DENVER - Qwest’s relationship with the Arizona School Facilities Board was so tight in 2001 that a company sales executive had an office at the state agency with access to its computers, phones and stationery, according to testimony here Thursday.
Mark Lester, former Qwest regional vice president for government and education solutions, said such an arrangement was unprecedented in his years of working in the telecommunications industry.
Lester explained the close relationship when asked by federal prosecutors why company executives had blank stationery from Philip Geiger, then the executive director of the agency, that allowed them to draft a series of phony letters for his signature.
Lester said that Kim Marona, a sales executive with Qwest, was able to get blank stationery with Geiger’s letterhead because she worked at the facilities board office at the Arizona state Capitol.
Lester also backed earlier testimony from Ron Carrington, who was Qwest’s lead representative on the facilities board deal, that Geiger agreed to sign blatantly false letters as a “favor” to allow the company to inflate its June 2001 quarterly earnings report.
In return, Geiger laid down a series of conditions, among them that Qwest retain a specific public relations firm to tout the initiative to bring Internet technology to every school in Arizona. Lester did not remember the name of the individual Geiger wanted the company to hire, or the name of the firm.
They also were not identified in testimony or documents presented Thursday.
At the time, Qwest already had its own public relations staff.
Four former Qwest executives are being tried on federal charges of fraud and conspiracy involving the facilities board deal. The trial is being held in Denver, where the company is headquartered.
Geiger, Carrington and Lester are not among those charged.
The indictment alleges the defendants conspired with Geiger to create a series of false letters that would allow the company to claim about $34 million in equipment it bought for the facilities board deal as a sale, even though Qwest would not be paid until the equipment was installed and working. The true terms of the deal would not have allowed the company to claim the revenue unless Geiger specifically wanted the equipment purchased upfront, and was willing to take title to it.
In late June 2001, Qwest executives were scramblingto get the final drafts of the letters to Geiger for him to sign, Lester said. All of the letters were written by Qwest executives — including the two signed by Geiger on facilities board letterhead, Lester said.
Lester said he was being pressured by Thomas Hall, a former senior vice president of Qwest, and one of the defendants, to get the first letter signed by Geiger before June 29, the last business day of the quarter. Carrington was in charge of getting Geiger’s signature, but Lester said the initial letter — dated June 27 — was not signed on that date.
Instead, Carrington ultimately delivered the letter to Geiger two days later at the baggage claim area of Phoenix Sky Harbor International Airport, where Geiger was waiting to pick up his son, according to prior testimony from Carrington.
Geiger is scheduled to be the next witness to take the stand, which should be sometime next week.