Sunday, October 14, 2007
Qwest Communications Scandal in a Nutshell
In a nutshell, here's a breakdown and timeline of the Qwest Communications scandal.
According to former Qwest chief Joseph P. Nacchio, the National Security Agency asks him to illegally eavesdrop on Americans back in February 2001 --months ahead of the Sept. 11 terrorist attacks.
Administrations officials discuss with Nacchio a no-bid contract for a program called Groundbreaker and another undisclosed project, redacted in court documents. Qwest earlier "receives two classified contracts valued at hundreds of millions of dollars, without a competitive bidding process."
Qwest refuses to play ball and voila, government contracts vanish. The WaPo helps explain with a quote:
Administrations officials discuss with Nacchio a no-bid contract for a program called Groundbreaker and another undisclosed project, redacted in court documents. Qwest earlier "receives two classified contracts valued at hundreds of millions of dollars, without a competitive bidding process."
Qwest refuses to play ball and voila, government contracts vanish. The WaPo helps explain with a quote:
Kurt Opsahl, senior staff attorney for the Electronic Frontier Foundation, said: "It's inappropriate for the government to be awarding a contract conditioned upon an agreement to an illegal program. That truly is what's going on here."Qwest stocks start to drop in May and plunge as low as $2 by the following summer. Amidst rumors of insider trading, Nacchio is forced to resign as chief in June 2002; and nearly three years later, the U.S.
Securities and Exchange Commission indicts him and six former Qwest executives.
Interim U.S. attorney for Colorado, William Leone, initially leads the investigation but White House fails to permanently nominate him; he officially leaves office in October 2006.
The case is prosecuted by incoming U.S. Attorney Troy Eid and on April 19, 2007, a jury convicts Nacchio of 19 of 42 counts of insider trading. Nacchio is sentenced to six years in federal prison and ordered to pay a $19 million fine as well as relinquish $52 million gained from selling shares at $38.31 to $41.12.
Attorneys for Nacchio appeal the verdict, claiming stocks for Qwest fell after the government withdrew promised contracts in retaliation for the firm's refusal to eavesdrop on Americans without a warrant. Defense further argues Nacchio had no inside knowledge that Qwest stocks would plunge -- even as he was selling his personal shares -- because of his belief that undisclosed future government contracts would soon be forthcoming.
Eid is tangentially linked to Abramoff scandal on May 19, 2007.
Speculation of selective prosecution in Qwest case surfaces in August 2007 that is eerily clairvoyant.
Update: Truthdig reposts hair-raising article, "Inside the Data Mine."
// posted by Howling Latina @ 5:31 PM 
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