None of this is remotely surprising.
Did the NSA’s massive call records database program pre-date the terrorist attacks of 9/11?
That startling allegation is in court documents released this week which show that former Qwest CEO Joseph Nacchio — the head of the only company known to have turned down the NSA’s requests for Americans’ phone records — tried, unsuccessfully, to argue just that in his defense against insider trading charges.
Nacchio was sentenced to 6 years in prison in 2007 after being found guilty of illegally selling shares based on insider information that the company’s fortunes were declining. Nacchio unsuccessfully attempted to defend himself by arguing that he actually expected Qwest’s 2001 earnings to be higher because of secret NSA contracts, which, he contends, were denied by the NSA after he declined in a February 27, 2001 meeting to give the NSA customer calling records, court documents released this week show.
AT&T, Verizon and Bellsouth all agreed to turn over call records to an NSA database, according to reporting in the USA Today in 2006. At that time, Nacchio’s lawyer publicly stated that Nacchio declined to participate until served with a proper legal order.
The government has never confirmed or denied the existence of the program, but is trying to win legal immunity for telecoms being sued for their alleged participation in the call records program and the government’s warrantless wiretapping of Americans. Turning over customer records to anyone, including the government, without proper legal orders violates federal privacy laws.
Nacchio’s attempt to depose witnesses and present the classified defense was declined by Colorado federal district court judge Edward Nottingham, a decision that is playing a role in Nacchio’s pending appeal to the 10th Circuit Appeals court.
The allegation is peppered throughout the highly redacted documents released by the lower court today, but are most clear in the introduction to this filing (.pdf) from April 2007.
Defendant Joseph P. Nacchio … respectfully renews his objection to the Court’s rulings excluding testimony surrounding his February 27, 2001 meeting at Ft. Meade with representatives from the National Security Agency (NSA) as violative of his constitutional right to mount a defense. Although Mr. Nacchio is allowed to tell the jury that he and James Payne went into that meeting expecting to talk about the “Groundbreaker” project and came out of the meeting with optimism about the prospect for 2001 revenue from NSA, the Court has prohibited Mr. Nacchio from eliciting testimony regarding what also occurred at that meeting. [REDACTED] The Court has also refused to allow Mr. Nacchio to demonstrate that the agency retaliated for this refusal by denying the Groundbreaker and perhaps other work to Qwest.
By being prevented from telling his full story to the jury or from fully and properly cross-examining any rebuttal witnesses, Mr. Nacchio has been deprived of the ability to explaoin why – after he came out of the February meeting with a reasonable, good faith, expectation that Qwest would be receiving significant contracts from NSA in 2001 … Qwest was denied significant work.
[ed note. James Payne, Qwest’s government liason who was also at February 27, 2001 meeting, later spoke with government agents in 2006].
In the interview, Mr. Payne confirmed that, at the February 27, 2001 meeting, “[t]here was some discussion about [redacted]. Mr. Payne also stated: Subsequent to the meeting the customer came back and expressed disappointment at Qwest’s decision. Payne realized at this time that “no” was not going to be enough fro them. Payne said they never actually said no and it went on for years. In meetings after meetings, they would bring it up. At one point, he suggested they just them, “no.” Nacchio said it was a legal issue and that they could not do something their general counsel told them not to do. … Nacchio projected that he might do it if they could find a way to do it legally.
There was a feeling also, that the NSA acted as agents for other government agencies and if Qwest frustrated the NSA, they would also frustrate other agencies.
The Groundbreaker contract, reportedly worth $2 – $5 billion dollars, outsources the NSA’s IT management, but at least one lawsuit charges the project was cover for a domestic spying program.
Notably, after the USA Today story ran , Nacchio’s lawyer Herbert Stern, who argued his case before trial, released this statement:
In light of pending litigation, I have been reluctant to issue any public statements. However, because of apparent confusion concerning Joe Nacchio and his role in refusing to make private telephone records of Qwest customers available to the NSA immediately following the Patriot Act, and in order to negate misguided attempts to relate Mr. Nacchio’s conduct to present litigation, the following are the facts.
In the Fall of 2001, at a time when there was no investigation of Qwest or Mr. Nacchio by the Department of Justice or the Securities and Exchange Commission, and while Mr. Nacchio was Chairman and CEO of Qwest and was serving pursuant to the President’s appointment as the Chairman of the National Security Telecommunications Advisory Committee, Qwest was approached to permit the Government access to the private telephone records of Qwest customers.
Mr. Nacchio made inquiry as to whether a warrant or other legal process had been secured in support of that request. When he learned that no such authority had been granted and that there was a disinclination on the part of the authorities to use any legal process, including the Special Court which had been established to handle such matters, Mr. Nacchio concluded that these requests violated the privacy requirements of the Telecommunications Act.
Accordingly, Mr. Nacchio issued instructions to refuse to comply with these requests. These requests continued throughout Mr. Nacchio’s tenure and until his departure in June of 2002.
Note that Stern says a request was made in the Fall of 2001. Stern does not say “first approached” in the statement, though that clearly seems to be the implication. But it’s not what the four corners of Stern’s statement says. And finally, the redactions in the documents make it impossible to say what the February 21, 2001 requests from the NSA were. It could have been a request from NSA to do some other eavesdropping thing that Nacchio felt uncomfortable with, but I’m very doubtful.