Joseph Nacchio, the CEO of Qwest Communications International Inc. from 1997 to 2002, arrives at the Denver Federal Courthouse with his wife, Anne, for sentencing on 19 counts of illegal stock sales in Denver, Colorado July 27, 2007.
Former Qwest CEO Joseph Nacchio is currently serving a six-year sentence after being convicted of insider trading in April 2007 for selling $52 million of stock in the spring of 2001 as the telecommunications carrier appeared to be deteriorating.
During the trial his defense team argued that Nacchio, 63, believed Qwest was about to win secret government contracts that would keep it in the black.
Nacchio alleged that the government stopped offering the company lucrative contracts after Qwest refused to cooperate with a National Security Agency surveillance program in February 2001.
That claim gains new relevance these days, amid leaks by whistleblower Edward Snowden that allege widespread domestic surveillance by the NSA.
Back in 2006 Leslie Cauley of USA Today, citing multiple people with direct knowledge of the arrangement, reported that shortly after the Sept. 11 terrorist attacks America's three largest telecoms signed contracts to provide the NSA with detailed call records from hundreds of millions of people across the country.
Cauley noted that Qwest's refusal to participate "left the NSA with a hole in its database" since the company served local phone service to 14 million customers in 14 states.
From USA Today (emphasis ours):
The NSA, which needed Qwest's participation to completely cover the country, pushed back hard. ...
... the agency suggested that Qwest's foot-dragging might affect its ability to get future classified work with the government.
Cauley, citing sources familiar with events, reported the NSA asserted that Qwest didn't need a court order — or approval under Foreign Intelligence Surveillance Act (which oversees NSA snooping) — to provide the data.
"They told (Qwest) they didn't want to [run the proposal by the FISA court] because FISA might not agree with them," one NSA insider told USA Today.
There is a record of the NSA running afoul of FISA: In July the FISA court ruled that the NSA violated the Fourth Amendment's restriction against unreasonable searches and seizures "on at least one occasion."
Furthermore, Nacchio felt that it was unclear who would have access to Qwest customers' information and how that information might be used. Sources told Cauley that the NSA said government agencies including the FBI, CIA, and DEA might have access to its massive database.
Nacchio entered prison on April 14, 2009 and is scheduled for release on September 21, 2013 (F ederal inmates are typically required to serve at least 80 percent of a sentence, which would be 3.5 years in this case.)
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