West retirees wishing for a conviction
After losing money with Qwest shares, many urge jail time
By Roger Fillion
Rocky Mountain News
Wednesday, December 21, 2005
They're glad Joe Nacchio got indicted. Now, these retirees
are crossing their fingers that the ex-CEO of Qwest will be
found guilty -- and punished.
"I think he's guilty. And I'm scared to death he's going to
get away with it," said Alice Peterson, a 31-year veteran of
U S West and its predecessor, Mountain Bell.
"If our legal system is any good at all," added the Wheat
Ridge resident, "they'll get him."
Peterson was among the U S West retirees pleased to hear
Tuesday's news of Nacchio's indictment on 42 counts of
Many lost money after Qwest bought U S West in 2000 -- and
their U S West stock was converted into Qwest shares.
Qwest's stock later plunged amid an accounting scandal while
Nacchio was in charge.
Each of the 42 counts against the former CEO carries a
potential penalty of 10 years in jail and a $1 million
fine. Federal prosecutors also want $100.8 million in
"I just hope that everything holds up in court and he is
convicted," said Shirley Eyre, an Aurora resident who
retired as a manager from U S West in 1989. That was 11
years before upstart Qwest swooped in and bought the former
Eyre, a 21-year U S West veteran, reckons she lost "several
thousand dollars" in losses "on paper" after the merger.
The 70-year-old recalls last selling some of her U S West
stock before the merger, when the shares were about $89
Qwest's shares closed Tuesday at $5.65. They traded as high
as $66 in March 2000. A former holder of one U S West share
today holds Qwest stock worth $9.77, given the ratio at
which U S West shares were converted into Qwest stock.
Jack Ott, a 29-year U S West veteran, said he, too, lost "a
considerable amount of money."
Ott conceded it's hard to be objective about the Nacchio
case. Still, the former U S West regulatory planner has
opinions on the matter.
"If I were a betting man, I'd say he'll probably be found
guilty," said Ott, 65, who lives in Lakewood. "Would I be
sad? Not in the least."
Not everybody lost money, to be sure. Denver resident Jack
Beattie was lucky enough to sell his U S West shares before
Qwest entered the equation.
"I was very fortunate," said Beattie, president of the
Colorado unit of the Association of U S West Retirees and a
29-year veteran of the company.
But Beattie also understands the anger and frustration among
fellow retirees over Nacchio.
"If he is guilty of wrongdoing, he should be held
accountable and taken to task," Beattie said of the ex-chief
Looking ahead, Beattie's focus isn't so much on Nacchio but
on Qwest. His hope: The Denver telco overcomes its
financial and legal woes and thrives.
"Retirees are going to have the best chance of receiving the
benefits they were promised if Qwest is successful," said
Beattie, 64, who was in charge of accounting at U S West's
Yellow Pages division.
Other legal action Federal criminal and civil actions
against ex-Qwest executives:
Former CEO Joe Nacchio is indicted by the U.S. attorney's
office, charged with 42 counts of insider trading.
• July 14, 2005:
Former Chief Financial Officer Robin Szeliga pleads guilty
to insider trading and agrees to cooperate with the
government's investigation of other company executives as
part of her plea.
• March 15, 2005:
The SEC, in a civil action, says Nacchio, Szeliga and former
execs Robert Woodruff, Gregory Casey, Afshin Mohebbi, James
Kozlowski and Frank Noyes orchestrated a "massive financial
fraud" at Qwest from 1999 to 2002. Casey, without admitting
or denying wrongdoing, agrees in September to pay $2.1
million to settle the civil fraud charges. He also is
barred from working as an officer or director of a public
company for five years. Szeliga also has reportedly reached
a settlement of the civil charges.
• February 2005:
Marc Weisberg, former executive vice president of corporate
development, is charged with wire fraud and money
laundering. He has pleaded not guilty. His trial is set
• February 2003:
Former midlevel executives John Walker, Bryan Treadway,
Thomas Hall and Grant Graham are charged with conspiring to
inflate revenues by $34 million in connection with a sale of
Internet services to Arizona schools in June 2001. Walker
and Treadway are acquitted by a jury in April 2004. Hall
pleads guilty to a misdemeanor of falsifying documents and
is sentenced to a year's probation and fined $5,000. Graham
works out a plea agreement with the government to a single
felony with probation.
Source: Rocky Mountain
fillionr@RockyMountainNews.com or 303-892-2467