September 20, 2005
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Greed, It Turns Out, Isn’t So Good
Seth Wenig/Reuters
Dennis Kozlowski leaving State Supreme Court in New York City in June.
September 20, 2005
Greed, It Turns Out, Isn’t So Good
By CLYDE HABERMAN
MANY years ago, when we both toiled for The New York Post, a colleague passed the time one night telling me about corruption trials that he had covered in New Jersey, a state graced with an ample supply of government officials caught with their hands in the till.
One case involved a mook who was charged with pocketing $100,000 in public funds. The prosecution had this fellow nailed. They could have measured him for a striped suit right there in the courtroom. In the end, his lawyer played the only card he had left.
He paced theatrically in front of the jurors. Then he raised his hands beseechingly and said in his best “they arrested my guy for this?” tone: “Ladies and gentlemen of the jury – I mean, we’re talking about $100,000.”
Nice try. Too bad for his client that it didn’t work.
A faintly reminiscent scene was played yesterday in a Manhattan courtroom. There, the Tyco tycoons L. Dennis Kozlowski and Mark H. Swartz were handcuffed and led away to begin long prison terms for having robbed their company, if not blind, then certainly nearsighted.
To earn their sentences of 8 1/3 to 25 years, Messrs. Kozlowski and Swartz stole, by the prosecution’s count, a cool $180 million and ultimately cost Tyco shareholders billions in the resulting scandal. “Kleptocratic management” was how an assistant district attorney, Owen E. Heimer, described their style.
That the two men would go to prison was never in doubt. The only question was for how long. In pleading yesterday for leniency, the defense team offered an echo of the “what’s so terrible?” argument that did that New Jersey official no good long ago.
“Tyco is not Enron,” said Mr. Swartz’s lawyer, Charles A. Stillman.
In other words, unlike Enron and other paragons of corporate greed, Tyco International did not go bankrupt because of Mr. Kozlowski’s much-joked-about excesses and sins against good taste. Remember his $6,000 shower curtain and $15,000 umbrella stand? How about the $2 million birthday party that he threw for his wife on Sardinia, complete with an ice sculpture of Michelangelo’s “David” urinating vodka.
Despite all that, the company’s stock did not implode. Thousands upon thousands did not lose their jobs. No old man or woman, so far as anyone knows, was forced to go on a Purina diet.
I mean, we’re talking about $100,000 – updated with a lot of extra zeroes for the new century.
The judge, Michael J. Obus, was not buying Mr. Stillman’s reasoning.
Oh, he suggested, perhaps Mr. Heimer went overboard in describing the defendants as barely below monstrous. But let’s not be airheaded. Harm was done and trust was violated, he said. So he sent the two men to prison for a good long while, ordering them also to pay $134 million in restitution and $105 million in fines. Goodbye shower curtain and umbrella stand.
If nothing else, Mr. Kozlowski and Mr. Swartz were guilty of monumentally bad timing.
They learned too late that greed is out of fashion, ever more so now that Hurricane Katrina has violently exposed the fault lines of class in America. Sorry, Gordon Gekko, but for the moment at least, corporate plunderers are no more tolerated than common criminals. Indeed, their reputations may be worse.
“What gunman in the street,” Mr. Heimer asked the judge, “has ever managed to steal $180 million?”
Speaking of street gunmen, the punctuation-challenged rapper named Lil’ Kim began a yearlong jail sentence yesterday. She had committed perjury in testifying about a 2001 shootout between rival hip-hop groups outside a Manhattan radio station. In the land of rap, settling differences with lead qualifies as intelligent discourse.
Still, that world has more in common with the corporate realm than one might think. A unifying thread is greed: getting as much as you can while you can. One group can’t talk enough about bling. The other has stock options.
But who knows? Prison did Martha Stewart no harm; she is bigger than ever. Maybe Lil’ Kim will prosper, too. And while not quite in their league when it comes to celebrity, Mr. Kozlowski might also figure out how to bounce back.
That, however, lies well in his future. He has more immediate concerns. For one thing, Attica or wherever else he winds up may not be the best place for jokes about shower curtains.
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