The man who would be king
Back in 1941 science fiction writer Robert Heinlein wrote in Logic of Empire You have attributed conditions to villainy that simply result from stupidity". As defenses of behavior go it is not the most compelling. If the prosecution of former high-flying Tyco International CEO Dennis Kozlowki is any indication at least according to Catherine S. Neal there was enough stupidity surrounding his case to nearly completely eliminate any thought of villainy from the American legal system.
That is essentially her contention in Taking Down the Lion: The Triumphant Rise and Tragic Fall of Tycos Dennis Kozlowski one of the few defences penned of Kozlowski. For those with short memories Kozlowski was convicted in 2005 of stealing millions from Tyco to fund a lavish lifestyle of $6000 shower curtains millions in art and every other conceivable luxury that even Croesus might have found excessive. Neal argues that Kozlowski who coincidentally received conditional discharge from prison this past weekend -- was a victim of his own carelessness an activist Manhattan DA the then outrage over Enron and Global Crossing and alleged duplicity.
The basic facts of the case are such: Kozlowski was convicted of accepting $81 million in bonuses that were not authorized a $20 million investment fee paid to a Tyco director for setting up a merger and the purchase of nearly $15 million in art which furnished a corporate apartment in New York City. While Kozlowski was CEO Tyco operated a program called Key Employee Loan Program (KELP) originally intended to loan money to employees to cover taxes related to vested stock options. Kozlowski eventually passed through personal expenses through KELP as if it were a personal bank account. The Manhattan DA argued that Kozlowski paid off at least part of those loans with the bonuses that the board of directors hadnt formally authorized even if he had earned them essentially committing larceny.
As Neal chronicles Kozlowskis troubles couldnt have come at a worse time. Tyco shares were falling over a failed merger with a financing company and the public was outraged over the corporate crimes at companies like Enron. Allegations were made though continually disapproved of similar accounting irregularities at Tyco. At perhaps most troublesome from a public relations perspective it was widely reported that Kozlowski lived like a king off Tyco money including a $30 million apartment property in Florida the aforementioned shower curtain and a $15000 umbrella stand though again all sides agree that no crime was actually committed over those items.
Several of Neals arguments are difficult to refute. Kozlowski may have been the dumbest smart guy in business by funneling his personal bills through a company office which although multiple audits show virtually every penny was paid back before his arrest still created an atom bomb sized cloud of suspicion. The evidence introduced in court was extraordinarily weak that there was any criminal intent related to his bonuses. Tyco was run less rigorously when it came to decision making processes and meeting minutes then some sewing circles. Potentially exculpatory evidence was never introduced because of privilege that Tyco enjoyed under the legal system. Kozlowski may have been convicted over outrage concerning other accounting scandals which took down companies like Enron and his lavish lifestyle.
And while there can be smoke where there is no fire Neal sometimes wants to eat the cake that shes trying to save. She repeatedly points out that Tycos board of directors left no paper trail which showed the bonuses werent approved and that some directors have verbally confirmed they were essentially given the green light. Fair enough but one could easily argue as the Manhattan DA successfully did that there were no meeting minutes and there are board directors who maintain they did not approve Kozlowskis bonuses the very ones he used to pay down his company loans. Neal maintains an outrage throughout the book that most of the directors seemed to have inappropriate dealings with Tyco from leasing the company planes to providing legal services while ascribing to Kozlowski simple carelessness and a preference for big picture thinking to explain away funnelling nearly every aspect of his private life through Tyco.
At the end of the day regardless of where you stand on Kozlowski its hard to refute that he got a bit of a raw deal from the justice system. He was stripped of every dollar and benefit he made while Tyco CEO was forced to pay tens of millions in fines and served a prison sentence longer than many murderers rapists kidnappers and drug traffickers in New York state endure. Even if Taking Down the Lion doesnt convince of you of Neals primary argument that Kozlowski was an innocent man done in by his own carelessness anger over corporate scandals and a company practicing maximum rear end covering it still raises enough questions that an impartial observer might wonder at what the truth really was.
The man who would be king
Back in 1941 science fiction writer Robert Heinlein wrote in Logic of Empire You have attributed conditions to villainy that simply result from stupidity". As defenses of behavior go it is not the most compelling. If the prosecution of former high-flying Tyco International CEO Dennis Kozlowki is any indication at least according to Catherine S. Neal there was enough stupidity surrounding his case to nearly completely eliminate any thought of villainy from the American legal system.
That is essentially her contention in Taking Down the Lion: The Triumphant Rise and Tragic Fall of Tycos Dennis Kozlowski one of the few defences penned of Kozlowski. For those with short memories Kozlowski was convicted in 2005 of stealing millions from Tyco to fund a lavish lifestyle of $6000 shower curtains millions in art and every other conceivable luxury that even Croesus might have found excessive. Neal argues that Kozlowski who coincidentally received conditional discharge from prison this past weekend -- was a victim of his own carelessness an activist Manhattan DA the then outrage over Enron and Global Crossing and alleged duplicity.
The basic facts of the case are such: Kozlowski was convicted of accepting $81 million in bonuses that were not authorized a $20 million investment fee paid to a Tyco director for setting up a merger and the purchase of nearly $15 million in art which furnished a corporate apartment in New York City. While Kozlowski was CEO Tyco operated a program called Key Employee Loan Program (KELP) originally intended to loan money to employees to cover taxes related to vested stock options. Kozlowski eventually passed through personal expenses through KELP as if it were a personal bank account. The Manhattan DA argued that Kozlowski paid off at least part of those loans with the bonuses that the board of directors hadnt formally authorized even if he had earned them essentially committing larceny.
As Neal chronicles Kozlowskis troubles couldnt have come at a worse time. Tyco shares were falling over a failed merger with a financing company and the public was outraged over the corporate crimes at companies like Enron. Allegations were made though continually disapproved of similar accounting irregularities at Tyco. At perhaps most troublesome from a public relations perspective it was widely reported that Kozlowski lived like a king off Tyco money including a $30 million apartment property in Florida the aforementioned shower curtain and a $15000 umbrella stand though again all sides agree that no crime was actually committed over those items.
Several of Neals arguments are difficult to refute. Kozlowski may have been the dumbest smart guy in business by funneling his personal bills through a company office which although multiple audits show virtually every penny was paid back before his arrest still created an atom bomb sized cloud of suspicion. The evidence introduced in court was extraordinarily weak that there was any criminal intent related to his bonuses. Tyco was run less rigorously when it came to decision making processes and meeting minutes then some sewing circles. Potentially exculpatory evidence was never introduced because of privilege that Tyco enjoyed under the legal system. Kozlowski may have been convicted over outrage concerning other accounting scandals which took down companies like Enron and his lavish lifestyle.
And while there can be smoke where there is no fire Neal sometimes wants to eat the cake that shes trying to save. She repeatedly points out that Tycos board of directors left no paper trail which showed the bonuses werent approved and that some directors have verbally confirmed they were essentially given the green light. Fair enough but one could easily argue as the Manhattan DA successfully did that there were no meeting minutes and there are board directors who maintain they did not approve Kozlowskis bonuses the very ones he used to pay down his company loans. Neal maintains an outrage throughout the book that most of the directors seemed to have inappropriate dealings with Tyco from leasing the company planes to providing legal services while ascribing to Kozlowski simple carelessness and a preference for big picture thinking to explain away funnelling nearly every aspect of his private life through Tyco.
At the end of the day regardless of where you stand on Kozlowski its hard to refute that he got a bit of a raw deal from the justice system. He was stripped of every dollar and benefit he made while Tyco CEO was forced to pay tens of millions in fines and served a prison sentence longer than many murderers rapists kidnappers and drug traffickers in New York state endure. Even if Taking Down the Lion doesnt convince of you of Neals primary argument that Kozlowski was an innocent man done in by his own carelessness anger over corporate scandals and a company practicing maximum rear end covering it still raises enough questions that an impartial observer might wonder at what the truth really was.