In Spring and Summer of 2000, as the Qwest takeover of US West unfolded, those of us at USW saw the writing on the wall. Though billed as a merger of equals, the financial realities of the deal meant that Q was going to control the merged company.
Who was going to run things? USW had CEO Solomon Trujillo, a man who had worked his way up through the ranks in the Bell system and, despite his flaws, a guy with some actual vision. Yeah, we were supposed to be stereotypical old-economy, slow-moving monopoly while Q was the agile new economy start-up. They were the shiny new future, we were a relic of a dead past.
But go back and do a little research. Who was the first company to roll out DSL in America? US West. And we were on the verge of deploying VDSL – broadband TV and video – when the merger happened. We had some service problems and we were roundly hated for them, and maybe in another post someday I’ll explain why that rage was based on a fairly dramatic failure to understand the real complexity of the problem. (Hint – if somebody had convinced the Colorado Public Utility Commission to, you know, enforce its own goddamned rules requiring companies offering business services to also offer residential services the problem wouldn’t have existed.)
Long story short – US West was a pretty good company – far better than it was given credit for being – and I had the pleasure of working in one of the absolute best PR units in the world.
Down the street Q had former AT&T exec and future convict Joe Nacchio at the helm. Nacchio had bolted AT&T in a huff when they refused to make him CEO – score one for Ma Bell – and had presided over explosive growth at Qwest. It’s tempting to argue that given the climate at the time and Phil Anschutz’ network of railroad right-of-ways – what a perfect place to lay fiber, huh? – it may not have taken a rocket surgeon to succeed in that role, but let’s not be stingy with credit.
Unfortunately, the deciding vote was going to be cast by Anschutz, and unless something remarkable happened, there was going to be no mystery about that vote at all. So some high-level strategizing concluded that we needed to de-position Nacchio. We need to work the press in such a way that Anschutz felt public pressure to put the steady hand in charge instead of the hot-headed young punk. I was summoned and charged with the task of building the “Joe Must Go” document.
Given who Joe was, this wasn’t the hardest task of my career by a long shot. He had been openly insulting of not only USW leadership – in the press – but had also disparaged the company’s front-line employees. In the press. He was known as an abusive boss and his bullying had been conducted with the sort of public shamelessness that you only see from a man who think’s he’s untouchable. I’m not somebody who’s terribly put off by bravado and attitude, so long as it’s backed by substance. But Joe’s arrogance appalled even me.
All of these things were merely texture and framing. The core issue was far more serious. I built an extended case about the difference between building an empire and running one, giving Nacchio probably more credit than he really deserved for Qwest’s successes to that point, and noted that a certain entrepreneurial swagger was important to the task of building a company out of nothing. However, USW wasn’t that sort of task. It was an established business with 25 million customers in 14 states and almost all of the merged company’s customers and cashflow were ours. The empire had been built – we didn’t need a gunslinger, we needed a steward.
The final document was a tight, compelling 10 pages or so, and it made the case in pretty incontrovertible terms. The document was shopped around to reporters and editors and got some traction, although I’m not sure any of us really expected it to succeed. We had to try, though. Most of us knew we were going to be turfed within the first four seconds after the handover, and while there was plenty of self-interest at work, the truth was that Nacchio was going to be a disaster and good people were going to suffer. This was brutally obvious to everyone with an IQ above 60. Except Phil Anschutz, who had the only opinion that mattered.
I think the last seven years has proved us right, although it has to be said that even we never accused Nacchio of being a felon. We painted Joe as an arrogant, braying ass of the first order. We pointed up his abusiveness and bullying. And we explained how he was purely and simply a bad move organizationally – something AT&T had figured out a few years before. The consensus public opinion surrounding US West’s demise was something to the effect of “ding, dong, the witch is dead,” but I told everyone who’d listen that it wouldn’t be long before they wished they had us back.
Yesterday a jury in Denver convicted Joe of 19 counts of insider trading. While I dare not hope he’ll serve it all, he faces 190 years in prison and $19M in fines. Given the impact his actions had on so many employees at my old company, my only regret is that the possible sentence is so light. At a minimum I’d like to see him die in prison and have every penny in assets seized for distribution to those who lost so much due to his criminal greed. Maybe instead of spending his days in a nice country club prison he should be handed off on a rotating basis to work for those he hosed. That he should forfeit all of the $52M he made off his corrupt dealings goes without saying, and if the judge fails to exact that penalty at sentencing I’ll be back calling for his head, too.
Nacchio. Skilling. Lay. Ebbers. The Rigas. Kozlowski. These men are symptoms of the pathology of our generation. They’re a new, arguably even more arrogant version of Michael Milken, the poster child for Reagan Era corruption and excess, and none will ever get the full measure of the justice he deserves.
I use the term “pathology” for a reason. If boils are breaking out all over a body, a good doctor is going to begin digging for the underlying disease causing the eruption of such odious symptoms. As the Bush years mercifully draw to a close in a whirlwind of scandal, maybe we’re due for a moral check-up.
Categories: American Culture