Remember Joseph Nacchio?
Yahoo just announced that it will shortly be releasing the docket from its 2008 effort to challenge a Protect America Act order.
In a report on the release, WaPo notes that the government threatened Yahoo with a $250,000 day fine for not complying with the Protect America Act order (appreciate the irony of that law’s name!).
The U.S. government threatened to fine Yahoo $250,000 a day in 2008 if it failed to comply with a broad demand to hand over user data that the company believed was unconstitutional, according to court documents unsealed Thursday that illuminate how federal officials forced American tech companies to participate in the NSA’s controversial PRISM program.
Umph. That kind of fine would add up quickly.
Which got me thinking about Joseph Nacchio, the Qwest CEO who claims the real source of his insider trading scandal arose from government retaliation when he refused to do something — in January 2001, before NineElevenChangedEverything — that he considered illegal.
According to Nacchio, his troubles can be traced back to a meeting at the NSA’s Fort Meade, Md., headquarters on Feb. 27, 2001. The agency asked that Qwest participate in a surveillance program, but Nacchio considered the proposed action to be illegal.
Nacchio was unable to explain the exact nature of the request, which remains classified. However, contrary to news reports, he said discussions with the NSA at the February 2001 meeting didn’t involve turning over telephone records.
“I found that request to be peculiar. I didn’t think it was legal. I asked for legal justification. We never got it, and therefore we never did it,” said Nacchio, who completed his prison sentence in September. “That was the moment things turned down for me.”
The former AT&T (T) executive resigned from his post at Qwest in 2002 after the Securities and Exchange Commission launched an insider-trading investigation. In 2007, he was charged with 42 counts of insider trading.
Nacchio was ultimately convicted on 19 counts for selling stock between April and May 2001, leading to the forfeiture of $44.6 million and a $19 million fine. He was sentenced to six years in jail, but his time was reduced to 70 months.
Obviously, the size of Yahoo’s fine — for a congressionally authorized, even if unconstitutional program — lends far more credibility to the claim that the government retaliated by setting Nacchio up for an insider trading prosecution. (See also this post which tracks some interesting discrepancies in the stories, which is one of a number of reasons I believe the NSA IG report on the illegal dragnet is itself incorrect.)
It also makes me wonder about two other companies — an Internet company, and what is probably something like Cisco — that refused to cooperate with the illegal dragnet.
There really isn’t a lot of rule of law surrounding the government’s spying.
Nacchio is a true shit stain who depleted the life’s savings of a lot folks (including my parents), but given that the SEC hasn’t come down on any other CEOs, ever, I wouldn’t be a bit surprised if there wasn’t some substance to his claims.
I like this quote from a Bushie about the NSA forcing Yahoo! to turn over user data to PRISM even though the case was being appealed:
“Stewart Baker, a former NSA general counsel and Bush administration Homeland Security official, said it’s not unusual for courts to order compliance with rulings while appeals continue before higher courts.”
Except for, you know, cases involving same-sex marriage rights, where no one’s really being harmed but courts stay their rulings anyway while bigots appeal.
Feature, not bug.
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At what point, I wonder, will tech companies start monitoring the electronic traffic emerging from the NSA, as a matter of corporate self-defense?
quote”At what point, I wonder, will tech companies start monitoring the electronic traffic emerging from the NSA, as a matter of corporate self-defense?”unquote
Corporate self defense??????? Hey pal, at what POINT do YOU decide YOUR children’s future is at stake. FUCK THE CORPORATIONS. When push comes to shove..you might want to start thinking about what the fuck you are going to feed them when the entire food chain collapses in three days. Corporations. Hhahahahahahahahahahahaha! Get a grip.
I don’t know how you do this shit emptywheel. All I know is you are a Samurai wielding a sword of truth so sharp those who would place their presence within the arc of it’s vector are idiots.
Just dropping in from the ozone — do we know what we’re talking about (as in I’m lost)?
Request was not phone records, per above:
Request was about phone records, per Ellen Nakashima and Dan Eggen, WaPo October 13, 2007:
(Has Snowden said?) (Sorry for not keeping up.)
Do the FBI, DEA, and NSA recognize any limits to their power? Or do they view any setbacks in obtaining information merely as temporary until they can find a way to end run around the law and the Constitution? These agencies want every request they make of cellphone and internet providers to remain secret for fear that too much publicity will result in a public outcry and lawsuits by lawyers who recognize the illegality of what they’re requesting. If reformers could find a way to ensure that any request for information would be revealed to those affected and the public in a timely fashion, these agencies would have to justify what it is they’re trying to do, which could be awkward for them. Based on the information I’ve gleaned on this site, I now believe that the two reform bills in Congress to rein in the NSA are inadequate, if not bogus. In fact, I am beginning to believe that the bills have gotten as far as they have because the NSA has a secret agenda to increase their powers under the guise of “reforming” their data acquisition programs. Like most Americans today, I no longer trust our government or our elected politicians to do what is appropriate in a manner consistent with our democratic values. Thank God we have people like Edward Snowden and Glenn Greenwald, among others, who have been able to put the spotlight on the cockroaches at work deep inside the government.
Yes, I remember the Nacchio story. Here is a news story I clipped from some years back:
2007 10-11 Documents show Qwest was targeted
‘Classified info’ was not allowed at ex-CEO’s trial
Sara Burnett And Jeff Smith, Rocky Mountain News
“The National Security Agency and other government agencies retaliated against Qwest because the Denver telco refused to go along with a phone spying program, documents released Wednesday suggest.
The documents indicate that likely would have been at the heart of former CEO Joe Nacchio’s so-called “classified information” defense at his insider trading trial, had he been allowed to present it.
The secret contracts – worth hundreds of millions of dollars – made Nacchio optimistic about Qwest’s future, even as his staff was warning him the company might not make its numbers, Nacchio’s defense attorneys have maintained. But Nacchio didn’t present that argument at trial.
The documents suggest U.S. District Judge Edward Nottingham refused to allow Nacchio to present the argument about retaliation. Nottingham also said Nacchio would have to take the stand to raise the classified defense.
Prosecutors have said they were prepared to poke holes in Nacchio’s classified defense.
Nacchio was convicted last spring on 19 counts of insider trading for $52 million of stock sales in April and May 2001, and sentenced to six years in prison. He’s free pending appeal.
The partially redacted documents were filed under seal before, during and after Nacchio’s trial. They were released Wednesday.
Nacchio planned to demonstrate at trial that he had a meeting on Feb. 27, 2001, at NSA headquarters at Fort Meade, Md., to discuss a $100 million project. According to the documents, another topic also was discussed at that meeting, one with which Nacchio refused to comply.
The topic itself is redacted each time it appears in the hundreds of pages of documents, but there is mention of Nacchio believing the request was both inappropriate and illegal, and repeatedly refusing to go along with it.
The NSA contract was awarded in July 2001 to companies other than Qwest. . . .”
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More than a few people should have been sent to prison over this, talk about abuse ofower.