Qwesting for a way to avoid jail
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Qwesting for a way to avoid jail
TESS VIGELAND: The trial of Joseph Nacchio got underway today. Nacchio headed the once high-flying telecom company Qwest Communications. He’s charged with selling more than $100 million in Qwest stock based on inside information that the company was in trouble. But he’s hoping another sort of inside information will save him from prison. Marketplace’s Amy Scott has more.
AMY SCOTT: Prosecutors say Joe Nacchio dumped his stock back in 2001, after colleagues warned him Qwest couldn’t meet earnings targets. Not long after, the stock plunged amid an accounting scandal that nearly bankrupted the company.
But Nacchio says when he sold the stock, he had other information that gave him hope. His attorneys are expected to argue that Nacchio believed Qwest was about to win lucrative contracts with secret government agencies.
Telecom analyst Donna Jaegers recalls meeting with a very upbeat Nacchio.
DONNA JAEGERS: It was clear from conversations with him at the time that he was definitely talking with government officials about their long-term telecom plans.
Defense attorneys plan to submit classified information linking Nacchio to several government agencies.
Legal analyst Scott Robinson says Nacchio was certainly in a position to hear about secret contracts. He served on a presidential national security committee. But Robinson says using classified evidence can be a tactic to get the government to drop a case rather than expose national secrets.
He spoke from outside the Federal courthouse in Denver.
SCOTT ROBINSON: Certainly the defense may be pursuing the classified information defense in hope that they can get the case dismissed. Whether they have enough actual evidence to support the defense remains to be seen.
Nacchio’s attorneys may try another defense straight from the personal finance handbook. Nacchio has also said he sold the stock to diversify his portfolio.
In New York, I’m Amy Scott for Marketplace.
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