Former Telecom Chief's New Job: 40 Cents an Hour
Joseph Nacchio, the former head of Qwest Communications and the last of the big telecom chiefs convicted of wrongdoing during the 1990s bubble, reported today to federal prison in Pennsylvania.
Nacchio was found guilty of insider trading for selling more than $50 million of his stock in Qwest in 2001 after being told by insiders that the company would not meet its earnings targets. For more than a year he has been fighting his conviction and his six-year sentence -- but was finally ordered by a judge to report to the prison today, The Denver Post reports.
Nacchio has maintained his innocence, arguing argued that his case was unfairly hampered because testimony about the National Security Agency was excluded from his jury trial. In court papers he claimed that he had been optimistic that Qwest would overcome weak sales in 2001 because of a top-secret contract with the government, which he contended was canceled after he refused to cooperate with the NSA's warrantless wiretapping program. The trial judge ruled that the issue was irrelevant to the case.
So this morning, the 59-year-old son of a longshoreman arrived at the minimum-security prison camp at Schuylkill Federal Correctional Institution in Minersville, Pennsylvania. He will live in a two-person dorm-like cell and will be assigned a job such as cleaning bathrooms for a top rate of 40 cents an hour.
Nacchio's case is a vestige of the technology boom that is a dim memory in the current financial crisis. Qwest was a product of both new technology and the breakup of the old telephone monopolies. It was put together by reclusive Denver billionaire Philip Anschutz, who had taken over the Southern Pacific railroad in the 1980s. Anschutz realized that the huge right-of-ways the rail companies owned alongside their tracks could be the conduits of a new national telecommunications network of high-speed fiber optic cable.
Anschutz recruited Nacchio from AT&T in 1997 and he orchestrated the takeover of phone giant US West in 2000. Nacchio once preached to the rest of the company about the importance of ethics. He became fabulously wealthy, but within two years the telecom bubble burst and Qwest was caught up in an accounting scandal.
Nacchio soon became the subject of civil lawsuits. He was criminally indicted in December of 2005.
By The Editors |
April 14, 2009; 1:16 PM ET
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