Among the flurry of motions and court orders filed Monday in the case of former Qwest CEO Joe Nacchio, who is scheduled to be sentenced Friday by Judge Edward Nottingham, are four warranting mention. The first is an Order by Judge Nottingham outlining the procedure for victim testimony at the sentencing. The Denver Post outlines the Judge’s ruling, which defined “victim” for the purpose of allowing sentencing testimony as:

“It would appear to the court that any person who bought Qwest shares on the days when (Nacchio) was selling the shares could reasonably be regarded as a victim of the offense, assuming the purchaser’s circumstances were such that a loss were suffered,” Nottingham wrote in his order.

The victims won’t be allowed to just address the court and tell their story, narrative style.

It is “up to he government to identify victims, to notify them and to coordinate their appearance in court,” Nottingham wrote. Victims would have to “take an oath and present testimony in question-and-answer form, with the questions coming from the victim’s own attorney … or from the government’s attorneys.

The second and third are an entry of appearance by a new lawyer for Joe Nacchio — Maureen Mahoney of the firm Latham, Watkins in Washington, DC. and her very long motion requesting bond on appeal. The motion spells out the principal grounds Nacchio will appeal on and recites the applicable statute, which states:

A defendant is entitled to bail pending appeal if he is not a flight or safety risk, the appeal is not for purposes of delay, and he will raise a “substantial question” on appeal which, if decided in his favor, will likely result in reversal of the conviction or a new trial.

In our Circuit, the Court has interpreted “substantial question” to mean:

…. a “close” question or one that very well could be decided the other way.'”

The 59 page motion, which I obtained from PACER, the court’s docketing website, lists the following substantial issues and then presents lengthy argument on each one:

  • Whether the jury instructions on materiality, scienter, and good faith were in error.
  • Whether the Court’s exclusion of defendant’s expert on materiality issues, Professor Daniel Fischel, was reversible error.
  • Whether the evidence regarding objective materiality and state of mind was insufficient to permit a reasonable to jury to find guilt on every element of the offense beyond a reasonable doubt.
  • Whether the Court erred in its admissibility determinations under Section 6(a) of the Classified Information Procedures Act (“CIPA”), 18 U.S.C. app. 3, § 6(a). (For example, they argue the classified evidence Nacchio sought to introduce “had a bearing on his state of mind and the reasonableness of his beliefs that Qwest would meet its public projections.”)

It’s a very thorough and well-written brief. I bet the Government is not looking forward to having to spend the next few days drafting a brief in opposition. The fourth pleading of interest is the one the Government filed called “UNITED STATES’ RESPONSE TO DEFENDANT’S ARGUMENTS REGARDING GAIN CALCULATION, VARIANCE, AND FINE.” The reason this is of interest is because it shows that some of Nacchio’s requests were not filed with the Court but submitted out of public view. While Nacchio filed a motion for downward departure from the guidelines, he has not filed a motion for a variance from a guideline sentence, which requires consideration of the factors in the federal sentencing statute in addition to those in the guidelines. The statute requires judges to impose a sentence “sufficient, but not greater than necessary” to satisfy the objectives of sentencing. A sufficient sentence is one designed:

  • to reflect the seriousness of the offense, to promote respect for the law, and to provide just punishment for the offense
  • to afford adequate deterrence to criminal conduct;
  • to protect the public from further crimes of the defendant and
  • to provide the defendant with needed educational or vocational training, medical care, or other correctional treatment in the most effective manner;

In a nutshell and in non-legal terms, in our Circuit a defense request for departure asks for a lower sentencing guideline calculation while a variance asks the court to sentence outside and below the guidelines altogether, since the guidelines are no longer mandatory but merely advisory. A departure is not the same thing as a variance, and I mention this not to bore you with legal technicalities, but to point out that according to the Government in its pleading today, Nacchio has requested the Court for both a lower guideline calculation via a departure and for a variance, i.e., a sentence outside and below the guidelines. The Government’s pleading states:

The arguments addressed herein – regarding gain, variance, and fine — were presented as part of Mr. Nacchio’s Response to the Presentence Report. That response was not filed, but was submitted directly to Probation.

If you are attending the sentencing proceeding, you can expect Judge Nottingham to address these criteria even though Nacchio’s specific arguments regarding them have not been made public. If your eyes haven’t glazed over yet, here’s a few of the juicier tidbits from the Government pleading addressing why a variance is not appropriate and hinting at what Nacchio argued in his non-public submission.

The insider trading was not an anomaly in an otherwise “unblemished” record. On the contrary, this deceptive conduct by the defendant did not stand alone …. The defendant’s insider trading thus fits into a consistent pattern of deceptive conduct. This pattern of deceptive conduct is not an ameliorating factor, but an aggravating one.

On why the Court should not, as Nacchio suggests, take into consideration the “pressures” on Nacchio in the Spring of 2001:

At trial, there was evidence of some impact on the defendant in January 2001 as a result of his son David’s attempted suicide. At that time, he briefly discussed quitting with Philip Anschutz. But the insider trading charges on which the jury found him guilty related to conduct primarily in late April and May of 2001. There is no evidence that any family issues had, during that period, an impact on the defendant similar to the impact he claimed in earlier 2001.

The Government also wants the Court to consider conduct for which Nacchio was acquitted:

The defendant also highlights all of the trading days in early 2001 as to which he was found not guilty. While the jury may not have found the defendant guilty as to those stock sales, its finding of not guilty clearly does not mean his conduct was commendable as to those trades. On the contrary, it is proper for the Court to consider those highly suspect trades as relevant conduct in imposing sentence.

Unfortunately, since Nacchio’s arguments were not publicly filed, I can’t quote from them or even summarize them. This will not be a quick sentencing. A reporter I ran into at the courthouse last week told me that Judge Nottingham’s posted docket sheet shows it lasting from 9am to 5 pm. Normally, the reporter told me, Judge Nottingham is very specific in his docket postings about the scheduled time of proceedings. For example, an arraignment will be posted with the notation, “9:00 to 9:15 am.” He thinks this means the sentencing will last all day.