ACC officials say Qwest charges not surprising - East Valley Tribune: Business

ACC officials say Qwest charges not surprising

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Posted: Tuesday, February 25, 2003 10:17 pm | Updated: 2:20 pm, Thu Oct 6, 2011.

Arizona Corporation Commissioners said they were troubled by the news Tuesday that the government had filed criminal and civil fraud charges against former and current executives of Qwest Communications International.

“I've been concerned about Qwest's behavior for a long time,” said Commissioner Bill Mundell. “What concerns me the most about the current allegations are that, not only are past employees accused of fraud, but also current employees . . . are involved in allegations of fraud. So I'm greatly troubled by that.”

Four former top executives of Qwest, have been charged with falsely booking nearly $33.6 million in revenue from a technology contract with the state School Facilities Board in the company's June 30, 2001, financial statements filed with the Securities and Exchange Commission.

Commission Chairman Marc Spitzer said Qwest is another example of a company that “undermines our faith in the whole system.”

“It's disconcerting to have bad financial statements among this sector of the economy,” he said. “That's troubling from a regulated perspective, as well as somebody who likes the capitalist system, which is breaking down because of this fraud. Hopefully justice will be served, however it proceeds.”

Qwest, which dominates the local telephone market in Arizona and is the nation’s fourth-largest local phone company, wants to get into the long-distance business. The commission regulates Qwest, Arizona Public Service, Southwest Gas and other utilities and sets their prices.

“We have taken a go-slow approach (with Qwest) at the commission, and I think we're one of only two states that have not approved Qwest's application to sell a long-distance service throughout their region,” Mundell said.

The commission will continue that approach and closely monitor developments at the Securities and Exchange Commission and the U.S. Department of Justice, he said. The allegation that current employees are involved in fraud would suggest that Qwest “hasn't totally cleaned out” he said.

“So much for the new Qwest,” Mundell added.

Jeff Mirasola, Qwest's public relations spokesman for Arizona, said the utility's employees adhere to the “highest ethical standards.”

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