Feds: No act existed against Qwest
denies defense claims of retaliation over Qwest's refusal to aid
By Kelly Yamanouchi
Tuesday, October 23, 2007
Qwest was not retaliated against after former chief executive
Joe Nacchio refused to participate in the government's
warrantless-wiretapping program in 2001, federal prosecutors
argued in court documents unsealed Monday.
In the filing of heavily redacted documents, the U.S. government called into question
Qwest's expectation of winning government contracts and noted
that Qwest was named a strategic vendor for a contract called
Nacchio had alleged that the National Security Agency asked
Qwest in February 2001, more than six months before the
terrorist attacks of 9/11, to participate in a wiretapping
program Qwest thought was illegal.
That revelation could affect President Bush's efforts to grant
legal immunity to large telecommunications companies that argued
they were acting in good faith to work with the government to
fight terrorists after the attacks. Congress is looking
into the wiretapping and debating an immunity grant.
While Qwest refused to participate, other telecoms, including
AT&T, have been sued in connection with their alleged
involvement in the surveillance program.
U.S. District Judge Edward Nottingham rejected multiple requests
from Nacchio to introduce information about the government's
phone-tapping program as part of his defense against
The judge said the connection between Nacchio's refusal to
cooperate with the government and Qwest's not getting a federal
contract was "extremely weak."
Nacchio wanted to show that he didn't sell Qwest stock illegally
in early 2001 and that he was upbeat about Qwest's stock because
he had top-secret information that the company would win
lucrative government contracts. Nacchio at the time sat on
a number of key government telecommunications committees.
Nacchio was convicted on 19 counts of illegal insider trading in
April. Nacchio, who was sentenced to six years in prison,
But in a document released Monday and dated April 2, 2001, Qwest
is shown as one of more than 30 strategic vendors that were part
of the "Eagle Alliance" team awarded a contract for the
Groundbreaker project, though Qwest was not included as one of
three alliance strategic partners.
Groundbreaker was the NSA's contract to outsource certain
telecom work after a fire destroyed one of its large data
The government also sought to discredit the idea that Nacchio
could expect to win a contract, objecting to a claim by Nacchio
that a government agency whose name was redacted in the
documents "understood that only Qwest could deliver the network
Nacchio's attorney, Herb Stern, could not be reached for comment
The sealed documents involving closed-door discussions before
and during Nacchio's trial were released at the request of The
The documents released Monday include a memorandum of an
interview of James Payne, a former Qwest senior vice president
and general manager of the government- services division, who
described a meeting with a customer as one of the meetings
Nacchio called "howdy calls," and "not a meeting to discuss
The Payne-interview memo gives insight into the high-pressure
culture at Qwest under Nacchio.
"Qwest management in
would tell him to 'go get this' and to 'make it happen.' ...
Payne reminded them frequently that it was not that easy," the
memorandum reads. "It was frustrating. The
government procurement process took years. Qwest
management was dealing in 'minutes' and Payne was dealing in
Another section reads, "Payne said, 'hope is not a strategy' and
he would not talk about it."
Payne left Qwest in May 2006 when he was told "they no longer
had confidence in his guidance and let him go," according to the
Kelly Yamanouchi: 303-954-1488 or