A federal judge is likely to accept the government’s move to protect national-security information from disclosure in a civil fraud case against former Qwest executives, experts say.
By invoking the state-secrets privilege to prevent release of information that could cause “exceptionally grave harm to national security,” the Bush administration is relying on a provision that was once seldom used but has been asserted more frequently in recent years.
“It’s probably the most powerful privilege the government has,” former federal prosecutor Rick Kornfeld said. “The problem with challenging it is . . . it’s hard to argue with the government that something is not essential to national security.”
The privilege has been rejected four times since it was first used in 1953, according to William Weaver, a University of Texas at El Paso professor who studies the matter.
The government used the provision a reported 65 times from 1953 to 2000. Since 2001, the privilege has been invoked more than 30 times, according to Weaver. It has typically been used in civil cases in which the government is the defendant.
In the Qwest case, the government is the plaintiff and former Qwest chief executive Joe Nacchio and four other former company officials are defendants.
On Tuesday, an attorney for one of the defendants vowed to fight the government’s efforts to limit his client’s discovery.
“If they’re seeking to prohibit us from gaining access to discovery that’s relevant to our case, we will fight and fight hard to gain access to it,” said Kevin Evans, who represents former Qwest accountant James Kozlowski.
Nacchio, Kozlowski, former Qwest president Afshin Mohebbi and former chief financial officer Robert Woodruff intend to seek information about classified and potential contracts with intelligence agencies as part of their defense, according to documents filed by the government this week.
They, along with former accountant Frank Noyes, are accused by the Securities and Exchange Commission of fraudulently booking $3 billion in revenue from 1999 to 2002. Qwest later restated much of that revenue, which largely came from questionable sales of capacity on the Denver-based company’s fiber-optic communications network.
Court filings show the defendants planned to ask the government about its acquisition of fiber-optic capacity from Qwest, which owned a state- of-the-art fiber network.
The SEC alleges in its suit that the former Qwest officials purchased international capacity that the company didn’t need to complete “swaps” with other carriers. Regulators have said such swaps had no legitimate business purpose and were completed solely to boost revenue for the companies involved.
Evans indicated part of his defense was to show that the company purchased capacity on international routes, in part because it “expected contracts would be forthcoming based upon previous relationships that Qwest had with the government.”
If Evans is unable to present that defense, he can claim that his client’s constitutional right to a fair trial has been violated and ask the judge to toss the case, experts say.
In a court filing Monday, Director of National Intelligence Michael McConnell said disclosure of information sought by the defendants during discovery could “cause damage to the foreign relations and the national defense of the United States.”
