Out goes one team, in comes another as Qwest Communications International Inc. fights to get back on track.
Richard Notebaert, who was named chairman and chief executive after Joseph Nacchio resigned under pressure last month, appointed three new executives and made several organizational changes, the company said Sunday in a statement.
Oren Schaffer replaces Robin Szeliga as chief financial officer (CFO). Schaffer held CFO positions at Ameritech Corp. and Goodyear Tire & Rubber Co. Szeliga remains as an executive vice president, focusing on Qwest's debt reduction.
The CFO replacement comes as the Denver, Colorado, local and long-distance carrier struggles with a debt load of around $26.6 billion, a steep decline in its phone and Internet business, and an investigation by the Securities and Exchange Commission into the company's accounting practices.
The SEC is examining, among other things, the capacity swap deals that added nearly $1 billion to Qwest's revenue in 2001. Under these deals, the carrier sold capacity on its fiber-optic network to rival carriers and booked the revenue up front. At the same time, it purchased almost identical amounts of capacity from other carriers and booked those costs as a capital expense, which could be written off over time.
While Qwest is not alone in practicing such swaps, analysts and investors have questioned their validity.
Meanwhile, the U.S. Justice Department has also launched a criminal investigation into Qwest, the Wall Street Journal reported on Monday, citing people with knowledge of the situation. The carrier told the newspaper that it was not aware of an investigation by the department.
As for the other appointments, Gary Lytle succeeds Lauren Belvin as vice president for policy and law, dealing with regulators and other officials in Washington. And Joan Walker replaces Michael Tarpey as senior vice president of corporate communications.
In addition, Quest has reorganized the company around three units serving consumers, businesses and wholesale customers. Annette Jacobs has been appointed executive vice president of the consumer unit, Clifford Holtz executive vice president of the business customer unit and Gordon Martin executive vice president of the whole customers unit.
Qwest is a co-owner of the European data communications company KPNQwest NV, together with Koninklijke KPN NV (KPN). The Dutch company, which is seeking protection from creditors, shut down its Ebone Internet network last week and is expected to sell off its pan-European network in pieces.