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Hero Joseph Nacchio Is Released from Jail


From the standpoint of government officials, one of the greatest things about a highly regulated economy, banking system, and healthcare system, as well as a complex tax system, is that it provides officials with the ability to prosecute businessmen, bankers, physicians, and others whenever they get out of line. In that way, officials can claim that they’re not going after people for criticizing the government or for challenging the system but instead for real criminal offenses.

You see this especially in Russia, where businessmen who are accumulating vast amounts of wealth are, by and large, left alone so long as they’re not making waves. But the minute they get involved in political activity that challenges the Putin political machine, the government goes after them with a vengeance for violating economic or tax regulations.

The thing to realize about this type of system is that it is impossible for people to be in compliance with all the regulations and tax provisions. The system is too complex. Thus, anytime the government wants to get someone, they just have to examine his activities for the past year or so. They can always find some violation of some regulation or tax provision.

Think about U.S. bank regulations and regulators. Banking regulators periodically pop in on banks and conduct inspections. It is the rare bank that is 100 percent in compliance. The regulator can always find something, which is why many bank officials behave in a totally sycophantic manner when the bank regulators show up.

U.S. statists, especially conservatives, have convinced themselves that the United States system is different from the Russian system. They hold that America’s system is “exceptional.” Actually, it used to be. Back in the 19th century, when the United States had an economic system (and healthcare and banking systems) that was, by and large, free of government control. That is what Americans once meant as “free enterprise”—enterprise that is free of government control and regulation. That, indeed, was an exceptional system because everyone else’s system was subject to government control and regulation.

But today America’s system is no different, in principle, from Russia’s system. U.S. officials do the same thing to American businessmen who get out of line that Russian officials do when some Russian businessman gets out of line. They start looking for some economic regulation or tax provision that the recalcitrant or independent businessman has inevitably committed, and they easily find it.

One of the best examples of this involves Joseph Nacchio, the former head of Qwest, a telecommunications company. In 2001, he was approached by the NSA and asked to engage in illegal activity by secretly delivering his customer’s records to the NSA. To his everlasting credit, Nacchio said no, not only because it was a felony offense to do so but also because he believed his loyalty was to his customers, not to the NSA.

The problem, however, is that the NSA looked at Nacchio the same way it looks at Edward Snowden — as a no-good traitor who wouldn’t defer to the supreme authority of the national-security state. After all, the other telecoms were going along with the illegal surveillance scheme. Why couldn’t Nacchio?

But since they were asking Nacchio to commit a felony, they couldn’t exactly go after him for saying no. So, first they began punishing him for his recalcitrance by reducing federal contracts with Qwest. And then they proceeded to do what Putin does to Russian businesses who don’t play ball with the Russian government. They began looking for violations of economic regulations and tax provisions that they go could after him on. They finally found a violation of insider trader laws, which is one of the most ridiculous economic crimes in the books.

With much gravitas, they indicted Nacchio, alleging that he had done something gravely wrong. Needless to say, the federal judiciary, which has long been notorious in its deference to the national security state, would not permit Nacchio to show the jury the real reason he was being prosecuted. He was convicted and sentenced to serve 70 months in jail.

This week, Nacchio was finally released from jail. What’s nice is that he is totally unrepentant. And so he should be because he didn’t do anything wrong. It was the NSA, the federal prosecutors, the federal judiciary, and the federal government who were — and are — the wrongdoers.

Here’s an interesting article about Nacchio’s prosecution, written back in 2007 by Scott Horton in Harper’s: https://harpers.org/blog/2007/10/qwest-another-political-prosecution

For articles I have written about Nacchio in the past, see:

LBJ and Media Complicity with Iraq by Jacob G. Hornberger (March 2013)
No Moral Standing to Criticize Putin by Jacob G. Hornberger (December 2012)
Economic Crimes in China and the U.S. by Jacob  G. Hornberger (April 2011)
Wikileaks, Amazon, Paypal, and MasterCard by Jacob G. Hornberger (December 2010)
Barack Obama, Dictator by Jacob G. Hornberger (June 2010)
The Value of Government Surveillance of Citizens by Jacob G. Hornberger (January 2010)
Free Mark Cuban and Abolish the SEC by Jacob G. Hornberger (November 2008)

When a government is going after honest and principled people like Joseph Nacchio, Edward Snowden, Bradley (Chelsea) Manning, Daniel Ellsberg, and others for refusing to go along with government wrongdoing and using ridiculous economic or tax crimes to do it, what better evidence that something is seriously amiss in that society?



This post was written by:

Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education. He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News’ Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano’s show Freedom Watch. View these interviews at LewRockwell.com and from Full Context. Send him email.