Closing Arguments In Tyco Trial

Former Tyco CEO Dennis Kozlowski enters Manhattan State Supreme Court, Monday, March 15, 2004, in New York.
AP
A $6,000 shower curtain was just one of many extravagances former Tyco International CEO L. Dennis Kozlowski allowed himself while allegedly looting the company of $600 million with his co-defendant, the prosecution said Tuesday in closing arguments.

Kozlowski also bought "$30,000 worth of opera glasses," Assistant District Attorney Ann Donnelly told jurors in Manhattan's State Supreme Court. "The shower curtain was a bargain."

Kozlowski, said Donnelly, was interested in showing off art to high society figures to show "he's just like them."

While conceding that "there's nothing wrong with" the extravagant lifestyles Kozlowski and former chief financial officer Mark Swartz led, Donnelly said: "But you have to pay for it. Don't make someone else pay for it for you."

Kozlowski and Swartz "thought they were above the law," she said. "These defendants stole huge amounts of money, with two fists."

Kozlowski, 57, and Swartz, 43, are accused of stealing $170 million by taking unauthorized bonuses and by abusing company loan programs. They allegedly netted another $430 million by manipulating Tyco stock prices from 1995 through 2002.

The jury was expected to get the case later this week.

On Monday, Kozlowski's lawyer, Stephen Kaufman, told the jury that Tyco paid Kozlowski huge sums of money because he helped the company earn billions of dollars and hugely increased its stock price in seven years.

Kaufman said his clientcaused Tyco's stock price to leap from $5.17 a share in 1993 to $51.88 in 2000. "While the extraordinary success of this company cannot be attributed to one person, one person was an extraordinary factor, and that was Dennis," Kaufman said.

Kaufman said Kozlowski earned - and the board of directors and internal and external auditors were aware of - every penny he received from Tyco.

"He never robbed; he's not a thief," the lawyer said.

Kaufman told the jury that "the sky was the limit" after Tyco lifted the $1 million cap on its CEO's annual earnings. He said all compensation granted after that "was on the books and records of the company."

But Donnelly said Tuesday that Tyco paid the two defendants huge sums in legitimate compensation and that "the directors did not know these defendants were giving themselves bonuses and abusing loan programs." Just because some transactions were on the books, doesn't mean they're not thefts, she said.

And Donnelly disputed Kaufman's assertion that a video showing a lavish $2 million party Kozlowski threw for his wife's 40th birthday on the Italian island of Sardinia was presented to invoke "prejudice" in the jury.

Instead, she said, the Sardinia party provided "a window" through which the jury could see how the defendants viewed Tyco: "as a purely personal source of money whenever they wanted it."

CBS News Legal Analyst Andrew Cohen notes that "the key to the defense, for both men, is to try to convince jurors that the lavish spending and all that was known to and approved by the Board. If the jury believes that to be the case, it would be nearly impossible for the panel to find that the defendants had any criminal intent - and that might mean acquittal on most of the charges."

"After six long months of trial," adds Cohen, "jurors have a fairly stark choice to make about whether all this lavish spending amounts to a crime."

Charles Stillman, Swartz's lawyer, was allowed a few minutes Tuesday morning to recap the six-hour summation he presented last week, in which he said that after 47 prosecution witnesses and 700-plus exhibits, there was "not one thimbleful of proof" against Swartz.

Kozlowski and Swartz are charged with a total of 32 counts of grand larceny, falsifying business records and violating state business laws. The grand larceny charge - a mega-larceny under state law since it alleges theft of more than $1 million - is punishable by up to 25 years in prison.

Tyco, which has about 270,000 employees and $36 billion in annual revenue, makes electronics and medical supplies and owns the ADT home security business.

Nominally based in Bermuda, its operations headquarters are in West Windsor, N.J.