Sorry, Wrong Number

In its advertising, US West boasts about how the phone company is making it easier for its customers to gather information. But there are some things US West doesn't want its customers to know--such as salary levels for its top executives.

Westword believes US West's ratepayers in Colorado have a right to know the kinds of salaries they're supporting at the phone company. But although the federal Securities and Exchange Commission requires US West to release the salaries of its top five executives--a requirement that applies to all publicly traded companies--information about the numerous other high-level salaries at the company has been off-limits to the people paying the bills.

Westword filed an open-records request last month with the Colorado Public Utilities Commission to gain access to a document on file with the PUC that lists the salaries of 200 US West executives who are paid more than $100,000 per year. The PUC agreed with Westword that the document, known as "Appendix A," is a public record. But the state agency refused to turn it over until US West had a chance to go to court to block its release. Last week the company did just that, filing a complaint against the PUC in Denver District Court and winning a temporary restraining order prohibiting the PUC from turning over the information by Westword's deadline.

At the July 2 hearing, which Westword and its attorneys were notified of an hour before it was scheduled to start, phone-company lawyers called three US West executives as witnesses. Those executives--Brian G. Johnson, Joseph T. Dwyer and Mark Roellig--told District Judge Larry J. Naves that disclosing salaries would violate their privacy and harm US West's ability to compete in the marketplace. Roellig, US West's vice president for law and human resources, told the judge that, even though the company already engages in cutthroat battles with its competitors for prized executives, releasing specific salaries would allow AT&T, Tele-Communications Inc. and other companies to pick off its best talent.

Anthony Marquez, a state attorney who represented the PUC at the hearing, told Judge Naves that the agency carefully considered Westword's request and believes Appendix A clearly qualifies as a public record. Marquez also told the judge that his agency would not look favorably on an implicit threat contained in the company's motion for a temporary restraining order. In that document, US West said that if salary information were released to the public, the company would be "forced to rethink its disclosure practices to the Commission" and might "restrict Commission access to confidential information." For instance, the document said, the company could require commission staffers to come to US West's offices to view confidential information and prohibit them from making copies for the state's files.

However, Naves rejected Marquez's arguments and sided with US West, signing a temporary restraining order that had been drafted by the company's attorneys from Sherman & Howard, a silk-stocking 17th Street law firm. In addition to finding that the release of executive salaries would make it difficult for the company to compete, Naves accepted the firm's argument that under Colorado Public Records Law, executive salaries are exempt from disclosure because they are contained in "personnel files." The judge made that ruling even though public-records law specifically states that "compensation" for state employees is a matter of public record. Naves explained his decision by noting that he believes US West is a purely private company, even though it is pervasively regulated by the PUC, which reviews salary information when evaluating requested rate hikes.

Executive salary levels have become an issue around the country. According to Business Week magazine, the average salary for a chief executive rose by 18 percent last year, while average white-collar salaries increased by just 4.2 percent. Such salary increases have even raised the ire of stockholders, who note that high-level executives often seem to get raises whether or not the company has done well.

"US West chairman Dick McCormick makes more than $3 million a year," says Cliff Young, a US West stockholder and employee who has criticized executive salary levels at US West shareholder meetings. "It's a good ol' boys network, and those who have the gold make the rules."

Westword was able to obtain all but seven pages of Appendix A. The document reveals that US West spent $134,413 last year on the seven in-house political lobbyists it employs in Colorado. Included on that list is firm vice president John Scully, who received $223 an hour for his work at the legislature. The company also racked up well over $1 million in expenses for owned and chartered helicopters and airplanes, which it used to ferry its executives around the world. And to make sure Coloradans know how lucky they are to be served by US West, the company spent $7.5 million on advertising in the state last year.

US West even shared its concern for the Westword staff with the court. "Another harmful effect of the dissemination of US West's compensation information would be the internal strife which it would undoubtedly initiate," says the filing. "Upon seeing the listing, Westword employees who may not be as highly paid as those on the list could become dissatisfied with their salaries."

Attorney Marquez says the PUC has not yet decided whether it will appeal Naves's ruling.



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