It just keeps getting worse. Last week, court documents unveiled as part of the appeal of former Qwest Communications CEO and convicted inside-trader Joe Nacchio indicate that the feds may have retaliated against the telco by denying it lucrative contracts because it wouldn’t accede to the National Security Agency's requests to illegally turn over phone records — months before the Sept. 11 terrorist attacks.

If Nacchio is to be believed, the NSA asked telcos to turn over customer records long before Sept.11. Although other carriers acquiesced; Qwest refused because the company feared the request was illegal. (Hm, d’ya think?) According to Nacchio, the refusal meant Qwest didn’t land some contracts with the NSA that it had been expecting. Had Qwest gotten the work, its stock might have held up better, and Nacchio’s stock sales might not have appeared so suspicious.

Oh yeah — and all this allegedly happened in February 2001, which would be eight months before Sept. 11.
It's always risky to accept mitigating evidence from a convicted criminal at face value. And this argument’s more than a little convoluted: If Nacchio knew he would tick off the NSA by refusing to participate in the illegal actions, why did he seriously expect to get the deals anyway? Either he’s criminally stupid, or just criminal.

But forget that. The real issue here is how completely and utterly untrustworthy the feds seem to be. First the NSA allegedly requests illegal wiretaps. Now it allegedly punishes phone companies that won’t play ball by withholding business. And best of all — this all happens eight months before there was any known reason to take drastic measures.

Meanwhile, the White House continues to make no comment, other than to insist that compromising civil liberties is required to protect against the threat of terrorism.

I hate to be the one to point out the emperor’s new clothes, but if that’s the argument — it’s fatally flawed. Any wiretaps that went into place in February 2001 rather notably failed to halt the terrorist attacks in September. So at the risk of being branded “unpatriotic,” I have to say the wiretaps were neither necessary nor effective at stopping terrorism.

So where does that leave us? Well, here’s the thing. There’s currently a wellspring of sentiment against the carriers for failing to stand up to the NSA’s requests. I can understand that: I’ve got a long and proud legacy of bashing the carriers whenever they deserve it — which is most of the time. And I certainly don’t think the carriers acquitted themselves well here.
But we need to stop and consider: Telcos are in business to, er, conduct business. A public company is ultimately responsible primarily to its shareholders, and secondarily to everyone else.