View Full Version : Qwest CEO Gets New Trial, But Not For Pre-9/11 Domestic Spying Claims

03-17-2008, 10:04 PM
Qwest CEO Gets New Trial, But Not For Pre-9/11 Domestic Spying Claims


By Ryan Singel
March 17, 2008

A federal appeals court overturned the conviction of former Qwest CEO Joseph Nacchio for alleged insider trading in 2001, finding that the district court judge improperly disallowed expert testimony from an economist. Nacchio was accused of making millions selling shares when he knew that the high-flying Qwest would not make its numbers in 2001.

Nacchio was convicted of 19 counts of insider trading in April 2007. He was sentenced to 6 years in federal prison and fined $19 million, but has been free pending appeal. (Wired.com's Epicenter covers the details (http://blog.wired.com/business/2008/03/former-qwest-ce.html) on the business back story).

The Tenth U.S. Circuit Appeals Court ruled 2-1 Monday that though the judge erred in excluding a key expert witness, the government had made enough of a case to retry Nacchio, which is almost certain to happen.

Nacchio was also seeking to overturn the conviction based on the fact the judge wouldn't let him used classified documents Nacchio says proves the NSA asked Qwest to help with illegal spying in February 2001, months before the 9/11 attacks. Because he asked for a court order the spooks didn't want to get, the NSA punished him by giving the secret contracts to other telecoms.

That astounding allegation (http://blog.wired.com/27bstroke6/2007/10/nsa-asked-for-p.html#previouspost) was made public in October when the court unsealed some of the case documents.

The appeals court was not persuaded in its Nacchio opinion (http://www.ck10.uscourts.gov/opinions/07/07-1311) (.pdf), writing:

He claims that the evidence would have shown that he personally had reason to believe that Qwest’s economic prospects were much better than others realized. Thus, he says, this evidence should have been permitted both to show that he did not have material information and to negate scienter. We affirm the district court's decision, because even if the classified information were presented and established what he said it would, it could not exonerate Mr. Nacchio as he claims.
However, if the feds prosecute Nacchio again -- as they almost certainly will -- they have to so in front of a new judge.

And though THREAT LEVEL owns no law degrees, that sounds like it means there's yet another judge who has the chance to rule on the secrecy claims. Nacchio's lawyers could be simply trying to get Nacchio off the hook by scaring prosecutors with the spectre of spilled, classified information (a tactic known as greymail.)

But what if those documents actually show that the NSA launched its domestic data-mining and/or eavesdropping program before 9/11 and that the spooks punished Qwest for believing in court orders?

Doesn't that change everything?

Don't AT&T and Verizon and Sprint get new legal defenses in the anti-spying cases against them?

"We weren't really patriots, just smart management protecting our revenue stream on behalf of the shareholders."