Former Qwest CEO Joseph Nacchio: Tales From a White-Collar Prison Sentence By DIONNE SEARCEY Wall Street Journal September 27 2013
LIVINGSTON, N.J.—Former telecommunications company chief executive Joseph Nacchio entered prison in 2009 out of shape, depressed and anxious. Fifty-four months later, Mr. Nacchio, 64 years old, who once ran Qwest Communications International Inc., has emerged physically unrecognizable from his pre-incarceration life. Prison appears to have shaved years off his looks. He has broad shoulders from a daily regimen of lifting weights and 5-mile walks and runs. He has a goatee and his head, formerly covered with black hair, is completely shaved and tan. He says his blood pressure and cholesterol are lower than when he entered prison and his body fat has dropped dramatically. He thinks he looks like actor Edward Norton on his federal Bureau of Prisons identification card. Prison also offered the CEO, who once was surrounded by highflying telecom executives before his prosecution for insider trading in 2007, a new set of peers: drug offenders Spoonie and Juice, and a bunkmate named Spider. "I trust Spoonie and Juice with my back. I wouldn't trust the guys who worked for me at Qwest," said Mr. Nacchio, in his first interview since he was fully released from custody Sept. 20. Mr. Nacchio is among the first white-collar executives to be set free after a decade of aggressive crackdowns by federal investigators to rein in shenanigans at public companies. He remains as combative as ever, insisting he never committed a crime, while describing his experience in prison as something akin to "Lord of the Flies, for grown-ups." A jury convicted Mr. Nacchio of selling $52 million of stock as Qwest's outlook was deteriorating when the telecom boom of the early 2000s was imploding. He paid a $19 million fine and after an appeal forfeited $44.6 million, though he says he is still well-off financially, and still owns several residences. Mr. Nacchio spent most of his sentence in two Pennsylvania facilities called camps, the lowest level of security offered by the Bureau of Prisons. There are no bars and no walls around the perimeter. Camp inmates can send emails. But they are awakened in the night for security checks. Phone calls are limited to about 10 minutes a day. Visitors are allowed but only every other weekend and some holidays. Prison experts and former inmates say conditions are less comfortable for white-collar criminals than they were in the 1980s, when media stories about leafy prison camps with sparkling athletic facilities surfaced during the savings-and-loan crisis. They say authorities took down tennis nets in at least one camp and cut off inmate access to golf courses and swimming pools. A Bureau of Prisons spokesman said federal camps do not have pools and said the agency doesn't keep records of past amenities. "There is no such thing as a Club Fed," said prison consultant Alan Ellis, who advises white-collar convicts about life in prison. Mr. Nacchio's fellow inmates included former Galleon Group trader Zvi Goffer and his brother Emanuel Goffer, both serving time for an insider-trading scheme. Mr. Nacchio got to know both of them. But the two prison camps where Mr. Nacchio served, named Schuylkill and Lewisburg, were in large part populated with drug offenders, Mr. Nacchio said—men with muscular builds, covered in tattoos, and often two decades younger than him. Two of them became his guardian angels. "Joe was right down to earth," said Spoonie, who asked that his real name not be used because of the stigma his drug-conspiracy conviction carries. Spoonie, 45, said other white-collar offenders were "just all full of themselves," and stereotyped inmates such as himself and Juice, another drug offender, because of their tattoos and crimes. "We are like best friends now," he said, adding that Mr. Nacchio's prison nickname was "Joe-ski-luv," because he's been married to the same woman for more than 30 years. "If he ever needs a lung or a bone, I'm there." Some former Qwest employees and shareholders remain unmoved. Mr. Nacchio made lots of enemies at Qwest when it took over regional telecom company U.S. West, a tension-fueled process that made him reviled among workers, some of whose retirement accounts were drained during his tenure and when Qwest's stock took a dive. "There is no sympathy and there will never be forgiveness for Joe Nacchio," said Kathleen Kennedy, who as president of the Telephone Retirees Association of Arizona represented phone company retirees during Mr. Nacchio's time as CEO. Ms. Kennedy said she has been approached at retiree meetings by people who told her that when Mr. Nacchio is released "there's going to be a hit out on him." "I don't think these retirees would do it, but that's how strongly they felt," she said. Mr. Nacchio fought his conviction to the U.S. Supreme Court, which refused to hear his case. He has a lawsuit pending in New Jersey Superior Court against his criminal defense lawyers accusing them of malpractice and overbilling. An employee at the law office of his main trial lawyer, Herbert Stern, said Mr. Stern declined to comment. He is also seeking a nearly $18 million tax refund, saying his forfeiture of $44.6 million is tax deductible. A Justice Department official declined to comment. Mr. Nacchio said he still believes his insider-trading prosecution was government retaliation for rebuffing requests in 2001 from the National Security Agency to access his customers' phone records. His plans to use that belief as a defense at trial never materialized; some of the evidence he wanted to use was deemed classified and barred from being introduced. To Mr. Nacchio, the revelations of former NSA contractor Edward Snowden, who leaked documents saying the agency monitors the email and phone records of Americans, have justified his own stance. He contended the NSA's request was illegal. "I feel vindicated," he said. "I never broke the law, and I never will." An NSA spokeswoman declined to comment. Sitting at a conference table last week at the Robert D. Borteck, P.C. law firm in Livingston, N.J., where he was on work release, Messrs. Nacchio and Borteck recalled the day Mr. Nacchio had three longtime friends drop him in Minersville, Pa., to begin his term four years ago. He said he thought a prison-gate goodbye would be too hard on his wife. He'd made a mix CD of rock n' roll songs for the three-hour trip, timing it perfectly when crossing the threshold of the Schuylkill facility with the lyric from the Eagles "Hotel California"—"you can check out anytime you like, but you can never leave." He belted out the lyric as prison officers approached his car, he recalled. At the Schuylkill camp, Mr. Nacchio's job was doing laundry for six cents an hour. Eventually he worked his way up to a tailoring job, hemming pants and making belts for 12 cents an hour. As a well-compensated CEO, Mr. Nacchio never carried cash in his wallet. In federal prison, where inmates are required to deposit earnings in prison accounts, his currency was fish: packages of mackerel and tuna purchased from the commissary. Mr. Nacchio paid a fellow inmate one package of tuna to collect his mail. Having another inmate clean his tiny cubicle cost him three packages of "mack." Mr. Nacchio and his prison mates found humor in their situation. They liked to play practical jokes on the "newbies"—white-collar offenders new to prison camp. Mr. Nacchio would sit quietly beside them the first time they entered the TV room. Spoonie and another inmate would burst in and pretend to jump Mr. Nacchio, wailing on him with fake kicks and punches as he begged them to stop. In March Mr. Nacchio began a five-week stint in a halfway house and then began home confinement in New Jersey. He was permitted one shopping trip every three weeks but had to check in with Bureau of Prisons officials from a landline because he was barred from using mobile phones. On trips to the Mall at Short Hills in New Jersey, he said he flashed his Bureau of Prisons identification card to employees, telling them he needed to use the phone. "I can't wait for the first person to come up to me and say something to me" about the conviction, he said. "I'm going to look them in the eye and say, 'You must be confusing me with someone who gives a f— about your opinion.' " Until last week, Mr. Nacchio spent most of the day in a temporary office set up for him as part of his work release at Mr. Borteck's firm. Mr. Nacchio, who spent his career at telecom companies, was stymied by one device: the telephone. "I still don't know how to put a call on hold. It's amazing what you forget in prison." Mr. Nacchio has no firm plans for the future. He said he has had overtures from private-equity firms to be an adviser or consultant. For now, he's focusing on shopping two books to publishers. One will be about what he says is Americans' loss of liberty based on his experiences with the NSA and other government agencies. Another will be based on his incarceration and is "a little bit like Woody Allen and Mel Brooks go to prison." _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
