Anschutz testifies about Qwest CEO
Joe Nacchio “broke down in tears” after his son attempted suicide and asked to resign as chief executive of Qwest Communications International Inc. at a time when prosecutors contend he was illegally selling stock, Qwest founder Philip Anschutz said Thursday.
Nacchio, who resided in New Jersey and traveled to Denver for Qwest business, wanted to be closer to his family, the Denver billionaire told jurors in Nacchio’s $101-million insider trading trial.
“He was quite agitated, very emotional. In fact, he broke down in tears,” Anschutz said of Nacchio’s behavior during a private January 2001 meeting in Denver.
Nacchio described his son’s actions and then said, “Phil, I want to resign,” Anschutz recalled. “I was quite surprised by the news of his son and further surprised by the fact that he would want to resign from the company.”
Nacchio took some time off. “We didn’t spend any time talking about compensation or about him staying at Qwest. We talked about his son,” Anschutz said. “It was a matter of some days. A couple of weeks. I don’t recall.”
Anschutz, whose testimony during a rare public appearance took less than an hour, also described efforts by Qwest’s board to retain Nacchio and extend his contract.
His testimony was aimed at giving jurors an idea of Nacchio’s state of mind at the time of the stock sales that are the subject of the 42 insider trading counts against him.
Defense attorney John Richilano told U.S. District Judge Edward Nottingham that a “state of mind to cheat and fraud pales in significance to what was going on with his son.”
In a surprising turn, defense attorneys also told the judge they thought they could wrap up their case in 1 1/2 days and might not present evidence about secret government contracts, as they have indicated since December 2005.
Defense attorney Herbert Stern said the information might arise in a limited fashion if Nacchio testified. The attorneys said they had one expert witness and some video clips to show jurors but had not decided whether to call Nacchio to the stand.
Prosecutors say Nacchio made a series of stock sales in the first five months of 2001 based on internal information that the company faced financial risks and might not meet revenue targets. That information was withheld from investors and the public until August 2001.
Nacchio has said that he believed Qwest would meet the targets and that his contract required him to exercise stock options in the 2001 transactions. He also has said that he alone knew that Qwest was in the running for lucrative contracts from secret government agencies.
