we ever see "I-Spy"defense?
By Al Lewis, Staff Writer
Tuesday, July 10, 2007
Let's throw Joe Nacchio in prison before we hear his defense.
The former Qwest CEO, convicted in April on 19 counts of illegal
insider trading, will be sentenced July 27. Prosecutors on
Friday recommended he serve seven years and three months and pay
$19 million in fines, plus they want $52 million back from his
That's not enough for some people.
"If the feds really want to stop this, they should hang him,"
someone calling themselves Steve wrote on my blog over the
weekend. "Many U S West employees would be happy to pull
I know several of them myself. Many lost fortunes and
livelihoods when Qwest crashed to $1 a share from more than
$60. Many blame Nacchio, exclusively, for every penny of this
Too bad we never heard much of Nacchio's defense. Nacchio
declined to testify and hardly called any witnesses. A trial
that was expected to take eight weeks took less than four as
Nacchio's accomplished legal team rolled over and played dead.
Why didn't Team Nacchio fight?
One explanation is that Nacchio's attorneys may have figured
they didn't have to fight. The prosecution's case was largely
circumstantial. And, in my estimation, prosecutors really
didn't connect all the dots until their closing and rebuttal
A second explanation is that Nacchio really didn't have a viable
defense -- but you would think any legal team that bills by the
million can come up with something.
A third explanation is that the government hobbled Nacchio's
defense before it could be presented to a jury.
In pretrial court documents, Nacchio had promised what I call
the "I-Spy" defense. Nacchio's lawyers argued that Qwest was
due to receive top-secret government contracts that only Nacchio
and a handful of others knew about. With this secret revenue,
Qwest would have made its projections,
Nacchio would not have gotten into all this trouble with his
stock options and America would be safer.
But this revenue never came, possibly because Nacchio refused to
bend over for the U.S. National Security Agency when it demanded
phone records of customers after the Sept. 11 attacks. Nacchio,
as has been widely reported, was perhaps the only telecom
executive in America who questioned this wholesale dump of
private information, and now he's paying the price for his
disobedience -- or so the defense goes.
Team Nacchio, however, never made this I-Spy defense to the
jury. Maybe it was a red herring. Or maybe he really was a spy
-- and they silenced him.
Who are they? Well, you know, them. Various government types.
Info slow in coming
Somebody in the government is supposed to redact and release
documents and transcripts from closed pretrial proceedings in
Nacchio's case that are subject to the Classified Information
Procedures Act. I wish I could tell you who -- but then maybe
they'd have to kill me.
Judge Edward Nottingham has said these documents should be made
public, but nondescript government agencies are supposed to have
a chance to redact them first, removing sensitive security
information. So far, very little of this material is available
as these secret bureaucrats dawdle, so I have no way of really
knowing whether Nacchio's I-Spy defense was viable.
"The classified information at issue is relevant, admissible and
can be used at trial, subject to further proceedings under
CIPA," Nottingham ruled in one of the few redacted orders made
So why didn't Nacchio present it?
Now, Nacchio is headed for prison. My best guess is that on
July 27, Nottingham will give him 30 to 45 days to get his
affairs in order and then report. I don't believe this judge
will allow such a high-profile defendant to be free pending
appeal, though anything is possible. Meantime, Nacchio isn't
likely to earn any points through contrition, since it's clear
he believes in his innocence.
Nacchio is preparing a no-holds-barred assault on the
government's victory. Marshaling deep financial resources, he
recently added Maureen Mahoney, a seasoned Washington, D.C.,
appellate and Supreme Court lawyer, to his legal team.
I expect Team Nacchio will make all of the garden-variety
challenges, including whether Denver was the proper venue, given
its lynch-mob mentality, whether the judge gave proper jury
instructions and whether the judge erred in this ruling or that.
The court will hear it all.
I don't think we've seen the end of the I-Spy defense, either.
Can the government on one hand prosecute a defendant and on the
other take away his defense? And is this what happened to
Right now, we have no way of knowing. We never heard Nacchio's
defense. It's classified. Anybody got a rope?
Al Lewis' column appears Sundays, Tuesdays and Fridays.
Respond to him atdenverpostbloghouse.com/lewis,