The Race to the Bottom covered the criminal trial of ex-Qwest CEO Joseph Nacchio (“Nacchio”). Since his conviction, this blog has covered the appeal which overturned his conviction, the replacement of Judge Nottingham, the en banc rehearing which reinstated his sentence, and Nacchio’s petition for certiorari to the Supreme Court. In the newest chapter of this saga, on January 12, the District Court of Colorado dismissed Nacchio’s Motion for New Trial based on new evidence.
The defense’s motion claimed that Robin Szeliga’s (“Sleliga”) deposition testimony to the SEC two years after the conclusion of the trial created recognizable “new evidence” which was sufficiently significant to grant a new trial.
During the 2007 criminal trial, Szeliga testified about communications between herself and Nacchio concerning Qwest’s 2001 financial target shortfalls. Qwest kept two sets of revenue targets. The first was an internal target unknown to the investing public and the second was public. Szeliga learned in 2000 that there was a $1 billion shortfall risk in Qwest revenues. She also testified that she communicated this billion dollar risk to Nacchio. Confusion ensued during Szeliga’s trial testimony on whether she told Nacchio the billion dollar shortfall related to the internal or public targets. If the risk related to internal targets it represented 1.4% of Qwest’s revenues, while if the risk corresponded to the public target it was 4.2% of Qwest’s revenues. During Szeliga’s SEC deposition testimony two years after the trial she seemingly testified about the billion dollar shortfall relating to the internal and not public figure. In her deposition, however, she continually cautioned SEC attorneys that her recollection was vague and that she needed to look over documents to refresh her memory.
Nacchio contended in his motion that Szeliga’s deposition was new evidence that confirmed the billion dollar risk related to the internal targets, representing 1.4% of Qwest’s revenues. In particular, Nacchio claimed this affects the materiality of the communications, thereby requiring a new trial.
A motion for new trial under Federal Rule of Criminal Procedure 33 based on the discovery of new evidence requires: “(1) the evidence was discovered post-trial; (2) the failure to discover the evidence was not caused by the defendant’s lack of diligence; (3) the new evidence is material to the principal issues involved; (4) the new evidence is not merely cumulative or impeaching; and (5) the new evidence would probably produce an acquittal in a new trial.” The court focused its analysis on the last two elements.
New evidence cannot be merely cumulative or impeaching. As explained by the court, cumulative evidence simply confirms or corroborates evidence already established by other evidence. Impeaching evidence simply calls a witness’ credibility into question. The court noted Szeliga’s trial testimony thoroughly examined her communications with Naccio and the existence of a substantial risk shortfall. Both the prosecution and defense had ample time to explore these issues in their direct, cross examination, and redirect. In fact, it was these exhaustive examinations which lead to the confusion about whether the billion dollar risk applied to the internal or public targets. The court held Szeliga’s SEC deposition could only be cumulative or impeaching. The deposition added no new information and did not recant her trial testimony. Notably, Szeliga continually told SEC attorneys that she was having trouble recollecting specifics about their questions. Her deposition would only corroborate that her statements to Nacchio about the billion dollar risk did apply to the internal targets or would simply undermine her credibility, nothing more.
Lastly, the court stated the deposition testimony continued to demonstrate Szeliga’s inconsistent testimony about which financial target her communications with Naccio concerned. For the court, the deposition testimony fell well short of demonstrating reasonable probability of resulting in an acquittal.
Accordingly, Judge Krieger dismissed Nacchio’s Motion for New Trial. The Race to the Bottom will continue its coverage of the Nacchio saga as it develops.
The primary materials in this case can be found at the DU Corporate Governance web site.