Colorado Proposes Tough Law on Executive Accountability
Key Excerpts from Article on Website of New York Times
Posted: April 3rd, 2008
For 30 years, Lew Ellingson loved being a telephone man. His job splicing phone cables was one that he says gave him a true sense of accomplishment, first for Northwestern Bell, then US West and finally Qwest Communications International. But by the time Mr. Ellingson retired from Qwest last year at 52, he had grown angry. An insider trading scandal had damaged the companys reputation, and the life savings of former colleagues had evaporated in the face of Qwests stock troubles. It was a good place, he said wistfully. And then something like this happened. Now, Mr. Ellingson is the public face of a proposed ballot measure in Colorado that seeks to create what supporters hope will be the nations toughest corporate fraud law. Buttressed by local advocacy groups and criticized by a Colorado business organization, the measure would make business executives criminally responsible if their companies run afoul of the law. It would also permit any Colorado resident to sue the executives under such circumstances. Proceeds from successful suits would go to the state. If passed by voters in November, the proposal would leave top business officers [with] unprecedented individual accountability, said Mr. Ellingson. If nothing else, these folks in charge of the corporations and companies will think twice about cutting corners to make themselves look more profitable than they really are, he said. The plight of Mr. Ellingsons former employer, Qwest, based in Denver, was a motivation for the proposal. Last April, a jury in Denver convicted Qwests former chief executive, Joseph P. Nacchio, of 19 of 42 counts of insider trading. Mr. Nacchio was sentenced to six years in prison and ordered to pay a fine of $19 million and forfeit $52 million in money he earned from stock sales in 2001.
Note: As reported in the Washington Post, Joseph P. Nacchio, the former Qwest CEO, has claimed that he was singled out for prosecution because he refused to cooperate with the National Security Agency's electronic surveillance of American citizens, which began before 9/11.