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'Rude awakening' for Nacchio
Humbling existence likely awaits former Qwest CEO in any prison
By Jeff Smith
Rocky Mountain News
Tuesday, June 5, 2007

Former Qwest CEO Joe Nacchio might not encounter violence in prison, but he faces tedious days devoid of any of the control and amenities he once took for granted.  "I've worked with a lot of white-collar offenders," said Shakeerah Marhefka, assistant director of Federal Prison Consultants of Wilmington, Del.  "When they come from money and from running a company, a lot of them are very arrogant.  Well, he's going to have a rude awakening."

A highly regimented schedule with strict, petty rules.  Menial jobs with little variety, paying 12 cents to 40 cents an hour.  Telephone calls limited to 300 minutes a month.  No e-mail, Internet access or gadgets like an iPod or BlackBerry.

And these are the conditions inside a minimum-security federal prison camp.  Nacchio can expect worse if he gets assigned to a higher security prison instead -- and it could be a close call, experts said.  Nacchio's Colorado attorney John Richilano declined to comment for this article.

Nacchio is scheduled to be sentenced in the U.S. District Court of Colorado on July 27, after being convicted this spring on 19 counts of insider trading.

Nacchio's legal team is working hard behind the scenes to mitigate his sentence.  His attorneys also made fresh motions Monday for acquittal, a new trial and change of venue, and have hired an appellate specialist to try to overturn the conviction.

Insider-trading sentences are driven in large part by the amount of money involved in the crime.  Nacchio was found guilty on 19 counts totaling $52 million of Qwest stock sales in April and May 2001.

"That's a big number," said John Webster, managing director of National Prison and Sentencing Consultants, based in Providence, R.I.  It will help that Nacchio was acquitted on 23 counts, Webster said.

Being a model citizen won't help much either way, Webster said.  "Every one of these guys had a squeaky clean background -- (Enron's) Ken Lay, Martha Stewart.  A lot of people think you get a free pass because you're a first-time offender, but it doesn't work that way."

Experts have speculated that Nacchio will be sentenced to around 10 years in prison, plus or minus a few years.  Federal Bureau of Prisons spokeswoman Felicia Ponce said there's no rule on where to designate a convicted felon based on his sentence.  Rather, it will depend on a variety of factors.

The Federal Bureau of Prisons tries to place prisoners within 500 miles of their primary residence, she said.  The Nacchios have multimillion-dollar homes in Mendham, N.J., and Jupiter, Fla., and could designate either location as their preference.

Marhefka said there's a "big possibility" Nacchio will get an unfenced, dormitory-style federal prison camp if he's sentenced to 12 years or less.  Webster was a bit more skeptical and put the magic number at roughly 10 years.

Former Enron Chief Executive Jeffrey Skilling, who was sentenced to 24 years, is in a low-security prison in Minnesota.  Former WorldCom CEO Bernie Ebbers is serving 25 years in a medium-security prison in Louisiana.

Nacchio probably has hired specialists to help him get into a minimum-security prison camp, experts said.  Still, even a prison camp will be a big adjustment, consultants say.

"There really aren't any Club Feds anymore," Webster said.  "The day is highly regulated," and the consequences can be severe for rule violations.

Marhefka said Nacchio won't be able to take family photos with him, and normally won't be able to call his family the first two weeks while he undergoes orientation.  He may also have to wait up to a week to 10 days to get medication, she said.

"I advise clients to buy a cheap Timex watch, and wear white sneakers, white pants, a white T-shirt."  He may be able to wear a religious necklace and may be allowed to bring some money with him, she said.  If not, his family can wire money to him.

She said Nacchio will have to buy all his personal items, such as deodorant, underwear and socks, from the prison commissary.

Meals are at set times, beginning at 6 a.m. each day.  Phone calls and mail are monitored.  In some crowded prisons, visitation is based on a point system.

For an executive used to taking charge, "the hardest adjustment is their loss of control," Webster said.  "They have no one and every part of their day is controlled and regimented.  The second biggest adjustment is getting used to the abject boredom.  Prison is a very, very boring place."

Said Marhefka:  "Once he goes to prison, he's just an inmate.  They won't care who he is, what kind of money he made."

Former executives like Nacchio, she added, "need to go in and not discuss the crime and be humble -- because they are no longer free and the federal government owns them."

Job opportunities at a typical prison camp are limited, consisting mostly of orderly, food-service and maintenance work.  Many white-collar criminals prefer prisons on military bases because they tend to offer more diverse jobs, such as warehousing and clerical, Marhefka said.  Some prisoners are able to do jobs like tutoring or substance abuse work.

Safety shouldn't be a concern.  "The only blood he's going to see in a federal prison camp is if he cuts himself shaving," Webster said.  "Altercations are more pushing and shoving, like in a schoolyard.  He won't be assaulted, he won't be raped.  None of those conditions occur in a federal prison camp."

If, however, Nacchio gets sent to a low- or medium-security prison, the possibility of violence will go up.

Life in a federal prison camp Minimum security

  Toughest adjustment for former executives:  Loss of control, boredom; highly regimented days with meals beginning at 6 a.m.

  Sleeping arrangements:  Dormitory or barrack-style rather than cells with bars

  Security:  Little or no fencing

  Phone calls:  300-minute limit a month; calls monitored, limited to 15 minutes each

  Visitation:  Friday afternoons and evenings, weekends until midafternoon

  Internet access:  Not available; a few prison pilot programs offer limited e-mail access.

  TV:  Yes

  Books:  Well-stocked libraries at most prisons;  books can be shipped in from publishing companies, families.

  Jobs:  Not much variety -- orderly, food service, maintenance;  some prisons have more options, such as warehousing, clerical jobs, tutoring;  pay rates 12 to 40 cents an hour.

  Danger:  Schoolyard-type skirmishes possible, but violent attacks or sexual assaults as likely as in a corporate office environment.

  Personal items:  Deodorant, toothpaste, underwear, etc., can be purchased at prison store; can buy a radio with headset (but no iPod); limited spending of $290 a month

  Money:  Family can wire money

Sources: Federal Prison Consultants, National Prison Consultants

'Best' places to serve time in federal prison

Minimum security facilities, known as federal prison camps, are usually best suited for disgraced CEOs and other white-collar criminals.  In theory, inmates in these camps show no risk of violence or escape.  Both shoe-mogul Steven Madden and Martha Stewart are FPC alums.  Prison camps have a relatively low staff-to-inmate ratio, dormitory-style accommodations and little to no fencing.  Some minimum security facilities stand on their own, but many are satellite facilities adjacent to larger and more secure institutions, particularly low-security federal correctional institutions.

ASHLAND, KY.

Prisoner perks: 
Inmates can partake in Ashland's "wellness" program, which focuses on nutrition, aerobic exercise and stress reduction.

BASTROP, TEXAS

Prisoner perks: 
Less than 30 miles from the Austin Airport, Bastrop is convenient for visitors.

DUBLIN, CALIF.

Prisoner perks: 
Dublin's "Bookmobile" service allows inmates to keep up with their reading.

DULUTH, MINN. (formerly Duluth Air Force Base)

Prisoner perk:
  Duluth has several musical instruments for inmate use, including a piano, drums and acoustic guitars.

ENGLEWOOD (in Littleton)

Prisoner perks: 
Prisoners can blow off steam by playing pool, pingpong or foosball.

LOMPOC, CALIF.

Prisoner perks:
  Inmates can stay in shape using Lompoc's full gym.

MONTGOMERY, ALA.

Prisoner perk:
  This stand-alone facility includes vocational training to teach prisoners to be cooks, housekeepers, paralegals and painters.

OTISVILLE, N.Y.

Prisoner perks:
  Jewish prisoners can enjoy one of the biggest and most active religious programs at Otisville.

PENSACOLA, FLA. (Pensacola Naval Air Station)

Prisoner perk:
  Inmates can work on the base and interact with Navy personnel during daylight hours.

SHERIDAN, ORE.

Prisoner perks:
  Prisoners can study to be personal fitness trainers or landscapers.

TEXARKANA, TEXAS

Prisoner perk: 
A track as well as a bocce pit, a basketball court and several fields are available.

YANKTON, S.D. (formerly a college)

Prisoner perks:
  This stand-alone camp offers inmates music lessons and intramural team sports.

Source: Forbes.com

What's next?

Judge Edward Nottingham will sentence former Qwest CEO Joe Nacchio on July 27, relying in part on the presentence investigation report by a U.S. probation official.  Nacchio's team will try to keep him out of prison pending appeal, but he could be ordered to begin serving time.

The Federal Bureau of Prisons will designate a prison, considering the sentence, Nacchio's request, the judge's recommendation and other factors.  The goal, but not mandate, is to place prisoners within 500 miles of their primary residence.  Nacchio has homes in New Jersey and Florida, and could designate his preference for being close to either location.

Experts say the expected sentence of about 10 years, plus or minus, could put Nacchio on the borderline between a minimum-security federal prison camp and a higher security prison.

smithje@RockyMountainNews.com or 303-954-5155

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