AUSWR
The Association of U S West Retirees
 

 

 

Some glad Nacchio going to prison but say it's still not enough
By Colleen Slevin, AP
money.aol.com
Saturday, July 28, 2007


DENVER (AP) - Behind a bank of television cameras and photographers outside the federal courthouse, Karen Drysdale snapped a photograph Friday with her disposable camera, her 5-month-old granddaughter asleep in the stroller next to her.

Federal prosecutors had just finished a press conference about former Qwest CEO Joe Nacchio's 6-year sentence for insider trading.  U.S. Attorney Troy Eid said the sentence and the $71 million in fines and forfeitures Nacchio has to pay showed the justice system can work even "in this cynical age."

Drysdale, a kindergarten teacher's assistant visiting from Santa Fe, N.M., said she was glad Nacchio was headed to prison.  Having bought stock (not Qwest) for her granddaughter and 3-year-old grandson to help pay for their college education, she wasn't sure what justice would mean for people who did lose money during Qwest's multibillion-dollar accounting scandal.

"How many years did it set back the stockholders?  Put it that way," said Drysdale.

"I think it's a good thing to know there are consequences to greed and I hope that others in similar positions of authority really think about what they're doing," said Donnetta Mitchell of Salt Lake City, a member of the Association of U S West Retirees, which represents retirees from the former Baby Bell and Qwest, which took over U S West Inc.

Mitchell, president of the retirees' association for Utah, Idaho and Montana, said there are many in her group who won't recover for years.

Thousands of investors -- many of them members of the retirees' association -- lost money when Qwest Communications International Inc.'s stock price plummeted from more than $60 a share in 2000 to just $2 a share in 2002.  The scandal forced Qwest, a primary telephone service provider in 14 mostly Western states, to restate $2.2 billion in revenue.

Qwest retiree Barbara Sweeney of Lake Oswego, Ore., said she lost "hundreds of thousands of dollars" after she retired in August 2001 because the company froze its contribution to her 401(k) plan and the stock price plunged.

At 63, Sweeney said she's better off than other retirees because she can depend on her late husband's pension and Social Security payments and, with no children, college bills didn't tap her savings.  Still, she's put off her original plans to travel internationally and carefully watches her money to make sure it lasts through her 70s and 80s.

Nacchio was fined a maximum $19 million and ordered to forfeit $52 million from stock he sold when he knew the Denver-based telecommunications company was in trouble but investors didn't.

"I just wish he would pay more than that and have a longer jail time," Sweeney said.

http://money.aol.com/news/articles/_a/some-glad-nacchio-going-to-prison-but/n20070727194509990005