Two more former Qwest executives testified Wednesday that the company's 2001 financial targets were too high, as the prosecution continued to try to build a circumstantial case against Joe Nacchio.

Grant Graham, a former finance executive of the global business division, said the division's 2001 targets were a "huge stretch" and "not realistic."

Mark Schumacher, former finance chief of the national mass markets division, testified his unit initially estimated a $444 million shortfall for 2001. He said Nacchio's response at the time was: "Go figure out how to close the gap, and then we'll talk about it."

Nacchio faces 42 counts of insider trading in connection with selling $100.8 million of stock during the first five months of 2001. Prosecutors allege he accelerated his stock sales while knowing Qwest's financial condition was weakening.

The defense has countered by noting Qwest made its publicly stated targets in the first half of 2001 and that financial targets by their nature create tension because they are designed to motivate employees to perform at a high level.

The prosecution has not been able to introduce evidence that Qwest erased $2.5 billion of revenues from its 2000 and 2001 books after Nacchio left.

Schumacher and Graham testified that by 2001 their business units were facing price declines, more competition and losses in certain core businesses, such as traditional phone lines.

Graham said his unit made its numbers in the second quarter of 2001 largely by doing one-time transactions, such as equipment sales or network capacity.

Graham pleaded guilty to one felony count related to an alleged revenue-inflation scheme in June 2001 involving Internet services for Arizona schools. He avoided prison time by agreeing to cooperate with prosecutors.

Schumacher, who became Qwest's controller in January 2001, said he recommended to former CFO Robin Szeliga that Qwest disclose the amount of its one-time network capacity sales for the first quarter of 2001.

But Qwest's reliance on one-time deals wasn't disclosed until August 2001.

Schumacher's testimony was blunted somewhat by his acknowledgement that he didn't raise the disclosure issue with the board of directors' audit committee despite attending those meetings.

smithje@RockyMountainNews.com or 303-954-5155