This week saw former Qwest Communications CEO Joe Nacchio filing an appeal for his conviction on charges of insider trading. Prosecutors in the case also have requested that he be denied bond. Meanwhile, it's also been reported that Nacchio has been ordered to pay the $19 million fine that was part of his conviction (In a little slice of irony; the fine actually will be deposited in an interest-bearing account while the appeal drags on).
Expect Nacchio's defense to pick over every part of the case in an effort to keep him out of prison and keep his money in his pocket. If eventually Nacchio does go to prison for six years, pays the $19 million fine and forfeits $52 million he gained through insider trading, many people will see it as the fitting end to the final chapter of a long story the telecom industry would rather forget.
After the earlier convictions of former WorldCom chief Bernie Ebbers, former Enron executive Jeffrey Skilling, and Adelphia first family John and Tim Rigas (who both reported to prison this week), the conclusion of Nacchio's case, whenever it comes, may be the last time we see a telecom executive exchange cuff links for hand-cuffs, figuratively speaking, of course. That's the hope of many, at least, but will that be the case, and is the telecom industry a better place for having witnessed their punishment?
Corporate greed and the overwhelming desire to make things look better than they are may have been hallmarks of the last decade, but they were not entirely new discoveries. In fact, these inclinations course through the anatomy of telecom and any other industry as much today as they did five years ago, or 50. New accounting practices may help, but so much still relies on those in the executive ranks not succumbing.
The victims of corporate scandal certainly are no better off, and many of them, as a direct result of the actions of people like Nacchio, lost money they may need one day, but will never make back.
We are seeing a changing of the old executive guard in telecom, and more new faces at the heads of telecom companies than at anytime in recent memory. The new executives in many cases bring experience and ideas to drive and manage a rapidly changing industry, but as much as we want to give them the benefit of the doubt, only time will tell if they are any better than Joe Nacchio at fighting temptation. - Dan