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Qwest Founder To Be Asked About Stock Sale

Sep 27, 2002 | USA Today

Congressional investigators have drawn Philip Anschutz, the reclusive billionaire founder of Qwest Communications, into their probe of revenue-boosting capacity swaps between Qwest, Global Crossing and other telecoms.

House Energy and Commerce Committee investigators today will interview Anschutz by phone to ask whether he was given advance warning of a Qwest revenue shortfall in the weeks before his sale last year of more than $200 million of stock.

The committee also has issued new subpoenas for Global Chairman Gary Winnick and former general counsel Jim Gorton to appear at a hearing on Tuesday.

''Investors in Global Crossing and Qwest lost billions of dollars while insiders walked away with billions of dollars,'' says panel member Jim Greenwood, R-Pa. ''We want to find out what these insiders, such as Mr. Winnick and Anschutz, knew and when they knew it.''

Panel spokesman Ken Johnson says investigators will ask Anschutz whether he knew Qwest executives were worried about quarterly revenue during spring 2001.

The committee released a May 12, 2001, e-mail by Qwest Chief Operating Officer Afshin Mohebbi in which he asked Qwest executive Greg Casey: ''What do you think about the quarter? Can we make it? Business is in bad shape.''

Casey replied that revenue ''looks pretty good'' but added, ''My advice would be to reset expectations and put the best face on to Wall Street that we can.''

Five days later, Anschutz made the first of three Qwest stock sales ending June 4, 2001, totaling 6 million shares and netting him more than $179 million.

Anschutz was unavailable for comment. A spokesman said his trades were legal. Qwest said it is cooperating with the committee.

Winnick sold $124 million of Global stock in May 2001 when the telecom was fighting to increase revenue by engaging in swaps with other telecoms, company documents show.

Winnick's attorney declined to comment except to say that Winnick's stock sales were legal.


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