Did Nacchio pass 4-Way Test? No way
The way Jo Lynne Whiting sees it, former Qwest CEO Joe Nacchio should have used the Rotary's Four-Way Test.
That test, which the civic group adopted in 1943, goes like this:
1) Is it the truth? 2) Is it fair to all concerned? 3) Will it build goodwill and better friendships? 4) Will it be beneficial to all concerned?
"How much misery and loss could have been avoided if Qwest had been able answer 'Yes' to each question on the Four-Way Test?" Whiting said in a July 6 speech to local Rotarians.
I suppose it's easy to overlook the Four-Way Test whenever there's an opportunity to bag hundreds of millions of dollars in stock-option profits. Fortunately, there are folks such as Whiting - who retired from Qwest in 2000 - to put things in perspective.
In June 2002, Whiting flew to Dublin, Ohio, where Qwest was hiding, I mean, holding its annual shareholders meeting, 1,200 miles from its Denver headquarters. Standing 15 feet from Nacchio, Whiting took the microphone and addressed Qwest co-chairman Philip Anschutz, who was not even at the meeting:
"You and the rest of the board should terminate Joe Nacchio 'for cause,"' she said, gaining loud applause.
Whiting had stated the obvious to the oblivious. Just seven months earlier, Qwest's board had given Nacchio a raise and more stock options, even as the company's debts mounted, its accounting problems surfaced and its stock tanked.
"I just couldn't believe that I could be on the periphery and see such a pattern of abuse, and that board members, who ought to be more informed, were taking the opposite action," Whiting said Monday.
Nacchio - who sold $300 million in Qwest stock - resigned two weeks after Qwest's 2002 annual meeting.
He has since worked as a private telecom consultant and investor in New Jersey. In June, it was reported that Nacchio even owns part of a company, BCN Telecom, and sits on its board.
The Securities and Exchange Commission is expected to file a lawsuit against Nacchio later this week for his role in Qwest's $2.5 billion accounting fraud.
Whiting has been counting the days.
"He told us (employees) that we all need to be held accountable," Whiting said. "He needs to be held accountable."
Whiting, who turns 56 today, has been retired for more than four years. Her quaint values weren't a good fit at Nacchio's Qwest. She was raised on a ranch that her ancestors settled north of Dallas. She came to Colorado in 1971 to work for Mountain Bell as a customer service rep. Mountain Bell became US West, which became Qwest.
Whiting rolled with the changes.
She completed her MBA at the University of Colorado at Denver and worked her way through the corporate ranks. She was vice president at Qwest's former phone-directory business.
She said she left after Nacchio shifted back the publication date of Qwest's phone directories by one month, allegedly to inflate revenues. "The only reason it was being done was to manipulate the financials," Whiting said. And it would only make the next year's targets even more impossible to meet.
After quitting, Whiting sold 80 percent of her Qwest holdings - something she could not do as an employee.
That meant she would only lose tens of thousands of dollars, instead of hundreds of thousands, as Qwest stock plunged to nearly $1 a share.
"I should have sold more," she said. "For Joe Nacchio to make hundreds of millions, he had to destroy billions" worth of the company's value.
For Whiting, Nacchio remains an emotional stain on her 29-year career. She still feels obligated to demand his head.
"I recruited people to work for the company. I represented its services to customers. For me, the trust of a lot of people is at stake."
She not only wants him sued. She wants him prosecuted.
"If there are only civil charges, I'll be disappointed," she said. "This should be a signal to everyone in business that ethics are important and that greed has to be tempered."
If the Rotary's Four-Way Test didn't work, maybe something else will.
Al Lewis' column appears Sundays, Tuesdays and Fridays. Reach him at 303-820-1967 or email@example.com.