Nacchio guilty ... of trying to best AT&T
By Stephanie Mehta
Friday, April 20, 2007
Former Qwest CEO Joe Nacchio was convicted of
insider trading yesterday by a U.S. jury in Denver.
Even before he became a convicted felon, Nacchio had a
fascinating life story.
He is a son of a longshoreman who rose up the ranks of AT&T,
annoying many on the way. He was determined to bold and break
with AT&T's conventional and sometimes staid culture. He
apparently was the guy who came up with the brilliant idea
during the long-distance wars with MCI and Sprint to pay
customers $100 to come back to AT&T.
When he was passed over for the presidency at AT&T, and a
corporate shuffle was in the offing, Nacchio jumped ship for a
lucrative offer to run Qwest, then a little known upstart
seeking to compete with AT&T. Almost as soon as he left Ma
Bell, he began putting down his old company openly and
vociferously -- well beyond the spirited jabs CEOs normally take
In one particularly harsh incident, the company sought to air an
advertisement in which an executive named "Bob" is on a ledge,
set to plunge to his death. When the crowd finds out he works
for a "bid long distance company," they urge him to jump.
Industry wags widely believed "Bob" was meant to be Bob Allen,
AT&T's longtime CEO. Once word of the insensitive ad got out,
it was pulled.
Besting AT&T seemed to drive Nacchio. It drove him to turn
Qwest. a small long-distance operator, into a full-scale
communications company by acquiring U.S. West, the Denver-based
Baby Bell. (Using Qwest's rich stock to buy a company with real
cash flows and assets.) It was almost as though he was trying
to prove himself to the snooty executives back East who passed
Did an unhealthy AT&T obsession drive Nacchio to do unnatural
things in the business?
Yesterday's verdict wasn't about that: Nacchio was found guilty
of personal enrichment at shareholders' expense. But the
testimony painted a picture of a man clearly obsessed with
winning -- perhaps at any cost.