this past summer, when jeralyn
merrit at talkleft.com was writing on
the nacchio appeals developments & pro-
cess, i was regularly chilled by how
much the teleco industry had to GAIN
by selling all of us out — by handing
over our contitutional right to privacy.
this is a right every innocent citizen
once enjoyed — privacy in our electronic
papers, virtual-travels and communiques. . .

if they play paddy-cake with the govt.,
they garner literally billions of high-
margin revenue. and perhaps, just perhaps,
we never find out. forget nacchio — he’s
likely deserving of jail time for his trades,
but remember the lesson: this administration
punishes those who question it — and this
administration rewards those who play along.

think here of blackwater, first kuwaiti, KBR — and,
the mother of all “players-along” — halliburton.

i need to go lie down now.

this really, really saddens me.
we are sold out by our own infra-
structure constructors. . .

p e a c e

“. . .tell me how Nacchio’s “retaliation” argument can ever really undermine the Government’s basic case on Naccio’s cleaning out the company’s till?”

good question, maddog –

my answer may well go astray of the
topic for this thread, so if you
don’t care about the merits of
the case, bail out now. just
scroll on by. . .

still here? okay:

this case, in the tenth circuit, will
likely clarify a fair amount of the
insider-trading jurisprudence.

[n.b.: by repeating these claims, i do
not mean to suggest that i buy them.]

nacchio claims he was the first person
ever convicted of being wrong about his
own company’s “soft information” — his
company’s predictions about future growth.

his claim amounts to this: my predictions
were “reasonable when made” (and those are
magic words in the SEC’s rules), because i
truly reasonably believed that my company,
qwest, would win a very large govt. contract.
qwest’s predictions — he says — assumed that
the govt. would not “punish him” for honoring, and
obeying, the constitutional law (as developed
in the AT&T cases of the 1970s). . .

that is — he asked that the govt. show
probable cause, or get a warrant, to have
access to all the data he was being asked
help drive — actually build a superhighway
to — but the govt. not only declined that
request (he sez); they “punished” him for
having the simple temerity to ask.

and, how did the govt. do this? it cancelled
some very large contracts.

remember, however, at least based on all
that i’ve read on this case, nacchio actually
liquidated some of his investment in qwest
at some pretty high prices, after he knew
that — for whatever reason — the govt.
would not come through with the contract(s).

and he did not disclose the change in
the admittedly “soft” information — to
the investing public — before he sold.

then qwest shares tanked, it missed
wall street’s and its internal expectations,
and mr. nacchio ended up being indicted
for among other things, insider trading.

[a funny side note: while at my office one
day, during negotiations with the SEC to
get a large public offering declared effective
for a client, i received — in error — and by
overnight courier, no less, SIX large containers of
nachhio’s banker’s documents from the sec’y
of one of the lawyers representing nacchio
at the SEC — his firm was ALSO representing the
underwriters on my deal, and their wires got
crossed — so i got the nacchio documents, and
the SEC got my final diligence back-up materials.

anyway, i read NONE of it, re-sealed it all,
and sent it back to the law-firm — from there,
i assume the firm sent it on to the SEC. odd.]

so — is it “odd” that the govt. now wants
prison time for “soft” information gone bad?

or is nacchio trying to avoid the natural con-
sequences of preferring himself over the rest
of the public shareholders? you can decide.

or the tenth circuit will.

p e a c e

And for our legal eagles here, tell me how Nacchio’s “retaliation” argument can ever really undermine the Government’s basic case on Naccio’s cleaning out the company’s till?

Two thoughts about talks with CEOs. I think they content of them is actually not as substantive as it is with the tech guys. After all, the techguys need to prepare for Big Brother to open an office in your building. Whereas the talks with the CEOs probably pertains to the rationale for the whole thing.

That said, Nacchio was moved to be chair of the telecom advisory group. So I gotta believe they expected him to know a few things about the technical and policy side of things. That was my first thought when they said he misunderstood. If that’s the guy in charge (however briefly) of your telecom advisory group, what’s that say about the group?

One would also think (or at least hope!) that when “requests” get to the level we are talking about that there is fairly substantive discussion — and particularly enough that there would be no misunderstanding between the parties. The government would have to be fairly direct about what it wanted, or else Mr. Nacchio did not misunderstand anything.