Other News Video |
More Qwest Executives Testify On Capitol Hill
Aschutz Accused Of Making Millions On Shady Deals
POSTED: 6:28 a.m. MDT October 1, 2002
UPDATED: 4:12 p.m. MDT October 1, 2002
DENVER -- More Qwest Communications executives will testify in front of a House subcommittee today as the panel investigates whether Qwest and Global Crossing cut bogus deals in the form of fiber-optic capacity swaps.
Former Qwest chief executive Joe Nacchio, chief operating officer Afshin Mohebbi, and Global Crossing chairman Gary Winnick testified before the Energy and Commerce committee today.
Nacchio is expected to be asked about the nearly $1 billion that Qwest wrote off the books a week or so ago.
And he was expected to say exactly what the executives from Global Crossing have been saying so far about the same deals -- that in spite of memos from the sales staff that these were junk deals intended to pump up revenue, there were sound business reasons for the so-called "swaps."
Nacchio, who was forced to resign this past summer, says there was no shady dealing, just hard charging business executives working uncharted territory with no guidance from the auditors.
"I was not the ethics cop. I was the CEO and I had to run a business," Nacchio testified Tuesday.
His testimony comes at a bad time.
Nacchio and Qwest's largest stockholder and founder, Denver billionaire Philip Anschutz, are among five big hitters in the telecom industry that the attorney general of the state of New York says made money from side deals with an investment banking firm that did business with Qwest.
New York Attorney General Eliot Spitzer alleges Qwest and several other companies steered underwriting business to Salomon Smith Barney in exchange for giving the executives access to lucrative initial public offering shares.
In other words, in exchange for sending Qwest business to the firm, Nacchio and Anschutz were alleged to give first crack at very lucrative new stock issues.
The attorney general says Anschutz made $4 million dollars, Nacchio made a million and wants them to turn over that money.
Anschutz, through a spokesman denies any wrongdoing.
Nacchio, through his lawyer, also denies any wrongdoing.
But if the case proceeds, both men may have to defend their actions in court.
The committee earlier heard from a Global Crossing employee who
lost her $86,000 retirement savings and from a laid-off Qwest
employee whose 401(k) retirement plan had lost $230,000 because of
the drop in Qwest stock.
Paula Smith worked for 20 years for Qwest and its predecessors
in the local telephone business in the West.
Former Qwest chief executive Joe Nacchio, chief operating officer Afshin Mohebbi, and Global Crossing chairman Gary Winnick testified before the Energy and Commerce committee today.
Nacchio is expected to be asked about the nearly $1 billion that Qwest wrote off the books a week or so ago.
And he was expected to say exactly what the executives from Global Crossing have been saying so far about the same deals -- that in spite of memos from the sales staff that these were junk deals intended to pump up revenue, there were sound business reasons for the so-called "swaps."
Nacchio, who was forced to resign this past summer, says there was no shady dealing, just hard charging business executives working uncharted territory with no guidance from the auditors.
"I was not the ethics cop. I was the CEO and I had to run a business," Nacchio testified Tuesday.
His testimony comes at a bad time.
Nacchio and Qwest's largest stockholder and founder, Denver billionaire Philip Anschutz, are among five big hitters in the telecom industry that the attorney general of the state of New York says made money from side deals with an investment banking firm that did business with Qwest.
New York Attorney General Eliot Spitzer alleges Qwest and several other companies steered underwriting business to Salomon Smith Barney in exchange for giving the executives access to lucrative initial public offering shares.
In other words, in exchange for sending Qwest business to the firm, Nacchio and Anschutz were alleged to give first crack at very lucrative new stock issues.
The attorney general says Anschutz made $4 million dollars, Nacchio made a million and wants them to turn over that money.
Anschutz, through a spokesman denies any wrongdoing.
Nacchio, through his lawyer, also denies any wrongdoing.
But if the case proceeds, both men may have to defend their actions in court.
The committee earlier heard from a Global Crossing employee who
lost her $86,000 retirement savings and from a laid-off Qwest
employee whose 401(k) retirement plan had lost $230,000 because of
the drop in Qwest stock.
Paula Smith worked for 20 years for Qwest and its predecessors
in the local telephone business in the West.
Previous Stories:
- September 30, 2002: Qwest Changes Slogan To 'Spirit Of Service'
- September 27, 2002: Qwest Founder Under Congressional Scrutiny
- September 23, 2002: Qwest Restates Nearly $1 Billion In Revenue
- August 23, 2002: Qwest Employees Locked Out Of Buying Company Stock
- August 13, 2002: Qwest To Pay $1 Million Plus In Landmark Settlement
- August 8, 2002: Qwest Posts $1.1 Billion Loss
- July 29, 2002: Qwest To Restate Earnings From 1999 To 2001
- July 10, 2002: Qwest Subject Of Criminal Investigation
- June 17, 2002: Nacchio Out As Qwest CEO
- June 4, 2002: Qwest CEO Criticized At Stockholders' Meeting
- May 23, 2002: Qwest's Rating Downgraded To Junk Status
Copyright 2002 by TheDenverChannel.com. The Associated Press contributed to this report. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
