The Association of U S West Retirees



Angry US West retirees wishing for a conviction
After losing money with Qwest shares, many urge jail time
By Roger Fillion
Rocky Mountain News
Wednesday, December 21, 2005

They're glad Joe Nacchio got indicted.  Now, these retirees are crossing their fingers that the ex-CEO of Qwest will be found guilty -- and punished.

"I think he's guilty.  And I'm scared to death he's going to get away with it," said Alice Peterson, a 31-year veteran of U S West and its predecessor, Mountain Bell.

"If our legal system is any good at all," added the Wheat Ridge resident, "they'll get him."

Peterson was among the U S West retirees pleased to hear Tuesday's news of Nacchio's indictment on 42 counts of insider trading.

Many lost money after Qwest bought U S West in 2000 -- and their U S West stock was converted into Qwest shares.  Qwest's stock later plunged amid an accounting scandal while Nacchio was in charge.

Each of the 42 counts against the former CEO carries a potential penalty of 10 years in jail and a $1 million fine.  Federal prosecutors also want $100.8 million in restitution.

"I just hope that everything holds up in court and he is convicted," said Shirley Eyre, an Aurora resident who retired as a manager from U S West in 1989.  That was 11 years before upstart Qwest swooped in and bought the former Baby Bell.

Eyre, a 21-year U S West veteran, reckons she lost "several thousand dollars" in losses "on paper" after the merger.

The 70-year-old recalls last selling some of her U S West stock before the merger, when the shares were about $89 each.

Qwest's shares closed Tuesday at $5.65.  They traded as high as $66 in March 2000.  A former holder of one U S West share today holds Qwest stock worth $9.77, given the ratio at which U S West shares were converted into Qwest stock.

Jack Ott, a 29-year U S West veteran, said he, too, lost "a considerable amount of money."

Ott conceded it's hard to be objective about the Nacchio case.  Still, the former U S West regulatory planner has opinions on the matter.

"If I were a betting man, I'd say he'll probably be found guilty," said Ott, 65, who lives in Lakewood.  "Would I be sad? Not in the least."

Not everybody lost money, to be sure.  Denver resident Jack Beattie was lucky enough to sell his U S West shares before Qwest entered the equation.

"I was very fortunate," said Beattie, president of the Colorado unit of the Association of U S West Retirees and a 29-year veteran of the company.

But Beattie also understands the anger and frustration among fellow retirees over Nacchio.

"If he is guilty of wrongdoing, he should be held accountable and taken to task," Beattie said of the ex-chief executive.

Looking ahead, Beattie's focus isn't so much on Nacchio but on Qwest.  His hope:  The Denver telco overcomes its financial and legal woes and thrives.

"Retirees are going to have the best chance of receiving the benefits they were promised if Qwest is successful," said Beattie, 64, who was in charge of accounting at U S West's Yellow Pages division.

Other legal action Federal criminal and civil actions against ex-Qwest executives:

  Tuesday:  Former CEO Joe Nacchio is indicted by the U.S. attorney's office, charged with 42 counts of insider trading.

  July 14, 2005:  Former Chief Financial Officer Robin Szeliga pleads guilty to insider trading and agrees to cooperate with the government's investigation of other company executives as part of her plea.

  March 15, 2005:  The SEC, in a civil action, says Nacchio, Szeliga and former execs Robert Woodruff, Gregory Casey, Afshin Mohebbi, James Kozlowski and Frank Noyes orchestrated a "massive financial fraud" at Qwest from 1999 to 2002.  Casey, without admitting or denying wrongdoing, agrees in September to pay $2.1 million to settle the civil fraud charges.  He also is barred from working as an officer or director of a public company for five years.  Szeliga also has reportedly reached a settlement of the civil charges.

  February 2005:  Marc Weisberg, former executive vice president of corporate development, is charged with wire fraud and money laundering.  He has pleaded not guilty.  His trial is set for January.

  February 2003:  Former midlevel executives John Walker, Bryan Treadway, Thomas Hall and Grant Graham are charged with conspiring to inflate revenues by $34 million in connection with a sale of Internet services to Arizona schools in June 2001.  Walker and Treadway are acquitted by a jury in April 2004.  Hall pleads guilty to a misdemeanor of falsifying documents and is sentenced to a year's probation and fined $5,000.  Graham works out a plea agreement with the government to a single felony with probation.

Source: Rocky Mountain News or 303-892-2467,2777,DRMN_23910_4330839,00.html