Nacchio: Use of state secrets fought
The nation's top intelligence officer files a notice that says
disclosure of government contracts could harm the U.S.
By Andy Vuong
Tuesday, November 20, 2007
The country's top intelligence officer has joined the fray in a
civil fraud case against former Qwest chief executive Joe
Nacchio and four other former company officials.
Director of National Intelligence Michael McConnell invoked the
state-secrets privilege in a 12-page declaration filed Monday,
arguing that disclosure of certain information Nacchio and
others are seeking as part of their defense could "cause damage
to the foreign relations and the national defense of the
The state-secrets privilege "acts as an absolute bar to
disclosure of material that would harm national security --
regardless of a party's need for the information," Justice
Department attorneys wrote in a filing that accompanied
McConnell wants to bar Nacchio and others from soliciting and
disclosing information about "any classified or potential
contracts involving any U.S.
intelligence agency and Qwest."
That includes information about unclassified contracts involving
the National Security Agency that would "reveal the NSA's
mission, activities, infrastructure or technological
In documents from a separate criminal case, Nacchio suggested
that the NSA sought phone, Internet and other customer records
from Qwest in early 2001. When he refused to hand over the
information, the agency retaliated by not granting lucrative
contracts to the Denver-based company, he claimed.
Monday's filing states that Nacchio, former Qwest president
Afshin Mohebbi, former chief financial officer Robert Woodruff
and former accountant James Kozlowski intend to seek information
related to classified and potential contracts with intelligence
They, along with former accountant Frank Noyes, are accused by
the Securities and Exchange Commission of fraudulently booking
$3 billion in revenue from 1999 to 2002. Qwest later
restated much of that revenue.
"Much of the information defendants seek is classified because
its disclosure would cause serious, and in some instances,
exceptionally grave harm to national security," Justice
Department attorneys wrote.
The attorneys specifically noted in their filing an unclassified
contract called "Groundbreaker," which was the NSA's effort to
outsource certain information-technology work. Nacchio has
contended that the NSA made its request for customer records at
a meeting he had with the agency to discuss Groundbreaker.
"Qwest was an unsuccessful bidder for 'Groundbreaker.' ... In
addition, Qwest may have other unclassified contracts with NSA
for IT support and services. The fact that the contracts
existed or that NSA was the contracting agency are not
classified facts," the government's filing states. "Any
information relating to the contracts, however, that would
reveal the NSA's mission, activities, infrastructure or
technological capabilities is classified and must be protected
Based on deadlines set by the court, the earliest the case can
go to trial is 2009, if it is not settled before then.
Nacchio was convicted of insider trading charges in April in the
separate criminal case. The judge in the case wouldn't
allow Nacchio to present allegations about the NSA's retaliation
during trial because he ruled they were irrelevant.
Nacchio was sentenced to six years in prison and remains free on
$2 million bond pending his appeal.
Andy Vuong: 303-954-1209 or