secret, and potentially embarrassing, governmental affairs if there is a trial."

The Wall Street Journal reported last week that Nacchio's lawyers were aggressively pursuing the "unusual" defense - arguing in part that Nacchio believed Qwest was doing well in 2001 because it was getting "lucrative" national security-related telecommunications contracts and would likely get more.

Nacchio served on advisory panels to President Bush regarding telecommunications and national security, so he presumably had access to sensitive and confidential information.

Before the possible defense strategy emerged, several sources familiar with the case said they believed federal prosecutors would be seeking an indictment almost any day against Nacchio on charges of insider trading.

Former Qwest Chief Financial Officer Robin Szeliga has pleaded guilty to insider trading and said in her plea agreement that fellow senior executives knew by at least April 24, 2001, that Qwest was using questionable, undisclosed one-time deals to boost its numbers.  Nacchio sold nearly $50 million of Qwest stock in a three-week flurry after that date.

While some have discounted a possible national security defense strategy by Nacchio, Bebel said it constitutes "good lawyering."

During phase one, Bebel said, the defense attorneys are hoping their assertions will persuade prosecutors to refrain from seeking an indictment.

During phase two, if Nacchio is indicted, Bebel said lawyers are likely to argue the jury must be told of key national security considerations Nacchio was aware of and how they affected his thinking about Qwest's financial condition.

"If the judge declares certain national security information off limits, Nacchio will be able to make a strong argument in this area on appeal (should he be convicted) - he will claim that his inability to put this evidence before the jurors effectively denied him of his right to a fair trial," Bebel said.

Jeff Dorschner, spokesman for the U.S. attorney's office in Denver, previously has declined to comment about the Journal report.  Dorschner was out of the office Wednesday and couldn't be reached for comment.

Herbert Stern, who reportedly is now Nacchio's lead attorney, didn't return a phone call on the matter.

Government secrets were used in part as defense strategies by Oliver North in the Iran-Contra case during President Reagan's administration and by Wen Ho Lee, the former Los Alamos National Laboratory scientist accused of improperly handling nuclear secrets.

Lewis "Scooter" Libby, the indicted former chief of staff for Vice President Dick Cheney, also has hinted by the selection of his attorneys that he will use a national security strategy to show how his thinking was colored by sensitive, classified issues.

In the Libby case, experts such as Harvard University law professor Alan Dershowitz, a member of the O.J. Simpson defense team, raised the question of whether the independent prosecutor, the White House or the intelligence agencies would have the ultimate say in deciding to disclose potentially classified material.

http://www.rockymountainnews.com/drmn/tech/article/0,2777,DRMN_23910_4279321,00.html