Why Qwest Hung Up On NSA

Former Qwest Communications CEO Joseph Nacchio talks to the media out side the federal courthouse in Denver after he was released on $2 million bond on in this Dec. 20, 2005, file photo.
AT&T Corp., Verizon Communications Inc., and BellSouth Corp. began sharing records of tens of millions of their customers' phone calls with the NSA shortly after the 2001 terror attacks, according to USA Today. But when the NSA came calling, former Qwest Communications CEO Joseph Nacchio broke ranks with fellow former Bell companies.

"When he learned that no such authority had been granted and that there was a disinclination on the part of the authorities to use any legal process, including the Special Court which had been established to handle such matters, Mr. Nacchio concluded that these requests violated the privacy requirements of the Telecommications Act," Nacchio's attorney wrote in a statement.

Nacchio agreed with Qwest's attorneys that surrendering its customers' "call-detail records" to the NSA was wrong.

Qwest balked at the request, and pressure, from the NSA, with Nacchio reportedly "deeply troubled" by the implications, USA Today reports. Current CEO Richard Notebaert halted talks with the NSA in 2004 after the two couldn't agree on the details.

According to USA Today, the NSA told Qwest that not sharing the phone records could compromise national security and affect its chances at landing classified contracts with the government, two issues that play a role in Nacchio's own legal woes.

Qwest has been accused of massive fraud by the government and restating $3 billion in revenue. Former executives have been accused of wrongdoing, including Nacchio, who faces 42 counts of insider trading accusing him of illegally selling $101 million in company stock after privately learning Qwest might not meet its financial goals.

Meanwhile, CIA director nominee Gen. Michael Hayden on Friday defended the secret surveillance programs he oversaw while head of the National Security Agency as lawful and designed to "preserve the security and the liberty of the American people."

Hayden's visits to lawmakers on Capitol Hill were complicated by reaction to public disclosure of a NSA program that has been collecting millions of Americans' everyday telephone records.

"Everything that the agency has done has been lawful. It's been briefed to the appropriate members of Congress," Hayden told reporters outside a Senate office. "The only purpose of the agency's activities is to preserve the security and the liberty of the American people.

"And I think we've done that," he said.

The White House stood by Hayden as he spent another day promoting himself in face-to-face sessions with lawmakers, CBS News senior White House correspondent Bill Plante reports. President Bush announced Hayden as his choice to head the CIA on Monday.