Judging from the number of people in the courthouse today, one would think it was the first day of the of the trial. Reporters and spectators from all over arrived at the courthouse early in anticipation of testimony by Denver billionaire, Philip Anschutz. I spoke with a gentlemen next to me who stated that he has been involved in some real estate deals, and was there because he and his partner had lost a lot of money on a deal and he wanted to know what Anschutz had to say.
The day began earlier than expected, as Judge Nottingham addressed several motions before the court. First, Judge Nottingham addressed the motion to strike Sally Anderson's testimony, and noted that while there was some miscommunication between the court and the government, the testimony was unnecessary for the jury to understand what constituted material information. As a result, he decided to strike the testimony but denied the motion for a mistrial.
Next, Judge Nottingham ruled on the motion to strike testimony by David Weinstein. In short, Nottingham ruled that the probative value of the testimony substantially outweighed any danger "that thetr might be prejudice in the minds of the jury" and that the jury had already been instructed not to convict Nacchio simply because he was a wealthy man. Judge Nottingham denied both the motion to strike testimony and the motion for mistrial with respect to Weinstein's testimony.
In addition Nottingham ruled on the motion concerning exhibit A 1031, pertaining to certain statements made by Mr. Yash Rana. Judge Nottingham noted that while this may be circumstantial evidence, a fair trial requires that it be presented to the jury.
After a long morning of rulings from Judge Nottingham, the defense called Philip Anschutz, founder of Qwest Telecommunications, to the stand. Considering Mr. Anschutz' position with Qwest, I was surprised when defense attorney John Richilano stepped up to the podium to question Anschutz. The testimony was not as exciting as everyone in the courtroom had hoped. Richilano began by asking Anschutz about his relationship with Nacchio, in particular about how the two met and how Nacchio came to be the CEO of Qwest. Anschutz stated that in 1996 he met with investment bankers at Solomon Brothers to discuss taking Qwest public, at which time it was suggested that he find a suitable person to lead the company and that Mr. Nacchio would be a good candidate for the position. Anschutz further testified that he thought Nacchio was the right man for the job, because he had the background, knowledge, and experience within the industry.
After a series of questions regarding the original compensation package offered to Nacchio, Richilano asked Anschutz about a very private conversation he had with Nacchio regarding the attempted suicide of Nacchio's son. Anschutz stated that this was the first time Nacchio had ever come into his office and closed the door. While I was not sitting in the main court room, according to others who were, this was a sensitive issue, and apparently Nacchio had tears in his eyes during this segment of the direct examination.
Anschutz further testified that the conversation mainly revolved around Nacchio's son, and the fact that Nacchio wanted to resign from Qwest. Anschutz also testified that neither he nor the Qwest board wanted Nacchio to resign, and that they were willing to offer Nacchio an attractive package in order to convince him to stay at Qwest. Anschutz further stated that there was nothing in Nacchio's agreement at the time that would have prevented him from resigning, had he wanted to do so.
The cross examination came from Stricklin, and began with a line of questioning based on Anschutz' reasons for recruiting Nacchio as the CEO of Qwest. Stricklin asked if Anschutz thought Nacchio knew the business, to which he answered, yes. Among other things, Anschutz testified that Nacchio was chairman of the board, that the board looked to Nacchio as CEO for recommendations, and that formulating the business plan, setting the budget, and providing guidance to the street was Nacchio's authority and did not need to be run by the board. Stricklin also asked Anschutz about a mutual agreement containing a non-disparaging clause.
The re-direct was quite brief. Richilano stepped up to the podium and asked Anschutz one question: does the non-disparity provision say that you can come into court and not tell the truth? Anschutz answered, no.
The next witness was Abbot Giles Hayes (Delbarton School). It was clear that the defense had two objectives when questioning this witness. The first objective was to create the impression that Nacchio is a good person and a philanthropist. The defense asked Hayes about the nature of the trip, to which Hayes answered: this trip is done to give gifts and food to the poor. The second objective was to show that Nacchio was out of reach for the duration of a trip to a mission in Eastern Kentucky. Hayes testified that in 2000 the mobile phone coverage in that area was all but non-existent and that most mobile phones, including his, did not have signal.
Upon cross-examination, Stricklin questioned Hayes about a $1 million donation the Nacchio family made to Delbarton School, where both of Nacchio's kids studied. Stricklin also asked Hayes about the motel he and Nacchio stayed in while in Kentucky. Hayes testified that the hotel was very old and run down, and that most of the phones were either inoperable, or could only call other rooms, but not outside the motel. He further testified that in order to make outside calls, he had to use the phone in the office. Hayes testified that the phone situation was so bad that at one point he asked Nacchio for a satellite phone, which Nacchio provided to him.
In an attempt to show the jury that Nacchio was not the philanthropist the defense had made him out to be, Stricklin asked Abbot Hayes about the photographer Nacchio hired in order to take publicity shots during the trip. Hayes testified that the photographer was present, but that he was not aware that the trip was later used for Qwest publicity, and he further testified that he was unaware of an interview Nacchio conducted with the Wall Street Journal regarding the trip.
When prosecutions cross ended, the witness was excused, and Judge Nottingham discussed a motion regarding the testimony of defense's next witness Daniel Fischel. Fischel was set to testify regarding the general state of the economy at the time Nacchio was dumping his stock. Nottingham did not think Fischel's testimony was significant and ruled that he could not testify other than for summary purposes.
The most interesting part of the day came when Stern stood up to tell Judge Nottingham that he was not expecting such a ruling and that defense was not prepared with another witness for the day. Judge Nottingham was not pleased. He told Stern that he'd warned him in the past about wasting the jury's time, stating that he did not want the jury to sit there and "twiddle their thumbs" waiting for defense to get its act together. Further discussion took place between the two (unfortunately due to a packed courtroom and insufficient audio, I was unable to catch the conversation). However, I did hear Judge Nottingham tell Stern "well why don't we just tell the jury to take a week off." Nottingham further berated Stern by telling him that his ruling relating to Fischel was not such an anomaly and that defense counsel should have anticipated it.
Judge Nottingham gave defense a fifteen minute break to figure out their strategy, after which he adjourned court for the remainder of the day. Judge Nottingham also gave defense until 5:00 PM Saturday to inform the prosecution whether or not they are going to put Nacchio on the stand.