AUSWR
The Association of U S West Retirees
 

 

 

Current, former employees feel no sympathy
By Kimberly S. Johnson and Aldo Svaldi, Staff Writers
Denver Post
Wednesday, December 21, 2005

Past and present Qwest employees said Tuesday's indictment of former chief executive Joe Nacchio brought to justice the man they blame for sinking the company's stock, reputation and retirement plans.

"I have been waiting years for this," Qwest project manager Paul Gabriel said.  "He destroyed the company."

As employees at Randy Ehle's Qwest office in northwest Denver received news of the indictment, the mood was "greatly improved," he said.

"There were a lot of smiles on people's face," the remote-installation technician said.  "It was just relief;  everyone was waiting for this decision for quite a while, just to get some closure."

However, Qwest employee Cory Parsons said he expected that federal prosecutors will have their work cut out for them. 

"It will be difficult to prove criminal wrongdoing," Parsons said.  "I don't think he knew the telecom market would collapse the way it did."

Nacchio was indicted on 42 counts of illegal insider trading, which allegedly netted him $100.8 million between January and May 2001.  If convicted, he faces up to 10 years in prison on each charge and forfeiture of his gains.

"It's still a small price for him to pay.  I lost a fairly large amount," said retiree Norman Smith of Leawood, Kan., who declined to say how much money he lost in Qwest.  "It's almost mind-boggling.  It's sad to say that for that kind of robbery he would get a maximum of 10 years (per count).

For many retirees, there is little closure because they've had to readjust their lifestyles to compensate for 401(k) plans that suffered when Qwest's stock plunged from more than $60 a share to $2.  It closed Tuesday at $5.65, down 12 cents.

"It is the innocent -- the employees, investors and customer -- who are now paying the price for Nacchio's mishandling of the company as Qwest works leaner, and harder, to overcome the devalued ratings and the government penalties," said Roger W. Hancock, a Qwest employee in Auburn, Wash.  "I am still employed at Qwest, but the uncertainty of life after retirement still looms."

"With 29 years of service, I am eligible to retire but am unable to do so, at least partly due to the lowered values in the retirement plans," Hancock said.

Employees and shareholders questioned what they would receive from the indictment, besides vindication, should Nacchio be convicted.

"It doesn't go to the people who purchased his shares.  They should be deserving of it to cover their losses,"" said Denver shareholder advocate Gerald Armstrong.  "He (and his conduct are) a problem for the company's image and the whole picture of the past operations.  It's a black eye for Denver."

Qwest technician Rick Chalmers described outrage over what happened to the old U S West after it merged with Qwest in 2000.

U S West was one of the original seven "Baby Bells" spun off from AT&T Corp. in the early 1980s.

"We were finally able to take down a corrupt individual," Chalmers said of Tuesday's indictment.

Qwest analyst Albert Greuter said Nacchio should pay back more than what federal prosecutors are seeking, if he is found guilty.

Greuter said he would like to see Nacchio give up all the stock profits he earned during his association with Qwest.

"This will close another chapter and let the company go forward," Greuter said.

Staff writer Aldo Svaldi can be reached at 303-820-1410 or asvaldi@denverpost.com.

Staff writer Kimberly S. Johnson can be reached at 303-820-1088 or kjohnson@denverpost.com

http://www.denverpost.com/business/ci_3328720