Prosecution: No retaliation against Nacchio
By David Milstead
Rocky Mountain News
Tuesday, October 23, 2007
Prosecutors fought ex-Qwest CEO Joe Nacchio's charge of
government retaliation by pointing out that Qwest actually got a
piece of the business Nacchio's attorneys say was lost.
The argument, contained in court documents released Monday, was
part of the U.S. Attorney's attempts to combat Nacchio's
proposed classified-information defense.
Nacchio claimed that Qwest lost a big contract from the National
Security Agency called "Groundbreaker" because the Denver telco refused to go along with a phone
spying program. That was to be his explanation for why
Qwest didn't get the millions of dollars in business that only
he knew would help the company meet its earnings goals.
Nacchio never used the arguments at trial because U.S. District
Judge Edward Nottingham precluded them.
"The Court believes ... that the inference of a causal
connection between Mr. Nacchio's refusal and the fact that Qwest
didn't end up with the contract is extremely weak,"
Nottingham ruled on Dec. 8, according to the
In the document released Monday, prosecutors went on to say that
Nacchio's claim that Qwest was "left of the list of
subcontractors" was false. This "only strenghtens the
Nacchio apparently submitted a 2001 press release from Computer
Sciences Corp. that listed Northrop Grumman as its partner on
the $2 billion Groundbreaker project. It named three other
companies — none Qwest — as "Strategic Alliance Partners" on the
project. Qwest was also left off a list of technology and
service delivery partners.
Prosecutors submitted a document from the project that listed
Qwest as one of 32 strategic vendors on the project.
Nacchio was convicted last spring on 19 counts of insider
trading for $52 million of stock sales in April and May 2001,
and sentenced to six years in prison. He's free pending
The partially redacted documents were filed under seal before,
during and after Nacchio's trial. Documents filed by
Nacchio's defense team were unsealed Oct. 10.
USA Today reported in May 2006 that Qwest, unlike AT&T and
Verizon, balked at helping the NSA track phone calling patterns
that may have indicated terrorist organizational activities.
Nacchio's attorney, Herbert Stern, confirmed that Nacchio
refused to turn over customer telephone records because he
didn't think the NSA program had legal standing.