Day 4: Second Witness Takes the Stand

The morning of the 4th day began with a completion of the cross examination of Lee Wolfe (former head of investor relations at Qwest) and a brief re-direct by the prosecution.  The defense questioned Mr. Wolfe about investor skepticism regarding Qwest revenue disclosures, and revisited Wolfe's Stock sales during the 2000-01 period, where he netted more than $1.6 million.

In one exchange, counsel asked about Nacchio's response to concerns from analysts over one-timers.  "Why do they need to know?" Nacchio was reputed to have asked.  "To make an informed decision to buy and sell the stock," testified Wolfe.  To which Nacchio replied "Screw'em.  Go tell them to buy."   On another occasion, Wolfe was presented with a current report on form 8-k that for the first time disclosed the magnitude of the non-recurring revenues.  When offered an opportunity to comment, Wolfe described the disclosure as "misleading." 

Richilano ended his cross-examination shortly after asking Judge Nottingham for a moment to set up the his equipment at which time Judge Nottingham refused, saying "tough, you should have been prepared to go before."

After a brief redirect, Craig Slater, former Qwest board member and Executive V.P. at Anschutz Corporation, took the stand.  Perhaps reflecting his importance, this witness is being handled by lead counsel for each side, Cliff Stricklin and Herbert Stern.  Slater, having served on the compensation committee of the Qwest board discussed at length compensation awarded to Nacchio, including growth shares, 3 million stock options in June 1997 (that became 12 million due to stock splits), 9 million stock options awarded in 1999, salary (which exceeded $1 million by 2001), bonuses (of up to 250% of salary and in part tied to earnings), and a $750,000 completion bonus resulting from the closure of the U.S. West merger.

Stricklin's approach appeared calculated and methodical, while his demeanor stayed relaxed.  Throughout of the morning he remained on task engendering few objections, and most importantly few weary looks from Judge Nottingham.