Update on the Government's Response to Nacchio

by emptywheel

Two words about this update. First, to clarify from my earlier post: the WaPo article refers to a filing written in February 2007 that was just unsealed yesterday. So in fact, there are several more recent filings from Nacchio that rebut the claims made in this newly unsealed document.

Here's the important part. From reading the available filings, it's unclear whether Nacchio is right that he lost the Groundbreaker business because he refused to participate in activities the Qwest General Counsel deemed to be illegal. But as far as I can tell, there is no dispute that NSA asked Qwest to do something the latter judged to be illegal (though the government has redacted many of the references to this purportedly illegal request). In other words, while I can't address Nacchio's central question of whether this material might be enough to refute his insider trading charges, I can say that the record appears to support Nacchio's claim that he was asked to do something he believed to be illegal (which we've assumed was domestic spying).

Update: Actually, let me revise that. The government is not disputing with this filing that Qwest was asked to do something illegal and Payne's testimony appears to support that claim. It's unclear whether the government is simply trying to refute charges by directing attention to the contracts or whether they're trying to distract away from the claims about an illegal request.

Here's the filing that appears to be the basis of today's WaPo article claiming that the government's filing refutes Nacchio's claims. While I can't speak to the veracity of Nacchio's central claims, the filing unsealed yesterday doesn't do what Carrie Johnson says it does. For starters, this appears to be a clear attempt (successful, in the case of Johnson) to refute claims made in July and later by unsealing a document written in February.

Johnson lists two ways in which the filing unsealed yesterday refute Nacchio's claims. First, that Qwest was included among the consortium that eventually won the Groundbreaker business.

Qwest was one of more than a dozen "strategic vendors" that provided services to the Eagle Alliance, which won a contract in July 2001 to upgrade computer systems and equipment at the National Security Agency, according to a document that prosecutors attached to their court filing yesterday.

And second, that the testimony of James Payne refutes Nacchio's claims about the February 2001 meeting. Let's take these in order.

The Groundbreaker Strategic Vendors

The filing unsealed yesterday asserts that, "Qwest was part of the Eagle Alliance consortium that was awarded the contract." To support that claim, they point to a proposal dated Arpil 2, 2001, that lists Qwest as one of 32 "Strategic Vendor Partners" included in the Eagle Alliance. AT&T is not listed anywhere in the alliance. Verizon is listed as a "Technology and Service Delivery Partner" (a more central player in the alliance, apparently).

Now, first of all, this evidence does not refute Nacchio's claim. As early as October 2006, Nacchio asserted that Qwest was in active negotiations with Eagle Alliance through February and March 2001, even citing a Payne email to that effect. What he claims, though, is that,

It wasn't until July 31, 2001, when Mr. Nacchio saw the public announcement of the Groundbreaker contract, with Qwest left off the list of subcontractors, that he realized that his expectation for the work had been frustrated.

In other words, the government introduced a document that agrees with Nacchio's version of events, yet claims that it refutes it.

WaPo's Johnson asked Qwest for details about whether Qwest ever participated in the program, but got no answer.

It remains unclear how much money, if any, Qwest collected under the contract, as representatives at the telecom company and other sources declined to comment yesterday, citing national security concerns.

The government claims that Nacchio has contracts that prove Qwest was part of the consortium, but did not include those contracts in its filing. So as to the assertion of whether Qwest ever got any of the Groundbreaker business? We have no frigging clue, but the government certainly hasn't made a case that it was.

The Payne Conversation

As I suspected, the government filing refers to a July 2006 conversation with James Payne, and makes no mention of an October 2006 conversation that offers different views. Further, it redacts key issues that go to the heart of the dispute, saying (for example) that:

Mr. Payne directly contradicts defendant's proffer, made in his first Section 5 Submission and repeated at various times since then that [2 and a half lines redacted]

Oddly, the government makes two assertions in this filing. First, that Payne "does not mention Groundbreaker anywhere in his memoranda of interview." But at the same time, Qwest got some of the Groundbreaker business and therefore Nacchio is not telling the truth when he alleges that he got cut out of the Groundbreaker business. There's something Kafka-esque here, when the non-mention of a big contract by the guy in charge of government contracts is presented simultaneously with a claim that Qwest got the business. It suggests to me that either Payne is an unreliable witness or Qwest didn't get the business.

And perhaps not surprisingly, the passages they use to make the following assertion ...

As this citation further makes clear, Mr. Payne describes this meeting as a "howdy call" not a meeting to discuss Groundbreaker.

...are also heavily redacted. They're also classified Secret, and appear just after two paragraphs classified Top Secret that are completely redacted. So the assertion that there was an underlying conversation going on--a request to illegally tap Americans--is supported by passages like the following:

(S) They then went to [about five words redacted]. They met in an office. It was a "howdy call" [Two lines redacted]

More importantly, it is supported by comparing the February 2007 filing with the July 2007 one. The latter cites directly from the Payne interview--from what must be a passage redacted in the earlier filing:

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 for 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 that they just tell them, "no." Nacchio said it was a legal issue and they could not do something their general counsel told them not to do ... Nacchio projected that he might do it if they coudl 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.

In other words, there appears to be no argument that the NSA asked Qwest to do something which Qwest judged to be illegal. Yet the government has subsequently made numerous claims that that is not true (in the February 2007 filing, and also, in a cited comment in the July 2007 filing, in an August 2006 filing, not to mention disavow early instances where they admitted it.

The release of this document--and the discussions about Groundbreaker--appears to be a shiny object. That is, it appears that the government has affirmed that Qwest was asked to do something it judged to be illegal. While there may be some dispute about whether Qwest was denied Groundbreaker work (as I noted, no one is showing the contracts), there appears to be little dispute about what we all care about: NSA kept asking Qwest to do something, and Qwest was trying to stay on the right side of the law without alienating NSA.

Comments

[pdaly]

Despite Nacchio's legal woes, I'd say Payne is making out rather well.

I wonder why the prosecutors did not inform Nacchio of the Payne/FBI interview(s) before Nacchio had to make his proffer? I seems Payne's commnets help to prove Nacchio's statement that the NSA was asking Qwest to cooperate with its spying programs. But if not, re: Payne (as a reliable witness), I recall bmaz in an earlier comments thread mentioned Payne is now working for Bechtel.

"Mr. Payne brings to Bechtel a distinguished record of more than 25 years of successful management experience with some of the largest U.S. telecommunications firms. Most recently, as the Senior Vice President and General Manager of a $400 million division of Qwest, he achieved a 300 percent increase in revenue in just 3 years and established Qwest as a major provider in the federal civilian and defense market. Previously, during 16 years with Sprint Communications, he led the strategic planning and marketing for the company's government division. He was the capture manager and operations manager of a $1.3 billion Federal Technology Service program for the General Services Administration that provides efficient, low-cost long-distance, Internet, and data transmission services to civilian agencies, including the Justice and Treasury departments, the White House, NASA, and the Veterans Administration."

[pdaly]

Nacchio's recently released court filing also makes it fairly clear that the NSA refused to get a FISA court ruling on the program's legality to assuage Qwest's legal counsel so that Qwest could say yes to the NSA offer. Nacchio's court filing also makes it clear the NSA did not have for Qwest, in lieu of a FISA ruling, an Attorney General-signed letter asserting the legality of the proposed spying program.

From the public's standpoint, this gets to the crux of the issue on NSA eavesdropping: one has to assume the remaining telcos were helping the NSA to spy illegally on Americans. Hope retroactive immunity deals remain off the table in Congress...

[Mary]

It was a "howdy call" [Two lines redacted]

Kind of the DOJ version of a secret handshake - a state secrets classification of the words used to formulate the essence of "howdy"

Here's the question I think is interesting. All of the redactions indicate that Nacchio is in on all the state secrets.

You know - Nacchio - the DOJ convicted felon guy. So that's the example of how they will be protecting the program and the info from the program? By only involving sterling characters like Nacchio? Their felon who was more concerned about the legality of their program than the rest of DOJ is in on all the secrets, but they argued to courts that they couldn't tell the judges about the program bc of the risks to national security.

DOJ meets Laughably Idiotic and Immorally Dishonest - no howdy needed, you guys have been friends now for 6 years.

[William Ockham]

The key new information in this document is the first line on page 3:

Mr. Nacchio's refusal to allow [REDACTION] resulted in reprisal by NSA...

There is really only one thing that can reasonably follow "allow" and that is some form of unfettered access to Qwest's network. This is as close as we'll get to proof that the wiretapping started before 9/11.

[nolo]

". . .As this citation further makes clear, Mr. Payne describes this meeting as a "howdy call" not a meeting to discuss Groundbreaker. . ."

that is plainly the government's
version of it -- however. . .
it is my opinion that these two
are not mutually-exclusive: just
because this was apparently, one
of the last "eyeball-check" meetings
before qwest was to undertake "im-
portant, substantial, secret work",
does NOT, in any way, refute the
nacchio central claim -- that this
WAS already about groundbreaker.

EW -- i do think you are dead to rights
about this being a shiny object -- but
i also think mr. nacchio will go to
jail, anyway. what remains to be
seen is whether leahy, conyers, waxman
(and others) will ever get to see the still-
blacked-out portions -- and whether,
in fact, a program was being bid-out
[by the government] for "built-in"
warrantless wiretapping and surveillance
[via metadata searches, among other
means], as early as spring of 2001.

just my 0.02.

ps: the filed-page EW refers to, above, may be
viewed in its entirety as a standalone
jpeg right here.

p e a c e

[nolo]

sorry. i forgot to mention
that payne, on the very same
page -- at the end of the third
paragraph from the bottom (counting
redacted paragraphs as paragraphs) -- was
quoted as saying that "a record of the
meeting would have been made."

he plainly means "by the agency."

why is it that the government hasn't
made that record available? why?

because it very likely indicates
the subject to be: groundbreaker
"howdy" meeting with CEO. . .

p e a c e

[John Lopresti]

I would look at the USTA record for the timeframe during which Qw's ceo is accused of insider trading. I sense an in-crowd flinging of elbows the ref is blocked from seeing here. JNacc is going to employ the CIFA dot process because it is available, naturlich. Also similar in JNacc's argument is the white house use of the press as a source after planting a story with a chosen acolyte; at least, my particular stretch on this argument among titans would have it that way (comparing Judy's role in a separate matter and the political strategist managing these affairs for Bush at the time): namely, it is a small club which comprises the likeliest bidders on defense telecoms, and among those candidates' spreadsheets the one with the least dominating bottom line was Qw, though in certain subregions of the global telco landscape Qw was better than it could be in strictly domestic defense bids, e.g., as a commenter said earlier, in Latin America, and central Europe during the timeframe of the ostensible insider trading. I found a notice of an amicus filing today by that outfit, as well. Footnote*2: Greenberg Traurig is the firm of the prosecutor, another name from past whitehouse politics. Admittedly, I have yet to be current with this case, but I noticed another possibly interesting Footnote*3, viz., one early case was brought by plaintiff SEC; I am trying to remember when precisely CCox won that post's appointment process. Another factor in whether the suit was brought against a get-shorty JNacc could be, going wayback, MPowell's tenure's having spanned the early period when the infractions were occurring but then MPowell's having left that oversight commissionFCC helm before the GJ process completed; or so go my approximations of the multithreaded history involved here. Incidentally, defendant's firm's website is slightly differently named from the way the firm members email return addresses are drawn; the barebone website is there.

[sailmaker]

Um, is there a time-wiki on this subject? I feel like I'm reading a foreign language where I don't know the the direct objects - i.e. who is doing what to whom (and telling lies about it). Maybe if someone could give a link to the starting point?

[John Lopresti]

sail', There is the industry gossip entity, which I read assiduously for one decade; take it with an insider's skeptical grain of salt. I worked for consultants thru most of this saga, but am out of the trade currently enjoying other pursuits as the characterization goes. My suggestions were for history taking; ew excells at that, and has posted many appropriate insights, so the full comparative chronology should be a fairly easy next phase here. I have written to a journalist who used to work in the business concerning the JNacc case, which is scheduled for argument in a few months; so there is a modicum of time for some research to develop. I am very busy on other projects.
J.

[scribe]

Go read my comments - mostly concerning black-bag jobs (see here at CNET http://www.news.com/8301-13578_3-9801975-38.html) - here http://www.talkleft.com/comments/2007/10/23/173823/69/2#2 and here http://www.talkleft.com/comments/2007/10/23/173823/69/3#3 on the intersection of New FISA and how Nacchio's treatment was a foretaste of how the discretionary immunity the AG can dole out under New FISA will work.

Comply, or else.

[readerOfTeaLeaves]

Sigh. Another bright shiny object? Aren't we already blinded by the glare?
Looks like 'Groundbreaker' is the ArmitageRedHerring of this mess.

[radiofreewill]

OT but related

I read Valerie Wilson's HuffPo article regarding "Why Military types should not run the CIA":

http://www.huffingtonpost.com/valerie-plame-wilson/why-military-types-should_b_69609.html

Followed by Charlie Rose's HuffPo article on his interview of Gen. Hayden, which includes two video clips (Rose bumped Valerie so he could interview Hayden):

http://www.huffingtonpost.com/charlie-rose/my-conversation-with-the-_b_69598.html

Valerie is right on - the CIA needs a strong civilian Director that can give independent, un-biased intelligence assessments to the President, and not a Yes-man facilitator marching to the beat of the President's unrestrained Political Policy.

My take-away from the video clips in Rose's article is that Gen. Hayden, and probably all of the Military in general, clearly does not have it in his personality to stand-up to Bush unless he has Legal support - that's just not the way he thinks. Hayden is a 'make it happen' order follower.

That being said, if a Court were to decide that Bush is operating outside the Rule of Law and ordered a remedy (ie - put the Program under FISA/C where it belongs,) then I believe Gen. Hayden would implement the Court's Order.

However, because Gen. Hayden is a Military man, there is every reason to believe he considers Bush's signing statements to carry the force of Law. Until successfully challenged in Court, which means ajudicating the UE Argument, we cannot be certain that Bush isn't using 'secret' Executive Orders and signing statements to 'evade' Court Review of otherwise un-lawful activities - dutifully assisted by Gen. Hayden.

If We could challenge the UE Argument in Court, then at least We could begin to get some important, basic definitions of Power and Authority that could/should/would pro-scribe Bush's exercise of untrammelled Executive Power.

Until then, Hayden has no choice but to operate trying to reconcile two worlds. Under the UE, Gen. Hayden has to serve two Masters - the Rule of Law in public, and Bush's Law/Orders in secret.

[MsAnnaNOLA]

ReaderofTealeaves.

Yes, civilian leaders for the CIA. I think that people also need to crack down on the Pentagon doing intelligence. IE Iraq study group. Remember CIA didn't do the stovepiping really the DOD did under the direction and auspices of Cheney.