Nacchio On Qwest Deals. A congressional committee will question former Qwest chief executive Joe Nacchio as part of its investigation into alleged fraudulent deals between the company and bankrupt Global Crossing.
Nacchio’s attorney, Charles Stillman, confirmed late Thursday that Nacchio has agreed to meet with the House Energy and Commerce Committee next week.
“He looks forward to the opportunity to respond to their questions,” Stillman said through Nacchio’s spokeswoman Marsha Horowitz.
Stillman and Nacchio were unavailable for further comment.
The committee, which asked the Justice Department on Tuesday to begin a criminal investigation into Martha Stewart’s alleged insider trading, is probing deals in which Denver-based Qwest and Global Crossing allegedly swapped network capacity to boost revenue.
Qwest logged $900 million in revenue in 2000 and 2001 from such deals with Global Crossing and other rivals.
The U.S. Securities and Exchange Commission and the Justice Department are also investigating those swaps and the method Qwest used to book other network capacity deals.
In total, deals under investigation accounted for more than $1.5 billion in Qwest revenue from 2000 and 2001.
Qwest announced in July that it plans to restate more than $1 billion in revenue booked from 1999 through 2001.
Nacchio, who supervised all of Qwest’s activities during that time, pocketed $250 million from selling Qwest stock before he was ousted by the board in June.
Qwest is now struggling with $26 billion in debt and a stock price that has plummeted 95 percent from its all-time high. Qwest stock closed at $3.60, up 42 cents, on Thursday.
Former Qwest chief financial officer Robin Szeliga and Global Crossing chairman Gary Winnick also will be interviewed as part of the probe, committee spokesman Ken Johnson told Reuters.
The Denver Post previously reported that Gregory Casey, a top Qwest sales executive from 1997 to 2001, would also be questioned.
Szeliga was replaced as CFO in July and now serves as an executive vice president for Qwest.
Qwest said it is cooperating with the panel’s investigation.
“We continue to cooperate fully with the committee,” Qwest spokesman Bill Myers said Thursday. He declined to comment further.