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Qwest Punished by NSA for Non-Cooperation 170

Posted by Zonk from the tit-for-tat dept.
nightcats writes "According to a story from the Rocky Mountain news, Qwest has received retaliatory action from the NSA for refusing to cooperate in the Bush administration's domestic data-mining activity (i.e., spying on Americans). 'The [just-released government] documents indicate that likely would have been at the heart of former CEO Joe Nacchio's so-called "classified information" defense at his insider trading trial, had he been allowed to present it. The secret contracts - worth hundreds of millions of dollars - made Nacchio optimistic about Qwest's future, even as his staff was warning him the company might not make its numbers, Nacchio's defense attorneys have maintained. But Nacchio didn't present that argument at trial. '"
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Qwest Punished by NSA for Non-Cooperation More

Qwest Punished by NSA for Non-Cooperation

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  • Nonsense (Score:5, Informative)

    by DerekLyons ( 302214 ) <fairwater@gmGINSBERGail.com minus poet> on Thursday October 11, 2007 @03:02PM (#20944819) Homepage
    The linked article does not support the sensationalist nonsense presented in the summary.

    • Re:Nonsense (Score:5, Insightful)

      by clodney ( 778910 ) on Thursday October 11, 2007 @03:09PM (#20944927)
      I admit the summary is inflammatory, but strip away the hyperbole and the implication is there.

      Nacchio is claiming that he expected to receive classified government contracts that would have prevented the revenue shortfall, and that therefore he was not guilty of insider trading because he believed the revenue forecasts to be accurate.

      Nacchio is clearly not a disinterested party to this, so his assertions have to be examined carefully, but it is at least plausible that after Qwest declined to give the NSA access to their network, NSA decided to give the contract to someone else in retaliation.

      I haven't followed the story closely enough to pretend to have an informed opinion on the merits of the argument. Of course, this is /., so I guess that doesn't matter here.

      • Re:Nonsense (Score:5, Insightful)

        by complexmath ( 449417 ) * on Thursday October 11, 2007 @03:32PM (#20945315)
        Nacchio is clearly not a disinterested party to this, so his assertions have to be examined carefully, but it is at least plausible that after Qwest declined to give the NSA access to their network, NSA decided to give the contract to someone else in retaliation.

        This was my interpretation as well. Basically, the government was using lucrative contracts as an incentive for cooperation with various other less palatable projects. When Qwest declined to cooperate with those, the government pulled their other contracts and gave them to someone else who was presumably more willing to cooperate. Given this, I think a case could be made for the mis-estimation of future income by Qwest. Depending on where they were in negotiations, etc, it's reasonable to assume that there was grounds for considering these contracts as valid future revenue.
        • Like so many in this thread - you can't tell the difference between an assumption and a fact. That Qwest was being punished is spin, an assumption. It is not a fact. Correlation is not causation.

          • Re:Nonsense (Score:4, Informative)

            by visualight ( 468005 ) on Thursday October 11, 2007 @06:03PM (#20947235) Homepage
            However, the article does support the allegations made in the summary. Also, when you're talking about physics, or genetic defects then of course correlation is not causation.
            But when you're talking about people correlation is often causation. Especially when you're talking about people who've already demonstrated a lack of ethics. In this case I have no doubt that retaliation was the motive for pulling the contracts.

            • Re: (Score:2)

              by delong ( 125205 )
              However, the article does support the allegations made in the summary

              It only supports the allegations if you make unwarranted assumptions. There's nothing in the article that supports the allegations but the CEO's own allegations.
          • In fact, it could be cover for the fact that since Qwest did
            not cooperate, and Redmond is in that territory, that future
            events hatched in Redmond will not be linked.

          • I believe I used the term "assume" explicitly a number of times in my post. I can't say I understand the point in replying to a comment one hasn't even read.

        • Re: (Score:2)

          by delong ( 125205 )
          it's reasonable to assume that there was grounds for considering these contracts as valid future revenue

          Really? Qwest's accountants are considering non-existent contracts as future earnings for financial statements? The SEC will be happy to know that, why don't you suggest that over there?
          • It sounds like you know more about this aspect of financial reporting than I do. Are you saying that it's illegal for a future earnings report to include income from pending client contracts? And how does this differ from projected sales earnings?

        • Re: (Score:2)

          by webweave ( 94683 )
          It looks like the only telcom that refused to hand over wire tap information without a FISA order is going to jail while at the same time Bush fights for immunity for the telcos that went along with the white house and committed the crimes.

          No it's worse, this occurred before 9/11 which makes the white house claim of breaking the law to fight 9/11 terrorism a lie.

          It's a good thing Bush has expanded the use of making things secret or else we might have enough evidence to impeach.

          • What occurred before 9/11.

            It isn't the bush bashing that gets me, it is all the changing accusations that when they don't work seem to get dates changes and so on in order to inflame people. So seriously, what are you claiming happened before 9/11. And please be nice with some creditably links.
      • Certainly the implication is there, but the article and the summary presuppose it as a fact. Facts and implications are not the same thing.

        • Re:Nonsense (Score:4, Insightful)

          by mabhatter654 ( 561290 ) on Thursday October 11, 2007 @04:13PM (#20945909)
          It is a fact that he had meetings discussing contracts with the NSA, the details are redacted but the meeting is there. The fact that the judge won't allow the redacted information in the trial is somewhat disturbing as they prove he didn't have intent to defraud investors. Along the same line, the nature of such contracts means that investor notification may not be entirely possible or even legal. If he said he would probably make numbers dependent on pending government work he should be in the clear. Numbers are just that, numbers, they have risk.. greater when working for secret agencies as Quest is an order of magnitude smaller than Verizon or AT&T.

          • Re: (Score:3, Insightful)

            by terrymr ( 316118 )
            I'm curious why the judge didn't allow him the argue this at trial - maybe the NSA visited the judge too.

            • Re: (Score:2)

              by Knara ( 9377 )

              The implication seemed to be that somewhere along the like the gubment pulled the "state secrets" card out of their deck, again.

              They sure do seem to have a lot of those. Isn't there some sort of tournament rule about having your deck be all one card?

              • Re: (Score:2)

                by terrymr ( 316118 )
                That was what I was thinking too ... it's amazing what you can use that state secrets card for isn't it ?

                So If you sue the government - they win because they play the state secrets card.

                The government comes after you - they play the state secrets card and win.
          • You don't know if the information was redacted prior to the judge seeing it or not. Like so many in this thread you can't tell the difference between an assumption and a fact.
          • The article doesn't actually say that the judge would not allow the redacted information. The article says that the documents "suggest" that the Judge refused to allow him to present the argument that there was retaliation. In addition, the Judge was going to require him to take the stand if he wanted to use the "classified defense". This sounds to me as if the judge was saying that if Nacchio wanted to claim as his defense that he thought things were better than his staff thought because of classified info
        • "According to a story...indicate that likely would have been..."

          "...documents released Wednesday suggest."

          Reading comprehension FTW.
      • This is such BS. The SEC [wikipedia.org] is a non-political independent regulatory agency [wikipedia.org] outside of the executive branch! Bush couldn't order them to flush a toilet, let alone initiate an investigation.

        But hey, it's an anti-Bush allegation, so let's greenlight it!

        • Re: (Score:2)

          by rthille ( 8526 )
          Right. From your link:
            Executive branch independent agencies are not part of a fourth branch of government; they are part of the executive branch

          And they list the CIA as an example Independent Agency. The President certainly has the authority to order the CIA around.
          • The link is wrong, typical Wiki. There are two types of regulatory agencies. Executive, and independent. The FTC (the non-political analogue to Justice) and the SEC are independent. The CIA is part of homeland security, part of the executive branch. CIA is not independent and it is not regulatory. The CIA director serves at the pleasure of the president. The SEC chairman does NOT serve at the pleasure of the president. Cox could tell Bush to fark off and Bush couldn't do a thing.

            The SEC consists of five p

            • Re: (Score:2)

              by rthille ( 8526 )
              So, with 5 year terms, bush has had the opportunity to appoint every member of the commission. And while two members must not be republicans like the other three, there are certainly Democrats like Zell Miller who are to the right of many Republicans.

              Nothing involving people is apolitical. Everyone brings their viewpoint and interpretation to the job.

              I have no idea whether Bush was involved in any of this, but to say that it's impossible is naive.

              Even if Bush couldn't fire Cox directly, to say that crossi

        • Re: (Score:2)

          by rthille ( 8526 )
          And if you clickthru the SEC link on that page you get this:
          Christopher Cox is the current chairman of the SEC. He was appointed by President George W. Bush.

          Right. Non-political. Sure. Like the Justice Department.
        • I think there is a misunderstanding between various slashdotters as to how exactly QWest was allegedly "punished." As far as I can tell, TFA is not stating that QWest was punished for not cooperating with the NSA by having an SEC investigation launched against it's former CEO. They are stating that QWest was punished for not cooperating with the NSA by losing potential contracts they had lined up with "The National Security Agency and other government agencies" - the SEC is never mentioned as an agency wi
        • Dude. The SEC is a US Government Agency whose commissioners are appointed by the US President(subject to the senate rubber stamp).

          See http://www.sec.gov/about/commissioner.shtml [sec.gov]

          Much like the FTC, the SEC can and will refuse to investigate or take action on politically sensitive.

          Bush could appoint a commissioner who could not only flush his toilet but clean it with a tooth brush and more...
           

        • Re: (Score:2)

          by tchdab1 ( 164848 )
          If you've kept your eyes open for the past 6 years you will know that this administration has been unprecedented in its work to politicize "non-political" government agencies.
          The US Attorneys issue is pretty well-known. Here is a regulatory body that supposedly depends on its objectivism to enforce the law throughout the USA, yet was systematically purged of members who did not prosecute or avoid prosecution when told by political operatives, in many states.

          White House political operatives - Rove and his st

    • Re: (Score:2, Funny)

      by singingjim1 ( 1070652 )
      SONOFA! I was going to say that and would therefore have had my first positively moderated post! Oh well. Fuck it. Back under the bridge for me.

    • Re:Nonsense (Score:5, Insightful)

      by Anonymous Coward on Thursday October 11, 2007 @03:13PM (#20944993)
      Did you bother reading the PDF court filings which are listed on the article page?

      It appears that (if Nacchio was telling the truth) the NSA offered projects worth a significant amount of money to Qwest -- then, when Nacchio refused a separate NSA request on the grounds that the request was illegal, the NSA withdrew the other projects.

      If this isn't punishing Qwest for non-cooperation, what is?

      • It appears that (if Nacchio was telling the truth) the NSA offered projects worth a significant amount of money to Qwest

        And we have no way of knowing if the other big telcomm companies got similiar offers.
         
         

        If this isn't punishing Qwest for non-cooperation, what is?

        It's an assumption based on the testimony of someone with a pretty big agenda item (avoiding prison). It is not a fact.

    • Re:Nonsense (Score:5, Informative)

      by gstoddart ( 321705 ) on Thursday October 11, 2007 @03:19PM (#20945099) Homepage

      The National Security Agency and other government agencies retaliated against Qwest because the Denver telco refused to go along with a phone spying program, documents released Wednesday suggest.

      Well, the opening paragraph of the linked article indicates that they thought it did mean that.

      Although, I don't think it's the domestic spying program that's been in the news. The article seems to infer that he had refused to participate in some unnamed program (which predated 9/11) which he said would be "was both inappropriate and illegal".

      I think the summary seems valid (as it's largely direct quotes from the article).

      It seems to be the article which is drawing the conclusion that there was some secret/illegal program (possibly a precursor to the current one) involving the phone system, and that Nacchio's refusal to go along with it.

      If I understand it, they're saying that had he been able to cite these secret contracts with the government as to why he thought they'd do well (but couldn't release the info to shareholders) he might have had a defense against his insider trading clauses -- because he would have been prohibited by law from divulging them.

      Now, as to how much you can attribute the actions of the NSA et all to retaliation for not participating in the now infamous domestic spying program -- that seems like speculation in the article. It seems like the summary is merely conflating "a" phone spying program with "the" phone spying program. The poster of the article doesn't seem to have so much sensationalized, as slightly mis-interpreted.

      Cheers
      • No, both the article and summary make the mistake of treating an implication as a fact.

        • Re:Nonsense (Score:4, Informative)

          by gstoddart ( 321705 ) on Thursday October 11, 2007 @04:05PM (#20945815) Homepage

          No, both the article and summary make the mistake of treating an implication as a fact.

          No, the summary correctly says "According to a story from the Rocky Mountain news ...". The poster of the article adroitly sidesteps any personal claim that any of this is actually fact.

          Now, as to how much of the things implied in the actual article can actually be considered fact, that's an entirely different matter. Some of the argument seems a little specious and vague to me. They're conclusions drawn by someone who has read a document I've never seen. It's not even really clear on who drew the conclusions.

          I'm defending neither the article, nor its conclusions. But, I will say that I don't think that the person who posted the summary made it any more sensationalist than the actual article was, give or take a slight mis-interpretation of which (alleged) illegal spying program was at issue here. The summary merely treats it as fact that the Rocky Mountain news did, in fact, make assertions which are in line with the summary. Having RTFA, I can only determine that the poster didn't draw his own sensationalist conclusion, he slightly botched someone else's sensational conclusions.

          All other aspects about the truthiness of the article are outside of the scope of anything I've said or plan to say, since it's all hearsay by the time we read it. :-P

          Cheers

    • Re: (Score:2, Informative)

      by Anonymous Coward
      Why is the parent post modded 5, Informative when it states the opposite of the verifiable truth?

      Check the article yourself if you doubt it. Look at the sidebar "RELATED LINKS" and click on the "CIPA 9" objection. It's a poorly scanned black-and-white document, but you can see a redacted section on the first page. This presumably mentions the NSA's illegal request. After that, you can read, "the agency retaliated for this refusal by denying the Groundbreaker and perhaps other work to Qwest."

      Other people

      • Re:Nonsense (Score:4, Insightful)

        by mabhatter654 ( 561290 ) on Thursday October 11, 2007 @04:24PM (#20946105)
        but that retaliation messed up his numbers while he was telling investors big deals were almost done... oops now it went south, the check wasn't in the mail... and he can't talk about it because it's secret. Now he's charged with a crime for not talking about it when the stock did poorly without those contracts. One could almost argue that the prosecutor had cherry picked that time frame knowing he couldn't use the facts to defend himself.

    • Re: (Score:3, Insightful)

      by PopeRatzo ( 965947 ) *

      The linked article does not support the sensationalist nonsense presented in the summary.

      Actually, the assertion that Qwest was punished by the Bush Administration for refusing to let their facilities used for illegal wiretapping is certainly supported by the article.

      If said wiretapping activities weren't illegal as Qwest (and most Americans) believe, then why is Bush asking Congress to give the telcos immunity from prosecution?

      There's absolutely no reason that a warrant couldn't be obtained for each and

    • The linked article does not support the sensationalist nonsense presented in the summary.
      You must be new here.

  • While story !=summary, it's onerous (Score:5, Insightful)

    by postbigbang ( 761081 ) on Thursday October 11, 2007 @03:11PM (#20944959)
    If you RTFA, the implications are there. Play ball with the NSA, and life could go better with you. Cross-connect your new fiber infrastructure with the NSA and get nice secret benefits. Don't do it, and watch yourself go down, hard, at the hands of the non-secret branches of government.

    Good conspiracy stuff. Kennebunkport and B-52s, anyone?

    • Re: (Score:3, Insightful)

      by Kenrod ( 188428 )
      The implication is coming from a guy trying to save his own ass - alleging something that the govt will not and can not acknowledge or deny. Clever and slimy.

  • huh? (Score:4, Funny)

    by jdc180 ( 125863 ) on Thursday October 11, 2007 @03:13PM (#20944995)
    'The [just-released government] documents indicate that likely would have been at the heart of former CEO Joe Nacchio's so-called "classified information" defense at his insider trading trial, had he been allowed to present it. The secret contracts - worth hundreds of millions of dollars - made Nacchio optimistic about Qwest's future, even as his staff was warning him the company might not make its numbers, Nacchio's defense attorneys have maintained. But Nacchio didn't present that argument at trial. '"

    What? That didn't make any sense in the summary, or in TFA. I didn't bring my bad grammar decoder ring to work today, can someone translate?

    • Re:huh? (Score:5, Funny)

      by tonyreadsnews ( 1134939 ) on Thursday October 11, 2007 @03:14PM (#20945019)
      because the NSA stripped out the impo
    • The mother wolf kills the calf, and the blood drips down, feeding the children. It's a very long explanation...
    • As far as I could tell (the article wasn't really clear), the issue was that he wasn't allowed to make the argument at trial so he didn't.

    • According to Nacchio, he was expecting to get some secret government contracts which would have allowed Qwest to make its sales projections. This he would not have been lying when, 8 months (or something like that) before the Qwest debacle, he sold (dumped?) a bunch of stock.

      He's probably right in that he was prosecuted because he turned up his nose at the NSA. If he hadn't the justice department probably would have looked away from his "little transgressions".

    • Re:huh? (Score:5, Informative)

      by gstoddart ( 321705 ) on Thursday October 11, 2007 @03:36PM (#20945369) Homepage

      What? That didn't make any sense in the summary, or in TFA. I didn't bring my bad grammar decoder ring to work today, can someone translate?

      The assertion is that when he was CEO he had been told by the government he would be getting big, huge contracts. He used that as a basis to express positive earnings potential. When he declined to participate in a program he felt would have been illegal, they pulled those contracts.

      They seem to be implying that, had he been allowed to at is insider trading trial, he would have referenced said contracts in his defense. But, he was prevented, possibly by the government or the judge. They refer to a heavily redacted document to support the belief that he wasn't doing anything illegal, but legitimately had a reason to believe the company had good things coming in the future, and therefore wasn't doing illegal insider trading. (ie. There really was a secret program he was being courted to help with, after he refused, they hung him out to dry).

      Another implication, is that before 9/11, the White House was looking at implementing a program involving phones, and the NSA, and that the individual in question felt that it would have been illegal. By inference, this is related to the now well-known but not acknowledged (but still illegal) domestic spying program. There's little evidence offered to support this link.

      At least, that's my best understanding of it.

      Cheers

  • Domestic spying (Score:2, Insightful)

    by CaptCrunk ( 859386 )
    I realize that this is a sensitive issue, but why would it be assumed that this is "spying on Americans"? Given this kind of access, it's possible that it could occur, but given that the American telecom industry tends to have faster communications lines than those in countries known to harbor these groups, it's just as possible that they're monitoring those calls. It's a matter of call routing and the most efficient way to get from point A to point B. Just my $0.02.

    • Re: (Score:3, Informative)

      by Boronx ( 228853 )
      Because spying on foreigners without a warrant is not illegal, and these guys were doing something illegal (hence the desire by the telecoms to get their actions retroactively legalized, without first telling us what they are)

      • Re: (Score:2)

        by delong ( 125205 )
        Because spying on foreigners without a warrant is not illegal, and these guys were doing something illegal

        Analyzing data, like calling patterns, in which you have no reasonable expectation of privacy requires no warrant either. Like pen registers, the government does not need a warrant for this type of monitoring.

        Telcos need immunity to prevent frivolous strike suits by people like you that think "these guys were doing something illegal."

        • Re: (Score:3, Interesting)

          by Boronx ( 228853 )
          No, they don't. If what they're doing isn't illegal, then they don't need immunity for it. Or to put it another way, giving someone immunity for something that is legal won't do anything to stop frivolous law suits.

          BTW, what makes you think that call patterns don't fall under a "reasonable expectation of privacy"? I'm guessing you and those like you who love to give the government the benefit of the doubt are in a distinct minority.

          • Re: (Score:2)

            by delong ( 125205 )
            Or to put it another way, giving someone immunity for something that is legal won't do anything to stop frivolous law suits

            Immunity allows the defendant telcos to get an immediate dismissal of the suit on a motion to dismiss. One filing, a hearing, and the suit is out the door, saving millions defending frivolous lawsuits.

            BTW, what makes you think that call patterns don't fall under a "reasonable expectation of privacy"?

            The Supreme Court of the United States says so.

            I'm guessing you and those like you who

            • Re: (Score:2)

              by Boronx ( 228853 )
              You are correct. I find that decision disheartening:

              "We doubt that people in general entertain any actual expectation of privacy in the numbers they dial," Justice Harry Blackmun wrote. He noted the court had said "a person has no legitimate expectation of privacy in information he voluntarily turns over to third parties."

              That is IMHO an incorrect reading of American's expectations, and the foundation of the quote is dangerous: In the age of digital transmission, the entire phone conversation is turned ove
    • 1. The system in question is for monitoring phone calls, and could be used on either foreign calls (legal) or domestic calls (illegal).
      2. If what is being done is not illegal, there would be no need to try and grant the telcom companies retroactive immunity for their non-crimes.
      3. Since the Bush administration is trying to push retroactive immunity, what is being done is illegal, i.e. spying on Americans.

      Moreover, attempts to hide illegal activity of this type would be consistent with Bush administrati

  • Wait, WHEN did this happen? (Score:5, Insightful)

    by BobMcD ( 601576 ) on Thursday October 11, 2007 @03:24PM (#20945193)
    I obviously need to do some research:

    Nacchio planned to demonstrate at trial that he had a meeting on Feb. 27, 2001, at NSA headquarters at Fort Meade, Md., to discuss a $100 million project. According to the documents, another topic also was discussed at that meeting, one with which Nacchio refused to comply.
    The NSA wanted to begin its wiretapping program PRIOR to the "unforeseeable" events of September 11th, 2001???

    Either I'm out of touch, or this is a tad bit of a smoking gun...

    Next up for me is trying to determine when the guys who went along got their start. Either way it doesn't look good.

    Interesting stuff.

  • Not so fast... (Score:4, Interesting)

    by Penguinisto ( 415985 ) on Thursday October 11, 2007 @03:30PM (#20945289) Journal
    When it comes to Qwest, you may wish to take the information with a block of salt. They've been known to twist things rather heavily before in order to get their way (for a big instance - a quick Google search for "Qwest UTOPIA Utah" should cough up their antics in trying to kill off a muni-funded fiber broadband project just to keep their profits high).

    IMHO, Qwest's motives are suspect, and this article with its sensationalist flavor reads almost like it came from Qwest's PR office.

    As is usual with opinions, YMMV.

    /P

  • Once upon a time QWEST absolutely refused to do anything about the unrepentant spammers on their network. I don't care what happens to either QWEST or any of the executives.

  • The topic itself is redacted each time it appears in the hundreds of pages of documents, but there is mention of Nacchio believing the request was both inappropriate and illegal, and repeatedly refusing to go along with it.

    The NSA contract was awarded in July 2001 to companies other than Qwest.

    I'm glad Qwest did the right thing. But my next question is, who did those contracts go to, and what illegal thing is THAT company doing right now? Unfortunately, the documents that would indicate this are sealed. There might be the makings of another EFF/ACLU -vs- AT&T case hiding amongst those documents.

  • It sounds like the guy was offered a bribe by the NSA to do something borderline illegal and he turned it down. Perhaps he didn't realize it was a bribe. Anyway he turned it down and he didn't get the moolah in return. Good for him on this count. However, it sounds like he was trading based on information not available to the public and thus is guilty of insider trading. It does not matter where this information came from. He could be the greatest philanthropist alive, but it does not affect his guilt

    • Re: (Score:2)

      by bigpat ( 158134 )
      The governments case was that he was being told by people inside Qwest management that they weren't going to meet stated expectations for the year and then he sold the stock based on that insider information. But if there were potential contracts to build classified networks worth billions of dollars being negotiated and he had a reasonable expectation that Qwest would get those contracts so the company would then meet or exceed expectations, then it wasn't insider trading. Because his expectation was in
  • The government screws you.

    (( Sigh. Some things just never change. ))

  • I can see this easily happening! Bush ALWAYS wanted to make the USA a police state! 9/11 simply gave him the REASON to! History will not be kind to shrub!
    • Hey DUMBASS! RTFA for once, you dolt! This happened BEFORE BOOOOOOOOOOOSH. Happened BEFORE 9/11. Happened under CLINTON! Oh, and while you're at it, read the attached PDFs to said article that defines the timelines as being PRIOR to 2001! Jesus... some people.

  • The timeline doesn't match up! (Score:3, Informative)

    by taskiss ( 94652 ) on Thursday October 11, 2007 @06:14PM (#20947365)
    From the article:

    The documents maintain that Nacchio met with top government officials, including President Bush, Vice President Dick Cheney and then-National Security Adviser Condoleeza Rice in 2000 and early 2001 to discuss how to protect the government's communications network.
    Bysh wasn't naugurated until Jan 20, 2001.
    http://www.whitehouse.gov/news/inaugural-address.html [whitehouse.gov]
  • it can not be presented at appeal.

    Joey Nachos is a vanquished robbing tyrant, and his lawyer is an idiot.

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