Prison time satisfies former and current Qwest workers
General feeling is judge meted out right punishment
By Joanne Kelley And Chris Walsh
Rocky Mountain News
Sunday, July 28, 2007
Mimi Hull gleefully called out "Bye, Joe" as the former Qwest
CEO sped away from the courthouse where he received a six-year
prison sentence Friday. Minutes earlier, the retired U S West
executive had been doing what she called "a happy dance" as she
left the courtroom where a host of onlookers learned of Joe
Nacchio's fate following his April conviction for insider
"I would have liked a little longer sentence," said Hull,
president of the association representing retirees of the
regional phone company Qwest bought in 1999. "But now he's a
convicted felon going to jail."
Kochaniec Jr. © The Rocky
Mimi Hull, president of the Association of U S West Retirees,
thumbs up Friday after leaving the federal courthouse in
Denver where former Qwest CEO Joe Nacchio was sentenced.
Later, as Nacchio was driven away, Hull called out, "Bye, Joe."
Hull has been among the most outspoken critics of Nacchio, the
case has been followed closely by many retired and current
employees of Qwest.
Some of them lost their jobs and others lost money and benefits
after Qwest ran into severe financial difficulties during and
after Nacchio's reign.
Two Qwest workers, who didn't want to give their names because
they still work for the company, took the day off Friday to
attend the sentencing. They said they were happy about the
judge's order requiring Nacchio to forfeit $52 million.
Investors also turned out to bear witness to Nacchio's day of
"I needed to see the justice system work," said David Nilges, a
commercial real estate broker in Centennial. "My confidence in
corporate society is so eroded. I've got to believe a lot of
other people feel that way."
Nilges said he didn't own a lot of Qwest stock but "just enough
to make me mad" about what happened.
While he lamented the effect the jail time would have on
Nacchio's family, Nilges said it was important for the judge to
make an example of Nacchio.
"This man exemplifies the whole culture of CEOs. He was
greedy," Nilges said. "The judge jumped right on it."
Those attending the sentencing even included some who have
little connection to Qwest other than paying a monthly bill.
Dave and Diane Mills, of Loveland, have been living in Denver
this summer to explore the city. When they read about the
sentencing, they decided to check it out even though they had
never done something like that before.
"It's rewarding to watch how justice works," Diane Mills said.
Daniel Morris, of Aurora, showed up for the same reason.
"There are too many countries where people get away with
things," Morris said. "I'm glad I came. I'm proud to be
Morris said he wished U.S. District Judge Edward Nottingham
would run for office.
"I really admire that judge," he said. "I definitely would
(vote) for him if it were possible."
Nearby, on a street corner outside Qwest's downtown
headquarters, Margaret Crisp was selling flowers. She said two
of her customers made Nacchio-related purchases.
"They both told me they decided to buy flowers to celebrate
Nacchio getting sentenced," Crisp said.
She worked at Qwest in the facilities department for more than
three decades before leaving five years ago. Crisp estimates
she's lost about a third of her retirement funds since Qwest's
stock imploded under Nacchio.
"I think his (sentence) is fair, but it's too bad we'll probably
never really see much of that money," Crisp said.
Indeed, most investors will receive just pennies on the dollar.
James Gilbert, an electrician in Denver, thinks Nacchio got off
a little light.
"The penalties should have been stiffer," Gilbert said as he
smoked a cigarette in front of the Qwest building. "They have
to crack down on this or it won't end."
A Qwest worker, who declined to provide his name because
employees have been instructed not to talk to the media, said
the general feeling in the office is that justice has been
"I hate to see anybody go to jail and to see the impact on their
family, but we do have laws that you have to follow," he said.
"The rich shouldn't be any different. I'm glad it wasn't a big
fine and no jail time."
Trial at a glance
Joe Nacchio was king of the telecommunications industry, taking
Qwest public and then manufacturing a whirlwind deal to acquire
U S West. Nacchio, Qwest founder Phil Anschutz and a handful of
senior staff made millions. Then the bottom fell out and the
feds came calling, culminating in an April 20 conviction and
Friday's sentencing. Here's a recap of his monthlong trial:
• March 19: Jury selection begins
• March 20: Prosecution and defense lawyers give
their opening statements.
"This is a case about cheating," said James Hearty, assistant
"We are going to demonstrate and show and prove to you that the
accusations in this case are false," said Herbert Stern,
Nacchio's lead attorney.
• March 26: Former Qwest CFO Robin Szeliga says
she warned Nacchio repeatedly in late 2000 and early 2001 that
the company would have trouble meeting its 2001 revenue
projections. "I explained to . . . Mr. Nacchio that business
units were still concerned, very concerned, that they could not
meet the targets assigned to them."
• March 28: Prosecutors say they plan to call
Nacchio's former financial adviser to the stand to testify that
Nacchio tried to hide $90 million in assets by moving them into
his wife's name in February 2002.
• March 29: Former Qwest President and Chief
Operating Officer Afshin Mohebbi issued warnings to Nacchio,
including an e-mail message in which he called the revenue
targets a "huge stretch."
• April 2: Mohebbi testifies he sent several
memos to Nacchio expressing worries about whether the company
could meet its financial targets. He says he and Nacchio argued
about why Mohebbi was becoming involved in investor relations at
the company. "( It was) constantly robbing Peter to pay Paul,"
said Mohebbi, talking about how Qwest would shuffle its numbers
to make revenue targets.
• April 5: Qwest founder and Denver billionaire
Phil Anschutz takes the stand for the defense and recounts how
Nacchio told him he wanted to resign from the company after his
son attempted suicide. "We didn't spend any time talking about
compensation or about him staying at Qwest. We talked about his
• April 9: The defense rests its case after
calling only three witnesses and without putting Nacchio on the
• April 12: The jury receives its instructions
and begins deliberating.
• April 19: The jury, on its sixth day of
deliberations, finds Nacchio guilty on 19 of the 42 counts in
More legal woes
Nacchio's legal problems also are in the civil realm. Here are
the two major ones:
• Securities and Exchange Commission: seeking $216
million in "ill-gotten gains" and to bar Nacchio from ever
serving as an officer for a publicly held company.
• Class-action securities fraud case by Qwest investors.
kelleyj@RockyMountainNews.com or 303-954-5068