HSLD

As the Joe Nacchio jury completed its second day of deliberations on Friday, I found myself dwelling on the fact that the jury foreman is a United Airlines pilot.

I can't help but think he ultimately would lean in favor of the prosecution's insider trading case against Qwest's former CEO. That doesn't mean his leanings would be a deciding factor in the trial, but they will be influential. As Richard Crawford, a former jury consultant with Holland & Hart, told me Friday, "In the end, the pilot only has one vote, but he likely will have more influence than a single juror."

United, like Qwest, has undergone wrenching corporate change in the past six years. A year ago, United emerged from the longest bankruptcy in U.S. airline history. Many United employees lost their pensions, and its stock was rendered worthless in the bankruptcy. Qwest shareholders, of course, were taken for a similar ride. Those holding shares from 2000 to 2002 saw the price plummet from $60 to $1.07. The allegations against Nacchio claim that he illegally sold $100 million of his shares and options during a period in 2001. The indictment claims he possessed damning information about Qwest that he did not share with the investing public, all the while urging investors to buy more.

Here are excerpts from the questioning by Judge Edward Nottingham of the pilot when he was being considered for the jury:

Judge: Have you ever as a part of a job been compensated with stock or stock options as part of your salary?

Juror: Yes, I have.

Is that a common way of being compensated for you?

It was a short-term experiment, I'll put it that way.

You kind of smile as though it didn't work out all that well?

We were wiped out completely.

Did you have any lingering bad feelings about that?

No, life is not fair, and that's just one of the things that happens, but overall, I've been very blessed.

Later, the judge asked, "Do you have any opinions about the amount of compensation that executives of large companies receive?

Well, you know, as long as they're returning equity back to shareholders and the company is meeting its objectives, I think they should be paid well. But when the companies do poorly and they're not performing in their jobs, I think in those cases, they are overpaid.


Neither the defense nor prosecutors registered objections, and the juror was seated. I shared the full transcript with Crawford, who wrote me back: "The defense must know from mock trials that businesspeople like this pilot lean toward acquitting this particular defendant. They clearly know something I do not know because, based on this transcript, I would have been very nervous as the defense when he was seated."

I also spoke Friday with the managing partner of a large law firm that has done enough business for Qwest that he demanded anonymity. He told me about a jury consultant he had worked with on some 30 trials.

"One of his cardinal rules was 'Never leave a pilot on a jury,' " the attorney told me. "Pilots are used to controlling the environment they are in. If you pick a pilot, he will be the foreman. They are meticulous, mathematical engineers. They tend to dominate a jury.

"As such, I have never left a pilot on a jury, not any pilot," the attorney said. "But a United pilot? You have to wonder how they will react to allegations of corporate malfeasance."

Attorneys have been telling us for months that the outcome of this case would hinge on jury selection. Now I know what they mean. And if this jury goes past Tuesday, I'm told, look for a compromise verdict - cleared of some charges, convicted of others. Remember, there are 42 counts of insider trading. If there is prolonged disagreement among jurors, that leaves plenty of room for compromise

vagabond

Like Crawford, I’m a bit surprised that defense counsel did not exercise its peremptory challenge on the pilot. I would be interested in the voir dire conducted by both prosecutor and defense, not just from the judge. Based on the limited transcript, it looks like the pilot gave answers that did not show bias even though his pension is wiped out.

kalyx522

does this mean I will never be picked for jury duty? yay?
that is an interesting point that the attorney made though, about pilots used to controlling their environment. i was reading some article in aopa mag once that many pilots actually have a fear of heights.. the reason why the fear of height doesnt affect them while doing their job is that they know they are in control (of their aircraft).

Roll Inverted and Pull

Not so fast aviator breath. What it means that you will be called, put on a panel, sit around for the better part of a week, be dismissed by every defense lawyer, sit around some more, be dismissed yet again, go back to the jury pool waiting spot, pick up your paperback. Repeat this act for a week, then go back to your regular life. Do this about every five years.

EvilGN

I was picked for a jury for a sex with a minor case, they knew I was in the military and a pilot, and I even answered questions that I would have thought would have kept me off any jury from a defense standpoint. I think one thing to consider here, is a lawyer can only deny X amount of potentials, and maybe they were all used up for my case and the case talked about here?

vagabond

Voir dire and jury selection are a fine art, not science, and very reliant on the attorney's gut feeling. This is unfortunate sometimes because it goes against the tenet of "a jury of peers." It is true that lawyers have a limited number of peremptory challenges and many do use up all of it depending on the case. Your case is substantively quite different from the Nacchio case, so it is difficult to tell the reason for being chosen. I was on jury duty a couple weeks ago; went through the entire voir dire, but did not get seated.

vagabond

No further information about the jury foreman or how the deliberations progressed. Interesting that the defense so narrowly structured its arguments. Perhaps it was all they had to go on.

From Associated Press (excerpted):

DENVER - Joe Nacchio, a former AT&T executive tapped to transform Qwest Communications into a major telecommunications competitor, was convicted Thursday of 19 of 42 insider trading charges after one-time top executives described his relentless drive to meet revenue projections without revealing financial risks.

A U.S. District Court jury deliberated six days before concluding on 19 counts that the former Qwest chief executive illegally sold stock when he knew the company faced financial challenges and relied heavily on one-time sales to meet revenue targets. He was found not guilty of the other 23 counts.

Judge Joe Nottingham set a July 27 sentencing date for Nacchio, who is free on $2 million bail. Each count carries a potential penalty of 10 years in prison and a $1 million fine.

Nacchio, who still faces a civil fraud lawsuit, declined to comment. A smile sometimes crossed his face as he left the federal courthouse arm-in-arm with his wife. They walked away together on a busy downtown street.

Prosecutors wove a circumstantial case against Nacchio based on the testimony of those who worked closely with him — a former company president, a one-time chief financial officer, an investor relations executive and business unit managers.

Nacchio’s attorneys narrowly tailored their defense, arguing the ambitious entrepreneur believed Qwest would succeed despite the warnings. They said Nacchio had to sell the shares under terms of his employment contract, particularly 350,000 growth shares sold in early January 2001 for a little more than $14 million, because the company chose to give him shares instead of cash he was owed.

Before trial, defense attorneys argued Nacchio, through his membership on two government panels, was alone among Qwest executives who knew the company could receive lucrative contracts from clandestine government agencies. At trial, attorneys didn’t present any direct evidence about classified information.

Nacchio’s defense presented just three witnesses. Qwest founder Phil Anschutz and a Roman Catholic abbot testified that Nacchio wanted to resign in January 2001 to remain in New Jersey with his family after a son attempted suicide.