Dennis Kozlowski
Associated Press
Former Tyco CEO Dennis Kozlowski enters Manhattan State Supreme Court ahead of closing arguments Monday.
updated 3/15/2004 5:12:01 PM ET 2004-03-15T22:12:01

A video of a $2 million birthday party presented at the trial of two former top executives of Tyco International and questions about sexual partners had nothing to do with their case, a defense lawyer said Monday in closing arguments.

Stephen Kaufman, attorney for former Tyco chief executive officer L. Dennis Kozlowski, said those things were mentioned to confuse jurors and incite prejudice against the defendants.

Prosecutors contend Kozlowski, 57, and his co-defendant, former chief financial officer Mark H. Swartz, 43, looted the conglomerate of more than $600 million and used the money to finance a lavish lifestyle.

Kaufman referred to the 40th birthday party that Kozlowski threw for his wife Karen on the Italian island of Sardinia in June 2001. The party featured scantily clad young men and women, along with singer Jimmy Buffet, flown in at a cost of $250,000. Half the bill — $1 million — was paid by Tyco as a “business” meeting, testimony showed.

Kaufman also said Kozlowski felt “sorrow and contrition” for dalliances with two women who testified that they were involved with the CEO while they worked at Tyco.

“I don’t say those relationships were appropriate,” Kaufman said. “I do say they were irrelevant. These should not be facts that you consider when you deliberate the guilt or innocence of my client.”

The two are accused of stealing $170 million by taking unauthorized bonuses and by abusing loan programs, and another $430 million by manipulating Tyco stock prices from 1995 through 2002.

But Kaufman said the former CEO earned — and internal and external auditors were aware of — every penny he received from Tyco. “He never robbed; he’s not a thief. He never stole from the company,” the lawyer said.

“The board of directors supported Dennis 100 percent of the time,” Kaufman said. “They never refused a request of Dennis’. This board was so supportive of Dennis, they said he could spend $200 million whenever he wanted.”

“You will not find, ladies and gentlemen, that Dennis ever stole a dime from Tyco.”
“His focus was Tyco,” Kaufman added. “It was not the focus of someone who stole. It was the focus of someone who created. He is the architect of a splendid creation.”

Kaufman spoke emphatically but in a weak voice, his recovery from the flu still evident. His summations were postponed last week when he became ill.

The Monday summations were delayed about two hours when juror No. 5 became sick, apparently from the flu. Justice Michael Obus dismissed her after consulting with her doctor. She was replaced by an alternate.

Charles Stillman, attorney for Swartz, presented his six-hour summation last week. He told the jury that after 47 prosecution witnesses and 700-plus exhibits, there was “not one thimble full of proof” against Swartz.

“They threw a lot of charges against the wall, hoping some would stick,” Stillman said. “Well, it didn’t work. A 10-pound slab of clay is just that, a 10-pound slab of clay. Don’t confuse volume with substance.”

Swartz and Kozlowski are charged with a total between them 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.

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