Day 6: Cross-Examination of Robyn Szeliga Continues

Tuesday March 27, 2007 - Mr. Stern's cross examination of Szeliga continued this morning.  For the most part the morning session has been rather slow, with Mr. Stern taking his time to try to establish, among other things, that the DLJ report (financial forecast of the Qwest/US West merger) was merely a projection and should not have been relied upon by investors, that the internal projections were generally set higher than the external projections in order to make sure external projections were not only met but were also exceeded, that Mr. Nacchio anticipated large classified government contracts, and that Qwest's numbers were less than accurate due to unanticipated recession beginning in late 2000.

Mr. Stern made repeated attempts, by entering several form 8k filings into evidence, to demonstrate to the jury that Mr. Nacchio rightfully relied on the projected statements prepared by DLJ when making statements regarding the financial conditions at Qwest, and that Qwest was actually able to meet and exceed those projections for 2000 and for both 1Q and 2Q of 2001.  Stern furthermore attempted to show that a receding economy was partially responsible for Qwest's failure to meet it's projections for the 3Q of 2001.  Szeliga recalled a conversation by Mr. Nacchio in 2001 regarding the recession and the need to lower the bar so Qwest employees could still meet their goals in an effort to retain company morale. 

Mr. Stern's efforts were somewhat ineffective due to the fact that Szeliga had little recollection of the many conversations and memorandums she was questioned about.  While Szeliga remained respectful of Mr. Stern and made every effort to answer his questions, a subtle hint of hostility toward Stern's line of questioning was present at times during the cross-examination.

This was also a good morning for Judge Nottingham, as he appeared to be in a good mood generally.  It would appear that the "battle of the judges" is coming to and end as Mr. Stern has made some effort, although a minimal one, to adhere to the rules of Nottingham's court, and Nottingham seems to have developed some tolerance for Stern's courtroom shenanigans.  At one point during the morning session, Mr. Stern commented that he was starting to learn to play by the rules, and Nottingham responded with "You can teach an old dog new tricks, right Mr. Stern?"  It would be interesting to see how the relationship between the two develops as the trial moves forward.