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Qwest Punished by NSA for Non-Cooperation
nightcats writes "According to a story from the Rocky Mountain news, Qwest has received retaliatory action from the NSA for refusing to cooperate in the Bush administration's domestic data-mining activity (i.e., spying on Americans). 'The [just-released government] documents indicate that likely would have been at the heart of former CEO Joe Nacchio's so-called "classified information" defense at his insider trading trial, had he been allowed to present it. The secret contracts - worth hundreds of millions of dollars - made Nacchio optimistic about Qwest's future, even as his staff was warning him the company might not make its numbers, Nacchio's defense attorneys have maintained. But Nacchio didn't present that argument at trial. '"
I admit the summary is inflammatory, but strip away the hyperbole and the implication is there.
/., so I guess that doesn't matter here.
Nacchio is claiming that he expected to receive classified government contracts that would have prevented the revenue shortfall, and that therefore he was not guilty of insider trading because he believed the revenue forecasts to be accurate.
Nacchio is clearly not a disinterested party to this, so his assertions have to be examined carefully, but it is at least plausible that after Qwest declined to give the NSA access to their network, NSA decided to give the contract to someone else in retaliation.
I haven't followed the story closely enough to pretend to have an informed opinion on the merits of the argument. Of course, this is
If you RTFA, the implications are there. Play ball with the NSA, and life could go better with you. Cross-connect your new fiber infrastructure with the NSA and get nice secret benefits. Don't do it, and watch yourself go down, hard, at the hands of the non-secret branches of government.
Good conspiracy stuff. Kennebunkport and B-52s, anyone?
---- Teach Peace. It's Cheaper Than War.
Did you bother reading the PDF court filings which are listed on the article page?
It appears that (if Nacchio was telling the truth) the NSA offered projects worth a significant amount of money to Qwest -- then, when Nacchio refused a separate NSA request on the grounds that the request was illegal, the NSA withdrew the other projects.
If this isn't punishing Qwest for non-cooperation, what is?
Please don't read or comment on articles in which you have no interest.
Either I'm out of touch, or this is a tad bit of a smoking gun...
Next up for me is trying to determine when the guys who went along got their start. Either way it doesn't look good.
Interesting stuff.
Nacchio is clearly not a disinterested party to this, so his assertions have to be examined carefully, but it is at least plausible that after Qwest declined to give the NSA access to their network, NSA decided to give the contract to someone else in retaliation.
This was my interpretation as well. Basically, the government was using lucrative contracts as an incentive for cooperation with various other less palatable projects. When Qwest declined to cooperate with those, the government pulled their other contracts and gave them to someone else who was presumably more willing to cooperate. Given this, I think a case could be made for the mis-estimation of future income by Qwest. Depending on where they were in negotiations, etc, it's reasonable to assume that there was grounds for considering these contracts as valid future revenue.
began on 2001-09-11?
If you do some research, you will see that a lot of these programs had been ramped up considerably under Clinton (including both extraordinary rendition, and the attacks on free speech). There was also an increasing amount of information that Eschelon was underway at that time. Unfortunately this is not a matter of who is in office, but rather who is informing whoever is in office.
This means: career military top brass, it means career intelligence services (CIA, NSA, etc), and to a lesser extent it means private think tanks.
LedgerSMB: Open source Accounting/ERP
It is a fact that he had meetings discussing contracts with the NSA, the details are redacted but the meeting is there. The fact that the judge won't allow the redacted information in the trial is somewhat disturbing as they prove he didn't have intent to defraud investors. Along the same line, the nature of such contracts means that investor notification may not be entirely possible or even legal. If he said he would probably make numbers dependent on pending government work he should be in the clear. Numbers are just that, numbers, they have risk.. greater when working for secret agencies as Quest is an order of magnitude smaller than Verizon or AT&T.
but that retaliation messed up his numbers while he was telling investors big deals were almost done... oops now it went south, the check wasn't in the mail... and he can't talk about it because it's secret. Now he's charged with a crime for not talking about it when the stock did poorly without those contracts. One could almost argue that the prosecutor had cherry picked that time frame knowing he couldn't use the facts to defend himself.