Qwest Communications , acknowledged Tuesday the U.S.
Attorney’s office in Denver had started a criminal investigation, though
the reason for the probe wasn’t given.
As with past investigations, Qwest officials said they would “fully
cooperate” with any Denver office requests for information.
Jeff Dorschner, spokesperson for the Denver office of the Colorado U.S.
Attorney’s office, said it could only confirm an investigation was underway.
“I can’t speculate on a time frame (for details),” he said. “It’s normally
the case that we don’t even confirm or deny the existence of a criminal
investigation.”
It’s likely Qwest came forth with the criminal investigation only because
of recent events. Qwest officials derided a report in the Wall Street
Journal last week that said the company was under criminal investigation,
saying it was “outrageous” Qwest would find out through the media.
“We have disclosed everything asked of us and have cooperated fully with
the Securities & Exchange Commission (SEC) and Congress,” said Drake
Tempest, Qwest general counsel.
The Denver-based incumbent local exchange carrier (ILEC) has been under
mounting pressure from both the legal and financial community to disclose
the full extent of its financial arrangements.
The Bell has spent the last month changing out its senior management to
conduct a significant overhaul in the way it does business, starting last
month with Joseph Nacchio, Qwest’s outspoken chairman and chief executive
officer.
Richard Notebaert, incoming chairman and chief executive officer, quickly
retooled the company and installed trusted advisors from his days as
Ameritech’s boss.
The company’s dealings during Nacchio’s reign are the subject of intense
scrutiny in the wake of the Enron and Global Crossing scandals. Global
Crossing and Qwest reportedly dealt
heavily in “swapping,” a term used to describe buying bandwidth from
one carrier and selling the same amount back, a legal method that lets both
carriers record the transaction as revenue.
The transactions fell under Qwest’s wholesale division, an area analysts
expect might get sold off to shore up revenues.
Qwest officials declined to elaborate on future plans.
