Joe Nacchio's insider-trading trial could come down to how "big money" plays with the jury.

Nacchio, former Qwest chief executive officer, is accused of selling $100.8 million of stock in 2001 while knowing problems were brewing at the Denver telco. He has pleaded not guilty.

In the first week of his trial, there's also been testimony about Nacchio receiving tens of millions of dollars worth of "growth" stock, 28 million stock options, and salaries and bonuses that reached into the millions of dollars over time.

Some jurors may ask: "What makes it fair that an alleged criminal should have that much money when I'm hard working as an average person and I can barely make ends meet?" said Mary Dodge, an associate professor in the University of Colorado at Denver's graduate public affairs department. Dodge is working on a book focusing on women and white-collar crime.

In an interview scheduled to air Sunday on the CBS program 60 Minutes, former Tyco Chief Executive Dennis Kozlowski says he believes he was wrongly done in by a jury focused on his compensation and lavish lifestyle.

"I was a guy sitting in a courtroom making $100 million a year," said Kozlowski, in prison after being convicted of looting millions of dollars from Tyco International. "I think a juror sitting there just would have to say, 'All that money? He must have done something wrong.' "

Denver criminal defense attorney Jeralyn Merritt said that's one reason jury selection was so important in the Nacchio case. She noted jurors were asked individually by U.S. District Judge Edward Nottingham about their feelings on executive compensation.

"You really have to listen to the jurors' answers but also read their body language and make an assessment of whether they're telling the truth," Merritt said. "The defense has to hope they've made the right decision (on which jurors to keep)."

Merritt was struck by the answer of a United Airlines captain on the jury, who said he didn't have hard feelings even after United went through bankruptcy reorganization. The captain told the judge he believes executives should be paid well as long as they are "returning equity back to stockholders and the company is meeting their objectives."

Other potential jurors almost followed suit, saying they also had no strong feelings about executive compensation. Many of those wound up being picked for the jury.

"He (the airline captain) was a catalyst on that (question)," Merritt said.

However, Russell Mokhiber, editor of the Corporate Crime Reporter in Washington, D.C., characterized the man's answer as a "very shrewd answer" that has this caveat: Did the executive deserve the money?

"Most Americans believe (top executives) don't deserve it," Mokhiber said, pointing to the growing disparity between chief executive and average U.S. worker salaries (the ratio is now more than 450:1). "If he's the foreman, I'll put my money on the prosecution."

David Friedrichs, a University of Scranton criminology professor who has written extensively about corporate crime, added that jury selection simply can't eliminate biases that "people won't admit to or that operate on a subconscious basis."

Merritt said she believes the Nacchio jury over time will become "desensitized" to the big numbers, especially as it comes to learn high compensation through stock sales was "prevalent among the Qwest executives, almost like it was normal."

Lead defense attorney Herbert Stern also has done a good job finding ways to humanize Nacchio to the jury, Merritt said, and offset the potential damage created by the big compensation numbers.

Stern, for example, said in his opening statement that Nacchio insisted on commuting from his New Jersey home while he was Qwest chief executive so he could be close to one of his sons, who had emotional problems. Stern also said Nacchio wanted out of Qwest in early 2001 when that son attempted suicide and was in and out of hospitals for a month.

The son with emotional problems is relevant to some of the issues in the case, Merritt believes.

"It's not just to gain sympathy but to show Nacchio had an out if he wanted one," she said.

The defense also has tried to soften Nacchio's reputation as a demanding and aggressive executive with a quick temper.

Nacchio's wife, Anne Esker, has attended every session and is joined on the front row by a half-dozen family members and friends. Nacchio has come across as pleasant, frequently smiling.

Friedrichs said the detail about the son's suicide attempt could work to Nacchio's advantage, "to the extent that jurors find it credible and can empathize with some crisis in their life."

But Friedrichs said it could backfire if the jurors "believe he is using a family situation to manipulate them."

Friedrichs said while literature suggests empathy works in favor of criminal defendants, commentators recently have observed that executives are being held to a higher standard, with fewer excuses tolerated for their behavior.

Mokhiber falls into that camp. "Emotion tends to work against the powerful, not for them," he said.

"All things being equal, it means a bad outcome for any $100 million executive facing any kind of criminal charge," Mokhiber said. Then he paused: "Now that might be an emotional response, too."

smithje@RockyMountainNews.com

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