Nacchio retains his firm grip on charm
By Al Lewis, Columnist
Thursday, March 22, 2007
Joe Nacchio took my hand in one of those long, friendly grips
during a court recess on Tuesday.
"I know I shouldn't talk to you," he said, leaning into me as we
stood in the courtroom. "But I really appreciated the first line
on that NSA column."
I often forget what I write so it took me a moment to recall the
line. It was indeed one of the nicest things I ever wrote about
the former chief executive of Qwest. On May 12 last year, I
"It pains me to say this, but perhaps no telecommunications
executive has done more to protect American civil liberties than
Joe Nacchio - an argument that bodes well for the former Qwest
CEO in his upcoming trial. ...
"Nacchio just said 'no' when the U.S. National Security Agency
demanded phone records of Qwest customers after the Sept. 11
attacks. Executives at AT&T Inc., BellSouth Corp. and Verizon
Communications Inc. did not have any such concern for customers'
privacy." I gave Nacchio a puzzled look as I recalled these
lines. It's easier to remember less flattering things I've
"I know that had to kill you," Nacchio smiled.
"It didn't kill me," was all I could think of to say in
If Joe and I have a relationship, it's been a strained one. The
poor guy must think I relish watching him sweat under the
inquisitive eyes of the jury. But I don't. I've always thought
of Nacchio as just another overpaid CEO who made some bad calls
and nearly blew up our local phone company. Beyond that, and the
thousands of people he destroyed doing it, I've always found him
personable, though sometimes argumentative.
The truth is, I like Nacchio. Who else has given me so much to
I am also a fan of Nacchio's attorney, former federal prosecutor
and judge, Herbert Stern. I've recently read through volumes of
his writings and watched several hours of instructional
videotapes for attorneys that he made in 1985.
"You look so much better in person," I told Stern, much like the
groupie I've become. I was flattered that he recognized me. He
even smiled and responded, "I am Dorian Gray in reverse."
This was a reference to a literary figure who bartered his
eternal soul in exchange for eternal youth. I'm not sure if
Stern was intimating that he had aged a bit since 1985, or that
he would never, ever barter with his eternal soul.
Watching the trial, I thought assistant U.S. Attorney James
Hearty did a marvelous job of laying out the case against
Nacchio. At one point, he said that Nacchio had canceled a
pre-announced plan to sell his stock options so that he could
embark on a far more aggressive sales plan.
"The evidence will show Mr. Nacchio's (original) plan solved all
his problems but one," Hearty said. "It didn't allow him to sell
his shares fast enough."
In an hour and a half, Hearty explained how Nacchio talked up
Qwest stock as he sold it on the market. It was a
straightforward description of the old pump-and-dump. Then in
two and a half hours, Stern muddled it with details.
Qwest founder Phil Anschutz lavished Nacchio with stock options
to lure him from AT&T, Stern said. Anschutz even paid $11
million of his own money to buy Nacchio out of his AT&T options.
The Qwest options Nacchio received were "golden handcuffs,"
Nacchio wanted to quit as early as January 2001 after his son
attempted suicide, Stern said. But Anschutz and the board kept
pouring on the options.
These options could only be cashed in specific periods and had
expiration dates. When Nacchio sold stock, it was because he had
"It was use them or lose them," Stern said.
Stern promised to bring Anschutz to the stand to prove this
claim. It will be fun to see the guy who made billions at Qwest
defend a guy who made only hundreds of millions.
In his opening argument, Stern made only a passing reference to
Nacchio's "I spy" NSA defense. In pre-trial arguments, Stern has
argued that only Nacchio knew of secret government contracts
Qwest was about to land in 2001. This knowledge added to
Nacchio's belief that Qwest would meet its aggressive growth
projections, even at a time when other companies were
forecasting a downturn.
Based on Stern's opening, I predict we won't hear much of the "I
spy" defense. It has already served its purpose. It kept
prosecutors busy as they prepared for trial. They had to go into
special, lead-lined rooms - like secret agent Maxwell Smart -
every time they wanted to counter this argument. It tied them up
for countless hours.
The "I spy" defense also portrayed Nacchio as a hero. He didn't
turn over customer information to the government, like the
others. So you see, even Nacchio's stubbornness has a bright
Ultimately, Nacchio's guilt or innocence on 42 insider-trading
charges is a technical, legal matter for the jury to decide. I
wish him well in this trial.
And it doesn't kill me to say it.
Al Lewis' column regularly appears Sundays, Tuesdays and
Fridays. Respond to Lewis at denverpostbloghouse.com/lewis,