AUSWR
The Association of U S West Retirees
 

 

 

Ex-exec wants to use Nacchio testimony
By Jeff Smith
Rocky Mountain News
Thursday, December 22, 2005

Former Qwest executive Marc Weisberg, who goes to trial Jan. 3 on money laundering and wire fraud charges, wants to submit as evidence excerpts of testimony provided by former Qwest CEO Joe Nacchio to federal regulators last year.  Weisberg, a former executive vice president, is accused of defrauding Qwest by funneling low-priced stork from vendors to his personal accounts.

According to court documents filed this week by Weisberg's attorney Stephen Peters, Nacchio told the Securities and Exchange Commission in May 2004 that to the best of his recollection Weisberg didn't pressure vendors into allocating the stock in exchange for Qwest's business.

"No, but I mean in the negotiations, when you're negotiating across the table on a deal and there's all kinds of things on the table, I just know how Marc negotiates," Nacchio testified to the SEC.  "He's a very good negotiator but ... I have no recollection of Marc making that a prerequisite for doing a deal."

Nacchio's testimony is "critical to the just disposition of Weisberg's case," Peters argued in the motion.

Peters said Nacchio isn't available as a witness because he has been indicted on insider trading charges and plans if necessary to invoke his Fifth Amendment right against self-incrimination if he's called in the Weisberg case.

Jeff Dorschner, spokesman for the U.S. attorney's office in Colorado, declined comment Wednesday, noting that the government will file its response later.

Nacchio testified that Weisberg was the "point person" for the vendor-stock deals but "needed some guidance" on the best way to handle the situation so it wasn't
controversial.  At the time, it was relatively common in the overheated telecommunications industry for vendors to offer initial public offering stock to potential customers.

Nacchio, who also received some allocations, said he told Weisberg it would be best for the shares to be granted only to senior executives because they typically don't select suppliers.

"Look, we have a pretty strong conflict-of-interest policy that says you've got to recuse yourself from a decision if you're invested in a company," Nacchio testified.  "Very few of these technology decisions .... are made by the senior-most folks."

Nacchio also maintained that receiving the stock wasn't necessarily a perk because it required the executives to pay for the stock at the IPO price and "if we guess the market wrong at any time, you lose your own money as we've demonstrated on several of our investments."

Many of the stock, however, soared in price during the period before the telecom industry weakened.

Separately, Nacchio agreed in 2003 to give $400,000 to two law schools to settle charges by New York Attorney General Eliot Spitzer that he improperly made more than $1 million from lucrative IPOs doled out by Citigroup's Salomon Smith Barney as in inducement and reward for Qwest's investment banking business.

http://www.rockymountainnews.com/drmn/tech/article/0,2777,DRMN_23910_4333785,00.htm.