Add Qwest to the list of companies allegedly run through a "culture of fear."  As I discussed in detail in this guest column in Compliance Week last week, the criminal trials in both the Ebbers and Scrushy cases brought testimony about CEOs who pressured and intimidated subordinates into committing accounting fraud in the name of "hitting the numbers."

According to the SEC's complaint filed yesterday against former Qwest CEO Joseph P. Nacchio, two former Qwest CFOs, and several others, Nacchio ran Qwest through a "culture of fear."  The complaint states that:

• Nacchio had an explosive temper. One senior executive, in describing Nacchio’s interaction with subordinates, explained that "people [were] just afraid of the man."
• Another executive who worked on IRU transactions [one-time, non-recurring sales of assets] stated that Qwest management "had a culture of fear." No one wanted to find out the consequences for "not getting IRUs done."
• At a January 2001 all-employee meeting, Nacchio stated that "[T]he most important thing we do is meet our numbers. It’s more important than any individual product, it’s more important than any individual philosophy, it’s more important than any individual cultural change we’re making. We stop everything else when we don’t make the numbers."
• A Qwest executive noted that Qwest employees were afraid of the consequences of standing up to Nacchio and disputing revenue targets because the consequence was "potentially losing your job."
• Nacchio told one executive concerning revenue targets, "you do this or I’ll find someone who will."