AUSWR
The Association of U S West Retirees
 

 

 

Court hears Nacchio appeal of conviction
By Tom McGhee
Denver Post
Thursday, September 25, 2008


Joe Nacchio (Andy Cross, Denver Post file photo )

1:41 p.m. Court in recess.

1:40 p.m. Mahoney in rebuttal. Judge Mary Beck Brisco asks why the defense didn't request a continuance to address question of testimony. Nacchio could have come back from his home in New Jersey to make it, she adds. "He's a frequent flyer he could have come back."

1:39 p.m. - Kneedler argument completed.

1:35 p.m. - "We are being asked to affirm (Nottingham's) ruling on the theory that Fischel, an expert who has testified on 200 matters .... was planning to testify without methodology," a judge says.

1:30 p.m. - Chief Judge Robert H. Henry asks if it was necessary to totally exclude Fishcel's expert testimony. "Isn't this sanction over the top?"

1:21 p.m. - Prosecutor Edwin Kneedler arguing: If Nacchio's lawyers could have done many things to get exhibits that would have shown what Fischel would testify into the trial. Judges are asking whether defense was really given opportunity to respond when prosecuters were moving to keep Fischel from testifying.

1:16 p.m. - "Appropriate remedy ... is to go ahead and have a new trial," Mahoney says. She is finished arguing and will return on rebuttal.

1:09 p.m. - "Counsel, I am perplexed by your argument," says a justice," says Judge Carlos F. Lucero. Mahoney is arguing that Judge Edward Nottingham should have held a hearing to establish whether an expert witness for Nacchio should be allowed to testify.

1:03 p.m. - Nacchio lawyer Maureen Mahoney arguing that government should have allowed expert witness to testify. Judges are peppering her with questions.

1:01 p.m. - Justices are now seated.

12:56 p.m. - Four brass and frosted glass chandeliers surround a compass rose set into the chamber's glass ceiling.

12:39 p.m. - Many of those in the packed gallery are lawyers and some are retirees or others who lost money when Qwest imploded.

12:34 p.m. - The small appellate court room is crowded with some people standing. Lawyers for both sides are unpacking briefcases and shuffling papers.

BACKGROUND: An appellate court will hear oral arguments today to decide whether former Qwest CEO Joe Nacchio, who was convicted of insider trading, should receive a new trial.

A jury found Nacchio, 59, guilty of 19 counts of insider trading in April 2007 and he was sentenced to six years in prison.

He netted more than $216 million through stock sales, bonuses and other perks in 2000 and 2001, a period for which Qwest later was forced to restate losses of $2.5 billion.

"So many retirees of our company were seriously hurt by this. In the end, when all the facts are known I just hope that justice is done," said Nelson Phelps, executive director of the Association of US West Retirees.

A three-judge panel of the 10th U.S. Circuit Court of Appeals ruled that during the trial U.S. District Judge Edward Nottingham improperly barred expert testimony for the defense from business law professor Daniel Fischel.

Prosecutors sought a review by the full appeals court, which granted the request. Three members of the 12-member panel have been recused, leaving nine judges to hear the case.

Nacchio's defense will argue that Nottingham never gave him an opportunity to explain why Fischel's testimony should be allowed.

The government says Nottingham provided Nacchio ample time to explain why Fischel should be allowed to testify, but the defense didn't meet the burden required under the federal rules of evidence.

Both sides will have 15 minutes to present their case, though questions from the judges could prolong the hearing. Nacchio didn't attend the first appellate hearing and is not required to attend today.

Nacchio engineered Qwest's $48 billion merger with phone company U S West.

He turned the stodgy Baby Bell into a major player before the company suffered huge financial losses and he was pushed out in 2002.

Still pending is a civil lawsuit the Securities and Exchange Commission filed against former Qwest executives, including Nacchio.

Tom McGhee: (303)954-1671 or tmcghee@denverpost.com

http://www.denverpost.com/business/ci_10556681