washington -- A former Qwest Communications International executive, appealing a conviction for insider trading, has alleged that the government withdrew a $200-million contract after Qwest refused to participate in an unidentified National Security Agency program that the company’s top lawyer said was illegal.
Former Chief Executive Joseph Nacchio, convicted in April of 19 counts of insider trading, said the NSA approached Qwest more than six months before the Sept. 11, 2001, attacks, according to court documents unsealed in Denver this week.
Details about the alleged NSA program have been redacted from the documents, but Nacchio’s lawyer said last year that the NSA had approached the company about participating in a warrantless surveillance program to gather information about Americans’ phone records.
In the court filings disclosed this week, Nacchio suggests that Qwest’s refusal to take part in that program led the government to retaliate by canceling a separate, lucrative contract with the NSA. He is using the allegation to try to show why his stock sale should not have been considered improper.
Nacchio was convicted for selling shares of Qwest stock in early 2001, just before financial problems caused the company’s share price to tumble. He has claimed in court papers that he had been optimistic that Qwest would overcome weak sales because of the expected top-secret contract with the government. Nacchio said he was forbidden to mention the specifics during the trial because of secrecy restrictions, but the judge ruled that the issue was irrelevant to the charges against him.
Nacchio’s account, which places the NSA proposal at a meeting on Feb. 27, 2001, suggests that the Bush administration was seeking to enlist telecommunications firms in programs without court oversight before the terrorist attacks. The Sept. 11 attacks have been cited by the government as the main impetus for its warrantless surveillance efforts.
The allegations could affect the debate on Capitol Hill over whether Qwest and other firms should be given legal immunity for disclosing customers’ phone records to the government after the Sept. 11 attacks without court authorization.
In May 2006, USA Today reported that the NSA had been secretly collecting the phone-call records of tens of millions of Americans, using data provided by telecommunications firms.