The Association of U S West Retirees



Headed to Jail
Nacchio Set to Start Serving Six-Year Sentence After Long Legal Battle
By Dionne Searcey

The Wall Street Journal
Tuesday, April 14, 2009

Joseph Nacchio, the former chief executive of Qwest Communications International, Inc., is expected to head to federal prison Tuesday, nearly two years after a judge sentenced him to serve six years for insider trading.

Mr. Nacchio, 59 years old, is slated to arrive at the Schuylkill minimum security camp in Minersville, Pa., at noon Tuesday.  A federal appellate panel denied a motion for bail Monday afternoon.  His attorneys asked U.S. Supreme Court Justice Stephen Breyer, who oversees the 10th Circuit Court of Appeals in Denver, for bail but as of late Monday the request had gone unanswered.

Mr. Nacchio's lawyer, Maureen Mahoney, declined to comment.

Mr. Nacchio was convicted in 2007 of 19 counts of insider trading for selling $52 million in Qwest stock while knowing the company's finances were faltering.  His legal journey since then has been a roller coaster of rulings with a federal panel tossing out his conviction, only to have that decision later overruled, and then several deadlines to report to prison extended at the last minute after he filed appeals.

The legal twists have been closely followed by a group of former employees who lost their savings under Mr. Nacchio's leadership and desire to see him behind bars.

"Our people have been so up and down...there have been so many put-offs and stays to the point of ridiculousness," said Nelson Phelps, the executive director of a group representing Qwest retirees.  "It really has soured and angered so many of our people."

The start of Mr. Nacchio's prison sentence doesn't mark the end of his legal battles, however.  Ms. Mahoney has appealed his conviction to the U.S. Supreme Court and said in a court filing she expects others including the U.S. Chamber of Commerce, to file briefs in support.

An attorney for the Chamber said the brief would ask the court to clarify the internal information that can make CEOs guilty of insider trading.  Mr. Nacchio's attorneys also have asked for a new trial after a witness against him recently offered sworn statements that seemed to conflict with testimony at his criminal trial.

Mr. Nacchio, whose legal bills have been paid at least in part by Qwest, also faces a civil suit from the Securities and Exchange Commission, which was on hold while other legal issues tied to his criminal case were clarified.  The SEC is seeking to bar him from serving as a director or officer of another public company as well as seeking to obtain various ill-gotten gains and penalties.

Mr. Nacchio requested to spend his six years in Schuylkill because of its proximity to his wife, who has a home in New Jersey.  According to a prison spokesman, Mr. Nacchio, inmate number 33973-013, will join 287 others and be offered meals that are "heart-healthy alternatives to processed or fried foods" as well as a dormitory-style cubicle he will share with another prisoner.  He will be assigned a job and receive pay of up to 40 cents an hour. The facility has an outdoor walking track and indoor gymnasium.

Write to Dionne Searcey at