View Full Version : NSA Domestic Surveillance Began 7 Months Before 9/11, Convicted Qwest CEO Claims

10-12-2007, 08:40 AM
NSA Domestic Surveillance Began 7 Months Before 9/11, Convicted Qwest CEO Claims


"It's the kind of capability if we'd had before 9/11 might have led us to be able to prevent 9/11." - Dick Cheney (http://www.yourbbsucks.com/forum/showthread.php?t=7135)

By Ryan Singel October 11, 2007

Did the NSA's massive call records database program pre-date the terrorist attacks of 9/11?

That startling allegation is in court documents released this week which show that former Qwest CEO Joseph Nacchio -- the head of the only company known to have turned down the NSA's requests for Americans' phone records -- tried, unsuccessfully, to argue just that in his defense against insider trading charges.

Nacchio was sentenced to 6 years in prison in 2007 after being found guilty of illegally selling shares based on insider information that the company's fortunes were declining. Nacchio unsuccessfully attempted to defend himself by arguing that he actually expected Qwest's 2001 earnings to be higher because of secret NSA contracts, which, he contends, were denied by the NSA after he declined in a February 27, 2001 meeting to give the NSA customer calling records, court documents released this week show.

AT&T, Verizon and Bellsouth all agreed to turn over call records to an NSA database, according to reporting in the USA Today in 2006. At that time, Nacchio's lawyer publicly stated that Nacchio declined to participate until served with a proper legal order.

The government has never confirmed or denied the existence of the program, but is trying to win legal immunity for telecoms being sued for their alleged participation in the call records program and the government's warrantless wiretapping of Americans. Turning over customer records to anyone, including the government, without proper legal orders violates federal privacy laws.

Nacchio's attempt to depose witnesses and present the classified defense was declined by Colorado federal district court judge Edward Nottingham, a decision that is playing a role in Nacchio's pending appeal to the 10th Circuit Appeals court.

The allegation is peppered throughout the highly redacted documents released by the lower court today, but are most clear in the introduction to this filing (.pdf (http://blog.wired.com/27bstroke6/files/512.pdf)) from April 2007.

Defendant Joseph P. Nacchio ... respectfully renews his objection to the Court's rulings excluding testimony surrounding his February 27, 2001 meeting at Ft. Meade with representatives from the National Security Agency (NSA) as violative of his constitutional right to mount a defense. Although Mr. Nacchio is allowed to tell the jury that he and James Payne went into that meeting expecting to talk about the "Groundbreaker" project and came out of the meeting with optimism about the prospect for 2001 revenue from NSA, the Court has prohibited Mr. Nacchio from eliciting testimony regarding what also occurred at that meeting. [REDACTED] The Court has also refused to allow Mr. Nacchio to demonstrate that the agency retaliated for this refusal by denying the Groundbreaker and perhaps other work to Qwest.

By being prevented from telling his full story to the jury or from fully and properly cross-examining any rebuttal witnesses, Mr. Nacchio has been deprived of the ability to explaoin why - after he came out of the February meeting with a reasonable, good faith, expectation that Qwest would be receiving significant contracts from NSA in 2001 ... Qwest was denied significant work.

[ed note. James Payne, Qwest's government liason who was also at February 27, 2001 meeting, later spoke with government agents in 2006].

In the interview, Mr. Payne confirmed that, at the February 27, 2001 meeting, "[t]here was some discussion about [redacted]. Mr. Payne also stated: Subsequent to the meeting the customer came back and expressed disappointment at Qwest's decision. Payne realized at this time that "no" was not going to be enough fro them. Payne said they never actually said no and it went on for years. In meetings after meetings, they would bring it up. At one point, he suggested they just them, "no." Nacchio said it was a legal issue and that they could not do something their general counsel told them not to do. ... Nacchio projected that he might do it if they could find a way to do it legally.

There was a feeling also, that the NSA acted as agents for other government agencies and if Qwest frustrated the NSA, they would also frustrate other agencies.

The Groundbreaker contract, reportedly worth $2 - $5 billion dollars, outsources the NSA's IT management, but at least one lawsuit charges the project was cover for a domestic spying program.

Notably, after the USA Today story ran , Nacchio's lawyer Herbert Stern, who argued his case before trial, released this statement:

In light of pending litigation, I have been reluctant to issue any public statements. However, because of apparent confusion concerning Joe Nacchio and his role in refusing to make private telephone records of Qwest customers available to the NSA immediately following the Patriot Act, and in order to negate misguided attempts to relate Mr. Nacchio's conduct to present litigation, the following are the facts.

In the Fall of 2001, at a time when there was no investigation of Qwest or Mr. Nacchio by the Department of Justice or the Securities and Exchange Commission, and while Mr. Nacchio was Chairman and CEO of Qwest and was serving pursuant to the President's appointment as the Chairman of the National Security Telecommunications Advisory Committee, Qwest was approached to permit the Government access to the private telephone records of Qwest customers.

Mr. Nacchio made inquiry as to whether a warrant or other legal process had been secured in support of that request. When he learned that no such authority had been granted and that there was a disinclination on the part of the authorities to use any legal process, including the Special Court which had been established to handle such matters, Mr. Nacchio concluded that these requests violated the privacy requirements of the Telecommunications Act.

Accordingly, Mr. Nacchio issued instructions to refuse to comply with these requests. These requests continued throughout Mr. Nacchio's tenure and until his departure in June of 2002.

Note that Stern says a request was made in the Fall of 2001. Stern does not say "first approached" in the statement, though that clearly seems to be the implication. But it's not what the four corners of Stern's statement says. And finally, the redactions in the documents make it impossible to say what the February 21, 2001 requests from the NSA were. It could have been a request from NSA to do some other eavesdropping thing that Nacchio felt uncomfortable with, but I'm very doubtful.

10-13-2007, 10:17 AM
Feds may have sought surveillance before 9/11


By Ellen Nakashima and Dan Eggen

WASHINGTON — Former Qwest Communications International Chief Executive Joseph Nacchio said the National Security Agency (NSA) approached Qwest more than six months before the Sept. 11 attacks about an unidentified NSA program, according to court documents unsealed this week.

Nacchio, who is appealing a conviction for insider trading, also said the government withdrew a $200 million contract after Qwest refused to participate in an NSA program the company's top lawyer said was illegal.

Details about the alleged NSA program have been removed from the documents, but Nacchio's lawyer said last year that the NSA had approached the company about participating in a warrantless-surveillance program to gather information about Americans' phone records.

In the court filings disclosed as part of his appeal this week in Denver, Nacchio — convicted in April of 19 counts of insider trading — suggests Qwest's refusal to take part in the NSA program led the government to cancel the $200 million contract in retribution.

He is using the allegation to try to show why his stock sale should not have been considered improper.

Nacchio was convicted of selling shares of Qwest stock in early 2001, just before financial problems caused the company's share price to tumble.

He has claimed in court papers that he had been optimistic Qwest would overcome weak sales because of the expected top-secret contract with the government.

Nacchio said he was forbidden to mention the specifics during the trial because of secrecy restrictions, but the judge ruled the issue was irrelevant to the charges against him.

Nacchio's account, which places the NSA proposal at a meeting on Feb. 27, 2001, suggests the Bush administration was seeking to enlist telecommunications firms in programs without court oversight before the terrorist attacks on New York and the Pentagon.

The Sept. 11 attacks have been cited by the government as the main impetus for its warrantless-surveillance efforts.

The allegations could affect the debate on Capitol Hill over whether Qwest and other telecoms should be given immunity for disclosing customers' phone records to the government after the Sept. 11 attacks, even if they did not have court authorization for doing so.

Spokesmen for the Justice Department, the NSA, the White House and the director of national intelligence declined to comment.

Federal filings in the appeal have not been disclosed.

In May 2006, USA Today reported that the NSA had been secretly collecting the phone-call records of tens of millions of Americans, using data provided by major telecommunications firms.

Qwest, it reported, declined to participate because of fears the program lacked legal standing.

In a statement released after the story was published, Nacchio attorney Herbert Stern said that in fall 2001, Qwest was approached to give the government access to the private phone records of Qwest customers.

Stern could not be reached for comment Friday.

A lawyer for Nacchio, Jeffrey Speiser, declined to comment on whether the call-records program was the program discussed at the February 2001 meeting.

10-13-2007, 10:18 AM
Court documents reveal former Qwest CEO Nacchio's defence


1 day ago

DENVER - Former Qwest chief executive Joe Nacchio planned to argue during his insider trading trial that Qwest lost government contracts as a result of refusing a government request, court documents show.

Details of the government's request were redacted in the documents released Wednesday. But last year, Nacchio's lawyer Herbert Stern said the government asked for access to Qwest customers' phone records in 2001, with neither a warrant nor approval from a special court established to handle surveillance matters. While AT&T Corp., Verizon Communications Inc. and BellSouth Corp. complied, Qwest refused after deciding the request violated privacy law, Stern has said.

In July 2001, the National Security Agency named other companies as recipients of a contract that Nacchio believed Qwest would get, the court documents said.

Nacchio was convicted last spring on 19 counts of insider trading. He was accused of selling $52 million in stock in 2001 based on nonpublic information that Qwest Communications International Inc. was having trouble meeting its financial targets.

Nacchio's lawyers contended he had classified information that led him to believe Qwest would win lucrative government contracts that would have bolstered Qwest's revenue. However, that argument was not mentioned at trial.

Court documents released Wednesday show Nacchio's lawyers had wanted to present those arguments, but alongside his refusal of the government request.

U.S. District Judge Edward Nottingham would not allow Nacchio to present an argument on retaliation.

Nacchio's lawyers argued in the court documents that Nacchio couldn't fully explain what happened with the government contracts without presenting the retaliation argument.

The 10th U.S. Circuit Court of Appeals is scheduled to hear Nacchio's appeal Dec. 18.

Nacchio is free pending his appeal.

10-13-2007, 10:19 AM
Ex-Qwest Chief Asks for New Trial


Published: October 11, 2007

Joseph P. Nacchio, the convicted former chief executive of Qwest Communications International, asked a federal appeals court for a new trial, claiming he had been found guilty of insider trading based on insufficient evidence.

In April jurors convicted Mr. Nacchio, 58, of selling $52 million in shares of Qwest, based on private warnings that the telephone company would miss revenue targets in 2001.

Mr. Nacchio, who was sentenced to six years in prison, claimed prosecutors had failed to prove he had important information, or that he knew Qwest’s stock would collapse.

“There is insufficient evidence that Nacchio knew he had any material information that had to be disclosed prior to trading,” Mr. Nacchio’s lawyers wrote in a motion filed Tuesday. “All of the direct evidence (including his own trading decisions) shows that Nacchio was bullish and believed Qwest stock was undervalued.”

The federal appeals court in Denver, where Qwest is based, has allowed Mr. Nacchio to remain free on $2 million bail and will hear his lawyers’ oral arguments Dec. 18.

10-13-2007, 04:21 PM
Qwest CEO's 'classified defense' raises question on NSA surveillance

http://rawstory.com/news/2007/Qwest_CEOs_classified_defense_raises_question_1012 .html

Nick Juliano
Published: Friday October 12, 2007

A former CEO who stood up to the Bush administration's demands that he assist in the warrantless surveillance of Americans suggests in court documents that the National Security Agency withdrew a lucrative contract in retaliation for his refusal.

Documents released as part of Qwest CEO Joe Nacchio's insider trading trail also seem to indicate that the NSA was discussing the secretive, possibly illegal, surveillance of Americans several months before the 9/11 attacks President Bush used to justify the program.

The heavily redacted legal filings reveal the "classified defense" Nacchio was unable to present during his trial, and they outline a Feb. 27, 2001, meeting between the Qwest CEO and NSA officials to discuss a $100 million infrastructure project, and another topic. Discussion of the second topic was blacked-out in released court documents, but observers believe the NSA could've been discussing its program to compile a database of tens of millions of Americans' phone records.

According to one of the documents, Nacchio traveled to NSA headquarters in Ft. Meade, Md., to discuss the agency's "Groundbreaker" project, which the NSA said was aimed at modernizing its technology infrastructure.

Another lawsuit against AT&T alleging its cooperation in the domestic call monitoring has linked the Groundbreaker program to a secret surveillance equipment a former AT&T employee said the NSA installed in the company's headquarters.

In the Qwest documents, Nacchio's lawyer says the company "was denied significant work," including the "Groundbreaker" contract after the CEO objected to another topic discussed in that February, 2001, meeting.

Nacchio and an associate "went into that meeting expecting to talk about the 'Groundbreaker' project and came out of the meeting with optimism about the prospect for 2001 revenues from NSA," attorney Herbert J. Stern, in Nacchio's latest appeal to include the evidence.

"[T]he Court has prohibited Mr. Nacchio from eliciting testimony regarding what also occurred at that meeting, [redacted]," Stern writes. "The Court has also refused to allow Mr. Nacchio to demonstrate that the agency retaliated for this refusal by denying the Groundbreaker and perhaps other work to Qwest."

Nacchio is appealing his conviction on 19 accounts of insider trading for $52 million of stock sales in April and May 2001. He was sentenced last spring to six years in prison, but he is free pending appeal. Prosecutors argued that the CEO did not warn investors before he sold his stock that Qwest was unlikely to meet its revenue goals, but his defense team argued that he acted in good faith with investors because he expected that the secret contracts would come through.

Although the redacted documents do not say what the program was, several mentions are made to Nacchio's belief that the NSA's proposal was inappropriate and illegal, the Rocky Mountain News reports. Prosecutors said the classified defense "would have been proven false," according to the paper.

USA Today revealed last year that Qwest was the only phone company not to comply with the NSA's request to compile phone records into a massive computer database, which it said was instituted only after 9/11.

Stern said at the time that Nacchio had asked the NSA whether "a warrant or other legal process had been secured." Stern said Nacchio learned there was a "disinclination on the part of the authorities to use any legal process" and concluded that "the requests violated the privacy requirements of the Telecommunications Act."

10-16-2007, 07:29 PM
Top Spy Asked to Explain Pre-9/11 Spying Allegations


By Ryan Singel
October 15, 2007

House Judiciary Chairman John Conyers is asking the Justice Department and the head of national intelligence to answer startling allegations that the National Security Agency's still-unconfirmed call records data mining program started 7 months before the terrorist attacks of 9/11 and that the government retaliated against a telecom for saying it thought a request to participate was illegal.

As first reported here on THREAT LEVEL and then followed up on (sans credit) by the Washington Post and the New York Times, court documents unveiled last week show that former Qwest CEO Joseph Nacchio tried, unsuccessfully, to raise allegations in court that he refused an NSA request for help from his telecom in February 27, 2001, nearly 7 months prior to 9/11.

Though the specific program is redacted in the documents, Nacchio's lawyer confirmed in 2006 that Qwest had repeatedly turned down requests from the NSA for its customer call records. AT&T and MCI (now owned by Verizon) complied with the request, according to the USA Today.

Nacchio was seeking to argue that he expected in 2001 to win secret NSA contracts, but didn't because the NSA retaliated for his refusal.

Nacchio was convicted in June of making millions by selling shares of Qwest stock, knowing the company wouldn't make its publicly announced revenue targets. Nacchio wanted to argue in court that he expected the company would be getting classified contracts, which would have made the company make the public projections. Nacchio, sentenced to six years in prison, is free pending appeal.

Conyers wrote (.pdf) Monday to Assistant Attorney General Ken Wainstein and Director of National Intelligence Michael McConnell about these "disturbing revelations," referring to both the pre-9/11 date and the alleged retaliation.

It is crucial, however, that Congress be fully informed of all the Administration’s surveillance activities involving telecommunications companies, particularly in light of the Administration’s request that retroactive immunity from liability be provided to these companies and Administration officials. Accordingly, I ask that you provide the Committee with an immediate briefing on the facts behind these recent revelations, and that you then provide us with any documents concerning the nature and scope of these pre-9/11 activities and the legal basis for conducting them.

10-17-2007, 06:33 PM
"It's the kind of capability if we'd had before 9/11 might have led us to be able to prevent 9/11." - Dick Cheney (http://www.yourbbsucks.com/forum/showthread.php?t=7135)


10-17-2007, 06:34 PM