Nacchio Conviction Overturned; Bloggers Raise FISA-Telcom Immunity Questions

The news media is tripping over itself to rush coverage of today’s surprise federal appeals court decision that ex-Qwest CEO Joe Nacchio should get a new trial.

Lost in the breaking headlines is this more ominous theory — Nacchio’s prosecution for alleged insider-trading was punishment for Qwest’s refusal to take part in the Bush administration’s warrantless wiretapping program under the Foreign Intelligence Surveillance Act (FISA).At Daily Kos, contributing editor mcjoan writes:

Confirming Kagro’s theory that every day without telco amnesty brings yet another potential revelation about how this administration has warped and politicized intelligence-gathering, a new angle has emerged. As reported by Kossack baldheadeddork, the 10th Circuit Court of Appeals has reversed former Qwest CEO Joseph Nacchio’s conviction on insider-trading.

They not only overturned the conviction, but took the highly unusual step of ordering not just a new trial, but a new judge.

The two judges who voted to overturn the conviction cited U.S. District Judge Edward Nottingham’s exclusion of testimony by a defense expert.

“Mr. Nacchio appeals, arguing that the evidence was insufficient to convict him, that the jury was improperly instructed, and that the trial judge incorrectly excluded evidence — expert testimony and classified information — important to his defense,” the decision states.

“We agree that the improper exclusion of his expert witness merits a new trial, but we conclude that the evidence before the District Court was sufficient for the government to try him again without violating the double-jeopardy clause.”

The expert testimony and excluded evidence centers around Nacchio’s claim that Qwest was pressured by the government in early 2001 — months before the attacks of 9/11 — to participate in the warrantless wiretapping of Qwest customers. Qwest is one of the few companies to turn down the NSA’s request. Nacchio attempted to depose witnesses and to present classified information bolstering this claim, but Judge Edward Nottingham denied this line of defense.

The government’s insider-trading case was based on Nacchio’s selling of $52 million of stock in the spring of 2001 when internal documents from Qwest were showing that the company’s finances were shaky. Part of Nacchio’s defense would have included classified information that would bolster Nacchio’s claim that he was upbeat about Qwest’s financial situation because it was about to receive some lucrative, secret government contracts.

“This is a setback, not a defeat,” U.S. Attorney for Colorado Troy Eid said in a statement. “The good news is the Circuit Court said our trial team presented sufficient evidence to convict Mr. Nacchio of insider-trading.”

He added that his office is considering its options “in consultation with the Department of Justice.”

The question is, will this Department of Justice pursue a retrial and a whole new discovery process about the NSA’s warrantless wiretapping scheme — a discovery process they are doing everything in their power to stop by bestowing retroactive amnesty on AT&T and the other telcos that played along.

Emptywheel at FireDogLake brings the point home that the decision could be bad news for the Bush Administration: 

So the Appeals Court has not specifically said Nacchio should be able to tell us about being strong-armed to wiretap Americans (that’s not why they accepted his appeal). But given another trial–not to mention the House’s recent confirmation that different carriers responded to government requests differently (that is, AT&Treason happily wiretapped us, while Qwest resisted)–Nacchio might have the opportunity to explain why he thinks he was retaliated against because he believes in the Fourth Amendment.

Read more:
Colorado Confidential’s coverage of the Nacchio conviction.

Jeralyn Merritt of Talk Left liveblogged parts of the trial.

Read the 10th Circuit Court of Appeal’s decision.

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