Joe Nacchio: CEO or Secret Agent?

By Tim Beyers
November 22, 2005
Motley Fool

...Authorities have made [ Quest CEO, Joe] Nacchio the centerpiece of a federal investigation into an accounting scandal that forced the telco to restate its 2000 and 2001 earnings, which were found to be inflated by an aggregate of $2.2 billion.

Nacchio has long denied any wrongdoing in the case, but some might argue he was somewhat more fortuitous in his timing of sales of Qwest stock than your average Joe or Jane Oddlot. Nacchio's defense has been that he established a regular program of pruning to diversify his portfolio and that his hyperbolic public statements that touted the company were nothing more than optimistic puffery grounded in a naive belief that the business was just humming along. Call it the "I didn't know someone else was cooking the books" defense, if you like.

It now appears the story has changed. According to yesterday's edition of The Wall Street Journal, Nacchio's so-called pumping was motivated by the knowledge that the firm had landed secret national security contracts and was expecting to receive more. In other words: By day, he was a mild-mannered spreadsheet-touting CEO. By night, he was a back alley negotiator brokering secret deals with government spooks promising to increase sales and earnings for years. Call it the "I could tell you but I'd have to kill you" defense...

Labels: Joe Nacchio, Quest