Unbridled ambition got the best of Nacchio
By Al Lewis, Staff Columnist
Friday, April 20, 2007
Joe Nacchio looked prepared for whatever the jury would have to
The former Qwest chief executive came to court looking composed,
He shot me a smile from across the courtroom in the minutes
before the jury was seated. He tipped his rectangular
eyeglasses, the way one would tip a hat.
He was jesting about the way I'd described him in a previous
column as wearing "stylish" glasses. He had ribbed me about
this adjective before, saying he'd take any compliment he could
get from me, even if it was just one word.
When he had made his initial appearance on 42 counts of insider
trading in December 2005, I described him as wearing handcuffs
-- not exactly stylish for a former Fortune 500 executive.
If Nacchio was nervous on Thursday, he wasn't showing it.
During his trial, I'd watched his emotions range from anxiety to
near giddiness, depending on the day. He looked good on
His wife and son broke into tears of relief as the judge read
verdicts on the first 23 counts. "Not Guilty. Not Guilty. Not
Guilty ..." Until the 24th count: "Guilty."
It was like a gunshot. Nacchio's eyes dampened. His attorneys
fell somber. The room went silent, except for the judge reading
the remaining verdicts, all guilty. Few observers expected such
a devastating result. Certainly, not Nacchio's highly paid
"We will certainly appeal" was all I heard from Nacchio's
storied lead counsel, Herbert Stern, on Thursday.
The government called 21 witnesses, one after the next, and each
day's testimony appeared weak on its own. But in masterful
closing and rebuttal arguments, prosecutors stitched all of
these pieces together into an incriminating patchwork.
Nacchio knew Qwest was sinking. He knew he was cooking the
books. He knew he was lying to Wall Street. He knew he was not
disclosing material information to his investors. And he knew
he was dumping his stock on the unsuspecting public as fast as
he could unload it.
There is no shortage of gleeful Qwest retirees, employees and
investors. "I'm delighted and surprised," said Jim Rippey of
Omaha, who retired from Qwest's predecessor US West in 1982.
"I believed in business and free enterprise when I saw how it
was being worked then," said Rippey, 81. "But I am really
disgusted with how the business has become so obsessed with the
bottom line. Managers blame it on having to please the
stockholders, but I think there's more to it than that. The
managers are an ingrown group, and they see to it that they make
so much money that they can afford to say, 'Hell, I don't have
to work anymore.' ... Doesn't anybody have any pride? What if
our ministers and our teachers did that?"
His style made enemies
Denver billionaire Phil Anschutz started Qwest using rights of
way from his railroad. He then hired Nacchio from AT&T to build
it. The promise of technology and the information age sent
Qwest's stock soaring so high, it could use its shares as
currency to buy US West. And once that merger was complete in
2000, Qwest's top executives began dumping stock and resigning
I don't believe that Nacchio started out with bad intentions.
He was a hard-driving CEO in a fast-money culture. His
braggadocio was as endearing as it was alienating. When I first
wrote critical articles about Nacchio, plenty of folks in this
town defended him. But over time, his style made more enemies
than friends in a town that values honest relationships.
Anschutz, who testified for Nacchio's defense, promised great
fortunes to lure Nacchio from AT&T. Those fortunes came in the
form of growth stock and stock options.
Shareholders paid price
Once the merger with US West was complete, it would be anyone
unlucky enough to buy Qwest shares who would deliver the pay
that Nacchio expected.
I think Nacchio got carried away with his mission. He built a
telecommunications company from the ground up. He was, for a
time, a great corporate leader intent on improving a shoddy old
And for this he expected to be paid. Even when the telecom
market, and all that he had built, was collapsing, he expected
to be paid. And his unbridled ambition at a time of seemingly
limitless possibilities got the better of him.
Al Lewis' column appears Sundays, Tuesdays and Fridays.
Respond to Lewis at denverpostbloghouse.com/lewis, 303-954-1967