The former head of Qwest's wholesale department had just one word for the aggressive revenue goals handed down to him in 2001:

"Bull----."

That was the one-word reply Gregory Casey sent to then-CEO Joe Nacchio and other Qwest executives in a December 2000 e-mail, Casey told jurors as the message was shown on a large monitor during Nacchio's insider trading trial Tuesday.

Testifying under an immunity deal with prosecutors, the former executive vice president said he was "outraged" that the target was raised to a number he didn't think was attainable.

Earlier in 2000, Casey told executives his department could do $4.56 billion in revenue in 2001 "if everything went right," he testified. Nacchio and other execs raised that number to $4.8 billion - described by Casey as "a Herculean task" - and told him to figure out a way to reach it, Casey said.

A few weeks later, he received an e-mail from someone in the finance department whom he had never met, Casey said. The e-mail included new goals of $5.02 billion and gave Casey one day to come up with a way to make the number.

That's when Casey fired off the e-mail, adding Nacchio to the "cc" list and signing off with "Sincerely, Greg Casey."

"I wanted to make Joe aware I wasn't happy," Casey said.

Casey, who resigned from Qwest in late 2001, is the latest prosecution witness to talk about repeated warnings Nacchio received in late 2000 and early 2001 that Qwest might not reach its earnings targets.

Prosecutors say Nacchio was armed with that "insider" information when he sold stock between January and May 2001, grossing almost $101 million. He is charged with 42 counts of insider trading for the sales, the last of which occurred roughly four months before Nacchio lowered the company's 2001 revenue guidance to Wall Street. Nacchio faces up to 10 years in prison if convicted.

Under cross-examination, Casey said that while he told Nacchio his department would have trouble meeting the annual goals for 2001, he never said he couldn't meet his first-quarter numbers. Defense attorney Jeffrey Speiser also noted that Casey, who started at Qwest in 1997, was compensated well, earning bonuses for meeting targets, cashing out stock options and making a total of $35 million while at the company.

Casey admitted he was charged in a civil filing by the Securities and Exchange Commission for his stock sales. And though he said he didn't believe he did anything wrong, he settled that case, paying a $2.1 million fine.

Outside court late Tuesday, Nacchio said he thought the day went well. "I was quite pleased with today," he said.

Casey is expected to continue testifying this morning.

Secret contracts

Earlier Tuesday, former Qwest Chief Financial Officer Robin Szeliga said Nacchio talked in early 2001 about secret government contracts that Qwest was in line to receive, including one for a large network in South America.

Nacchio's defense attorneys have said the CEO was optimistic about the company's future because of the contracts, which he had classified knowledge of through a government committee on technology on which he served. While Nacchio had federal security clearance to negotiate the deals - including some with "clandestine agencies" - other executives such as Szeliga did not, defense attorney Herbert Stern said.

So when Szeliga was warning Nacchio that the company may not meet its targets, she wasn't aware of the "enormous" need the government had for network capacity, Stern said, calling the potential deals so large they were "mind-boggling" and "mind-blowing."

Also Tuesday, prosecutors responded to a motion for a mistrial from the defense, which argued that a former Qwest employee should not have been allowed to testify last week that she bought company stock after receiving an optimistic e-mail from Nacchio in 2000. Assistant U.S. Attorney Kevin Traskos said the testimony was not improper and is relevant because it showed what information the average investor had - and didn't have - when they bought Qwest stock.

U.S. District Judge Edward Nottingham has not ruled on the motion.

THE DAY'S HIGHLIGHTS

• Gregory Casey, former Qwest head of wholesale markets, didn't like it when his division's 2001 target was raised only weeks after he had to "sign in blood" to a number he already thought was too high.

"Bull----," Casey responded in an e-mail copied to Joe Nacchio. "Sincerely, Greg Casey."

• Casey testified his division "felt like we were draining the pond" of available fiber-optic capacity deals in the second quarter of 2001. On cross-examination, he said he didn't think any of the capacity swaps Qwest did to make its numbers were improper.

• Joe Nacchio knew about some secret government contracts that former CFO Robin Szeliga wasn't aware of, according to lead defense attorney Herbert Stern. Stern referred to a conversation in which Nacchio told Szeliga that Qwest was buying fiber-optic routes in South America. The U.S. government had a "mind-boggling" need for bandwidth, according to Nacchio.

• Prosecutors responded to a motion for a mistrial from the defense, which argued that a former Qwest employee shouldn't have been allowed to testify last week that she bought company stock after receiving an optimistic e-mail from Nacchio in 2000. Assistant U.S. Attorney Kevin Traskos said the testimony is relevant because it showed what information the average investor had when they bought Qwest stock.

WHAT'S NEXT

• Gregory Casey, Qwest's former head of global wholesale markets, is back on the stand this morning. Casey is expected to be followed by other former Qwest executives as the prosecution continues its case.

WHAT THEY'RE SAYING

"Joe said, 'Hey, it wouldn't look real good if you were selling stock right now. We don't want all the officers selling stock right after the merger.' "

Gregory Casey, an executive vice president in Qwest's wholesale business from 1997 until November 2001, testifying that Joe Nacchio warned him not to sell large blocks of stock after Qwest bought U S West in 2000

burnetts@RockyMountainNews.com or 303-954-5343. Staff writer David Milstead contributed to this report.

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