Congressional investigators are scheduled to interview Philip F. Anschutz, a founder of Qwest Communications International Inc., today about his sale of more than $200 million in Qwest stock at a time executives were expressing concerns internally about the company’s financial outlook.
Anschutz reaped $213.5 million from sales on May 17, May 21 and June 4 of 2001, investigators say. The transactions occurred just days after a high-level Qwest official, citing the difficulty in meeting quarterly revenue figures, recommended that the company revise its financial guidance to Wall Street.
Anschutz, a Denver financier, is a major donor to the Republican Party.
In a May 13, 2001, e-mail, Greg Casey, former executive vice president of wholesale markets, wrote: “Personally, my advice would be to reset expectations and put the best face on to Wall Street that we can.”
Qwest spokesman Chris Hardman declined to comment yesterday, other than to say that the company is cooperating with the House Energy and Commerce Committee, which has been conducting the investigation. Qwest announced earlier this week that it would have to restate at least $950 million in earnings for 2000 and 2001.
Committee spokesman Ken Johnson said yesterday that Anschutz’s lawyers have told investigators that the stock sales were the result of a prearranged transaction, and were not based on inside information.
Other internal e-mails released by the committee yesterday show that senior executives at Qwest also wanted to conceal the company’s reliance on a series of controversial deals that are now the subject of congressional scrutiny.
According to the e-mails, Qwest’s own auditors were pressuring the company to disclose the deals, which added approximately $1 billion to Qwest’s bottom line.
Qwest entered into several “network swaps” during 2000 and 2001 with other telecommunications companies. Under the deals, two telecommunications companies would sell each other rights to use their vast fiber-optic networks. But in many cases, companies would declare the revenue from the deal and not the offsetting expense of their purchase.
According to an e-mail written by another Qwest official, Matthew Scott, then-chief financial officer Robin Szeliga worried that auditors would force the company to reveal its widespread use of the swaps to boost revenue. “Her concerns are that the auditors have stated that we will need to disclose those in our financial releases, and that disclosure will be expanded to show the total scope and volume of all [swap] transactions,” Scott wrote, adding, “She will not allow that to happen.”