This is a huge and wide-ranging story. Let me see if I can draw upon some of what's already been written about it to compress it into a manageable narrative.

OK, first there's this:

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.

Surprised? Of course not. Nor should you be. Because that's exactly what was theorized right here by Daily Kos diarist pacified, a year and a half ago:

I'm not sure of all the "ins-and-outs" of the SEC investigation into Qwest, Nacchio, et. al, but look at the timeline. After 9-11 in 2001, Bush confronts the major phone companies for their caller information. Qwest refuses to "play ball" between then and 2002, finally leading to the SEC in 2002.

For those of you not clear on what the SEC (Securities and Exchange Commission) is:

Each year the SEC brings hundreds of civil enforcement actions against individuals and companies for violation of the securities laws. Typical infractions include insider trading, accounting fraud, and providing false or misleading information about securities and the companies that issue them.

Hmm. Wow. Big time telecom CEO refuses to play ball with the Bush "administration's" illegal spying program, and suddenly finds himself a political enemy and... on the wrong end of a federal prosecution. What does that remind us of?

If you said, "the entirety of the scandal surrounding the unprecedented politicization of the U.S. Attorneys," you've said a mouthful in more ways than one.

I mean, isn't it odd that then-Acting U.S. Attorney for Colorado Bill Leone ("Acting," because the "administration" hadn't had an opportunity to install its chosen nominee yet), who was personally handling the Nacchio prosecution, was pulled off the case and replaced by hand-picked DOJ lawyers instead? Maybe not, right? The DOJ just wanted to send securities fraud specialists to handle this very important case.

Maybe. Sorta.

I mean, really. It's not like there's any kind of known link between the SEC and the scary-crazy "national security" apparatus that's being used as a cloak to cover the dismantling and looting of the federal government or anything.

Right? I mean, what connection could there possibly be?

MAY 23, 2006

NEWS

By Dawn Kopecki Intelligence Czar Can Waive SEC Rules

Now, the White House's top spymaster can cite national security to exempt businesses from reporting requirements President George W. Bush has bestowed on his intelligence czar, John Negroponte, broad authority, in the name of national security, to excuse publicly traded companies from their usual accounting and securities-disclosure obligations. Notice of the development came in a brief entry in the Federal Register, dated May 5, 2006, that was opaque to the untrained eye.

Besides that one, I mean.

We know, of course, that when Bush gives Cheney the authority to classify information, Cheney insists it means he has the right to declassify it as well. (Turns out not to really be true.) So when Bush gave the Director of National Intelligence the authority to excuse companies from compliance and therefore from trial for securities violations, did he also mean for him to claim the authority to put the SEC on your trail?

But even if he did, wouldn't there have to be a fire under all that smoke in order for Nacchio to be convicted? Well, sure. The only problem (as predicted) is that once you've been caught corrupting the Department of Justice, everyone you prosecute is going to wonder if you lit those fires yourself.

Remember, Nacchio was convicted of (and faces six years in prison for) selling Qwest stock based on unfair insider information -- specifically, selling Qwest stock at a premium when he knew or should have known, based on that insider information, that the company's earnings were going to be considerably lower than publicly available information would have suggested. That's cheating, and it's against the law.

But let's split up today's Rocky Mountain News article and put some of the events back in chronological order:

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.

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.

The NSA contract was awarded in July 2001 to companies other than Qwest.

See what I'm getting at here? The government says Nacchio is guilty of insider trading because when he sold his stock in April and May of 2001, he knew or should have known that it was significantly overvalued, because the company's earnings were dwindling.

But beginning in February 2001, Nacchio believes Qwest has got an inside track on a $100 million contract. And...

Nacchio also asserts Qwest was in line to build a $2 billion private government network called GovNet and do other government business, including a network between the U.S. and South America.

Why would Nacchio think he had that money sewn up?

Nacchio was on a Bush-appointed national security telecommunications advisory panel.

That's usually as good as cash in the bank with this "administration."

So Nacchio might have had every reason in April and May 2001 to believe Qwest was looking good. It wasn't until July that the government steered the contracts elsewhere.

And then all of a sudden, Qwest stock's not looking so good. In fact, it looks terrible. And just two months before, CEO Nacchio was selling $52 million worth?

Book 'im, boys. Tell it to the judge, Nacchio!

Only Nacchio couldn't. Classified. "National security," dontcha know. So it looks like it's six years in the pen for Nacchio.

And the moral of the story? Political opponents of the Bush "administration" get fingered by the feds. You get spied on. And Sen. Jay Rockefeller (D-WV), writing the Senate's new FISA bill, says Nacchio -- who refused to hand over customer data illegally to the governmetn -- can rot, while AT&T and others -- who gave you up to the feds -- get retroactive immunity.

Any Senator who votes for this retroactive immunity under these conditions is a stone moron.