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Please Redistribute

January 17, 2005

Mimi Hull

and

Nelson Phelps, President and Executive Director

ASSOCIATION OF U S WEST RETIREES

and AUSWR Board Members

This is a follow-up to my January 5, 2005, report regarding two boxes of papers I received during the last week in December from the Department of Labor (DOL) responsive to the Freedom of Information Act (FOIA) request made in March 2004, the subject of the Hull v. Department of Labor lawsuit filed in the Denver Federal Court.

Needless to state, there was little to no organization of the over 4,000 papers sent to me. But, as expected, nothing was truly confidential. Indeed, the vast bulk of the paperwork consisted of copies of the operative pension plan documents, severance plan documents, disability plan documents, amendments, resolutions and form 5500s filed from 1998 to 2001. I found only a few documents, completely out of order, which shed some light on what the so-called DOL's "investigation" was about. It is not all that exciting.

It appears that the "investigation" was a rather routine one, seeking information on whether Qwest was in compliance with disclosure obligations and whether certain expenses charged to the U S WEST/Qwest pension plan during 1998 and 1999 were truly pension expenses. The DOL asked to see back-up paperwork (i.e., receipts and disbursement journals) to support certain expenses that had been charged to the pension plan. Much of that is missing.

I have attached hereto in Adobe PDF file format, the DOL's initial contact and questionnaire letter sent to Qwest on or about April 26, 2001. Please note the separate piece of paper which is an answer to question to No. 16 which asks about "other expenses." Someone within Qwest provided a curt answer merely listing "swap agreements," as part of the "other expenses." Nothing else is said. Hmmmmm. Noteworthy, is a response to the DOL's question about what "income" the company realized by curtailing retiree health care benefits. The answer - $106 million, an amount added to support the "profit" shown by Qwest in year 2001 when Joseph Nacchio was at the helm. Also, I have attached a copy of the DOL's August 7, 2001, follow-up letter sent to Qwest. Finally, I have attached a copy of the DOL's interview notes dated May 15, 2003, which interview notes are the latest dated ones in the pile of papers the DOL reluctantly gave to me only after the Hull case was filed under the FOIA federal law.

Representatives of the DOL tell me that about 1,500 pages of paper responsive to the FOIA request are still being withheld and nothing is being said to me about whether the "investigation" is either concluded or ongoing and what, if any, decisions have been made about the investigation.

Surprisingly, I did not find any evidence that the DOL has been looking into any of the investments made with Qwest Pension Plan monies. Instead, the DOL's focus appears to be on certain "administrative expenses" that had been charged to the Pension Plan before the merger of U S WEST and Qwest.

We will continue to press forward for more information and an explanation from the DOL about what exactly is going on and what, if anything, has been accomplished during the past three years. For that reason, we will not be dropping the Hull v. Department of Labor lawsuit now pending in the Denver Federal Court. There will be a status conference concerning the Hull case before Magistrate Judge Schlatter on Thursday, January 27, 2005, at 10:15 a.m. I will send you a written report about what happens.

Curtis

CurtisLKennedy@aol.com

303-770-0440

Attachment (Sample of Papers from DOL responsive to FOIA request - 12 pages)

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