3:25 pm [Note: This is not a transcript. It is my notes of the proceedings as typed as fast as I can. Spelling errors will be corrected this evening. I will update every 15 minutes or so, so please either bookmark and check back or refresh your screen every so often for the latest updates.] Joe Nacchio’s defense lawyer Herb Stern will now cross-examine Qwest former CFO Robin Szeliga. Her direct examination took about four hours. The jury files in. Stern: Let’s clarify one thing. While you worked at Qwest until the earnings announcement of July, 2001, how many consecutive quarters had Qwest made it public guidelines? Robin: 16 or 17 quarters. That included the first 2 quarters of 2001? Yes. And another clarification. There was an earlier budget approved by the Board of Directors than the one showed her by Conry. Were you shown the December, 2000 budget by Ms. Conry here today? She’s seen it before but she doesn’t recall whether it was shown to her today. She doesn’t know if the Board adopted it.
The earlier budget was closer to $21 billion . It was later lowered in the Feb. budget. She doesn’t know if the Board actually approved that lower number. Goes to the minutes of the December 2000 board meeting. She refuses to say whether the Board adopted it or not because she wasn’t there. He directs her to Page 4 showing the Board of Directors approved it. She say she has no personal knowledge of that. Stern? Isn’t it true there was an earlier budget submitted to the board with a higher budget number than the one you testified to hear today? Yes. That number was lowered in February, 2001. You told us about budget meetings you attended. Her complaints about the target numbers were based on the unit numbers and she did not believe the budget targets summed up to $21 billion, 991 million. Do you recall being shown exhibit of 2nd submision Gap Summary? Is your signature on the third page? Yes. She admits she was mistaken. It was specifically noted that those internal targets or numbers totalling 21.9 were substantially stated public financial targets or street guidance of Qwest. She considers the difference more substantial on the low end than the high end. She says the difference on the low end was 691 million. Stern says he’s leaving this topic and going to her own difficulties. When did you first find you were a target? Early to mid 2005. How did you find out? I was called in to the DOJ to talk to them. She met with reps of the DOJ and the FBI. Bill Leone was there and maybe James Hearty. Doesn’t recall if Koenig (?) was there. In her whole time at Qwest she only sold 20, 000 shares. She sold 10,000 shares in 2000 to remodel her home. The feds asked her a number of questions. They told her lawyer they were going to indict her for selling 10,000 shares of stock for remodeling her home. They passed to her attorney the possible penalties which he passed on to her. She could go to jail and get a fine of million dollars. She could go to jail for ten years. She knew at that time what the maximum penalty was, she doesn’t remember it now. She testified for the government in an unrelated proceeding brought by the US Attorney’s office in Denver. Bill Leone was prosecuting. She didn’t know when she testified there that she was a target in this investigation. Her testimony was in 2003 or 2004. She left Qwest at the end of July, 2003. Other than the two sales of 10,000 shares, she had never sold any Qwest stock. When she left Qwest, she had around 300,000 shares of Qwest. Were you advised that the way you could potentially avoid incarceration would be to cooperate in an investigation against Nacchio? No. She insists she doesn’t recall being told she could help herself in her situation if she assisted the U.S. attorney in his investigation of Nacchio. She doesn’t know if her lawyer made a series of proffers about what her testimony would be. Isn’t it true there were four meetings over many months between your lawyer and DOJ in which he made proffers on your behalf? I don’t know. Didn’t your lawyer let her know when he spoke with DOJ? Szeliga’s lawyer stands up and objects as encroaching on the Attorney-Client privilege. Judge sustains objection. Is it a fact that on or about June 7, 2004, you learned that your attorney met with the DOJ and offered a proffer on your behalf? Judge says that question is okay. Answer: I don’t know. 4:00 pm Sidebar over how Stern can get the statements her lawyer proffered to the government into evidence when she won’t acknowledge knowing about them. 4:20 pm You knew your attorney was meeting with the government on your behalf? Yes. You knew he was negotiating with them to be a witness against Nacchio? No. Ultimately, she understood that she was expected to be a witness against Nacchio? She won’t agree to that. She says when we went into the agreement, she didn’t tell them what she would say about Nacchio and they didn’t guarantee no jail time. She’s being argumentative. Stern: You must have been very concerned about what would happen to you? You were concerned about the threat of prosecution for selling 10,000 shares of stock? She wanted to do what she could to become a witness instead of a defendant? She repeats a few times only that “I didn’t want to go to jail.” You wanted to do everything you could do to avoid going to jail? Yes. Were you interested in becoming a witness against Mr. Nacchio if that would help you avoid incarceration? I was only interested in not going to jail and in cooperating with the government and telling the truth. Did you authorize your attorney to make proffers for you? I don’t know. Do you know what a proffer is? I’m not sure. He explains. Did you authorize your attorney to make proffers? We never talked about it in those terms. She didn’t know what they would ask her. She doesn’t recall her lawyer going back to her with more questions from them. She is getting upset now. She insists she doesn’t remember. Her attorney objects to Stern’s questioning again. Objection sustained. Stern wants to make an offer of proof as to the statements her attorney proffered on her behalf. 4:30 Over Government objection, the Judge allows Stern to ask her a series of questions about whether she told her attorney to tell the government a series of things about the IRU’s. She answers she doesn’t remember telling her lawyer to tell the Government any of them. The Judge reminds the jury that the lawyers’ questions are not evidence, it is the witness’ answers that are evidence. Court’s in recess until 8:45 am tomorrow when Stern will resume his cross-examination.