Recent revelations about former Qwest chief executive Joe Nacchio’s classified-information defense, which went unheard during his insider-trading trial, are feeding the furor over the government’s warrantless-wiretapping program.

Nacchio alleges the National Security Agency asked Qwest to participate in a program the phone company thought was illegal more than six months before the Sept. 11, 2001, terrorist attacks, according to court documents unsealed at the request of The Denver Post.

Nacchio also maintains that when he refused to participate, the government retaliated by not awarding lucrative contracts to Qwest.

Previously sealed transcripts released at the same time as the court documents indicate the government was prepared to counter Nacchio’s claims.

Though specifics about the wiretapping program were redacted from the court documents, Nacchio’s attorney Herbert Stern said in May 2006 that Nacchio rejected requests from the government for customers’ phone records in fall 2001.

The recently unsealed documents push that time frame back to February 2001 and indicate the NSA may have also sought to monitor customers’ Internet traffic and fax transmissions.

Nacchio’s claims could affect President Bush’s controversial efforts to grant legal immunity to large telecommunications companies such as AT&T, which has been sued in connection with the surveillance program.

“The Nacchio materials suggesting that the NSA had sought telco cooperation even before 9/11 undermines the primary argument for letting the phone companies off the hook, which is the claim that they were simply acting in good faith to help the president fight the terrorists after 9/11,” said Kevin Bankston, a staff attorney for the Electronic Frontier Foundation, a civil-liberties group.

“The fact that these materials suggest that cooperation with the program was tied to the award of certain government contracts also contradicts their (phone companies’) claims that they were simply acting in good faith to help fight the terrorists when it appears that they may have been motivated by financial concerns instead,” Bankston said.

Up to this point, discussions on Capitol Hill over telecom immunity have focused on government surveillance efforts spurred by the Sept. 11 terrorist attacks.

“This is, sooner or later, going to be the stuff of congressional hearings because a new starting point has been established for this controversy. A new starting point seven months before 9/11,” said Ron Suskind, author of “The One Percent Doctrine,” which reported examples of how companies worked with the government in its fight against terrorism after Sept. 11.

“The idea that deals were getting cut between the government and telecom companies in secret in the early part of 2001 creates a whole new discussion as to intent, motivation and goals of the government,” Suskind said.

Last week, Rep. John Conyers Jr., D-Mich., chairman of the House Judiciary Committee, asked federal intelligence officials for more information about Nacchio’s allegations.

“The extent to which this is true could shed light on the efficacy of this program and raise questions about the reasons behind its implementation,” Conyers wrote on his blog.

For his part, Nacchio wanted to introduce the claims to show he didn’t sell Qwest stock illegally in early 2001. The government alleged Nacchio dumped Qwest stock because he had inside information that the Denver company’s financial health was deteriorating. He was convicted on 19 counts of insider trading in April after a month-long trial and sentenced to six years in prison.

He remains free on $2 million bond pending his appeal, which, among other charges, is challenging rulings U.S. District Judge Edward Nottingham made related to the classified-information defense.

Nacchio has maintained he was upbeat about Qwest because he had top-secret information that the company would receive hundreds of millions in government contracts. But Nacchio didn’t call any witnesses to back up that contention after Nottingham denied his requests to present evidence about the alleged retaliation.

Nacchio’s connections to top-secret agencies date back to late 1997, according to court documents filed in 2000 and early 2001 and unsealed this month.

The first meeting Nacchio had with officials from a clandestine agency – including a three-star lieutenant general – was at Qwest’s offices in Denver. The officials sought to use Qwest’s fiber-optic communications network for government purposes.

The agency issued a request for information after the meeting and “quickly concluded that only Qwest had the capability to fulfill the contract requirements.” It eventually wanted Qwest to extend its European network to the Middle East.

Qwest’s work was “sufficiently important to (blacked out) that the agency would constantly monitor Qwest’s financial health, particularly after the dot-com bubble burst.” The agency would call Qwest whenever its stock fluctuated, and even voiced concerns to the company about a potential takeover bid by Deutsche Telekom, Nacchio alleges in the court documents.

During 2000 and early 2001, Nacchio routinely met with clandestine agencies to discuss how to protect the U.S. government’s systems from cyber-warfare.

In September 2000, an “Army customer” wanted help from Qwest.

On Feb. 27, 2001, Nacchio met with NSA officials in Fort Meade, Md., to discuss a contract called “Groundbreaker.”

That contract wasn’t classified, but Nacchio contends NSA officials wanted Qwest to participate in another program. 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,” according to a recounting of the meeting by James Payne, former head of Qwest’s government division.

About the same time, AT&T was working on a project with the NSA dubbed “Pioneer-Groundbreaker.” According to allegations in a lawsuit filed against AT&T and other large telecom companies, “Pioneer- Groundbreaker” called for the construction of a data center that would allow the NSA to tap into AT&T’s network and monitor phone calls, fax transmissions and Internet activity.

The House Committee on Energy and Commerce this month launched an investigation into the warrantless- wiretapping program.

In response to questions from the committee, Verizon said that since 2005 it has provided customer information to federal authorities in hundreds of emergency cases without court orders. The company said the information it has provided includes call records, IP addresses and credit card and bank account numbers.

Andy Vuong: 303-954-1209 or avuong@denverpost.com