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Nacchio trial now ‘classified’

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DENVER — A federal judge on Tuesday issued procedures for the handling of classified government information that may become part of former Qwest chief Joseph Nacchio's defense.

Prosecutors and defense attorneys will have access to documents after going through security clearances, and anyone involved in the case won't be allowed to talk about what's in the documents, even after the case is over, according to the order issued by U.S. District Judge Edward Nottingham.

Information gleaned from the documents and used during the trial will remain sealed.

Nottingham's order includes documents classified as "'confidential," "secret" and "top secret." The order follows the government's requirements for viewing documents under the Classified Information Procedures Act, and sets up a special facility and equipment for viewing the material.

A motions hearing is scheduled for Aug. 25.

Prosecutor Bill Leone has told the judge he does not believe a substantial amount of the material identified by defense attorneys will be deemed classified by the government after its review is complete.

Defense attorneys have said Nacchio had access to classified information about national security work as part of Qwest's business dealings with the government that may have given the former chief executive officer hope for the company's future.

Nacchio is charged with 42 counts of insider trading accusing him of selling $101 million in stock in 2001 based on inside knowledge that Qwest Communications International Inc. would be unable to meet targets because it had improperly used nonrecurring revenue to meet those goals.

Each count carries a penalty of up to 10 years in prison and a $1 million fine. Nacchio has pleaded not guilty and remains free on bail.

In addition to the criminal case, Nacchio is one of several former executives accused by the Securities and Exchange Commission of orchestrating a financial fraud that forced Qwest to restate billions of dollars in revenue.

The SEC has said fraud occurred between April 1999 and March 2002 that allowed Qwest to improperly report approximately $3 billion in revenue that helped clear the way for its 2000 acquisition of the Baby Bell, US WEST. The revenue was later restated.