updated 5/4/2005 7:22:47 PM ET 2005-05-04T23:22:47

Mark Swartz, former chief financial officer of Tyco International Ltd., testified in his own defense Wednesday and denied charges that he stole millions of dollars of the company’s money through unauthorized pay and loans.

“I never stole money from Tyco,” Swartz answered his lawyer Charles Stillman. “I never agreed with (former Tyco chief executive officer) Dennis Kozlowski or anyone at Tyco to steal money from Tyco. No one ever asked me to steal money from Tyco.”

Swartz, 44, and Kozlowski, 58, are on trial in Manhattan’s state Supreme Court, charged in a 30-plus-count indictment that accuses them of looting Tyco of $170 million by hiding unauthorized bonuses and secretly forgiving loans to themselves. They also are accused of pocketing $430 million by pumping up Tyco’s stock price with lies about the company’s finances.

If convicted of the top charge against them, first-degree grand larceny, and some of the other more serious counts, each defendant could face up to 30 years in prison.

One larceny charge against Swartz involves a $12.5 million loan forgiveness in 1999 that he defended as a bonus applied to a debt he owed Tyco. Stillman asked whether he thought that debt reduction “was unauthorized or improper in any way.”

“I believed just the opposite,” Swartz answered, “that it was authorized and that it was approved.”

Swartz described his use of the company’s key employee loan program and its relocation loan program — both of which he is accused of abusing — as being consistent with previous uses by other executives and with what they had told him was proper.

Swartz, who became Tyco’s CFO in 1995, said he also believed the $20 million fee Kozlowski authorized for Frank Walsh, a former member of Tyco’s board of directors, for facilitating Tyco’s merger with CIT Group, a commercial lender, was proper.

It was this fee dispute that led to the end of Kozlowski’s and Swartz’s reign at Tyco.

After Walsh rejected the board’s pleas to return the money, the directors hired a law firm to investigate. This led to the indictment of Kozlowski, Swartz and Walsh. Walsh later pleaded guilty to a felony and returned the money.

Stillman asked Swartz whether he had doubts about the propriety of the Walsh fee.

“Not for a second,” the witness replied. “I believed it was properly authorized by Dennis Kozlowski.”

Kozlowski finished testifying Tuesday after three days on the witness stand. Much of his testimony was similar to that of Swartz so far.

But the former CEO also was forced to explain that he did not notice that $25 million in bonus payments used to pay off a company loan was not included on his W-2 tax forms as 1999 income from the company.

“No one ever told me it wasn’t on my W-2,” Kozlowski said. “It never dawned on me.”

He also said he paid about $1 million of his own money toward the company’s weeklong celebration on the Italian island of Sardinia that was promoted as a 40th birthday party for his wife. The company also paid about $1 million.

In their first trial, which ended in a mistrial in April, Swartz was the only defense witness. Testifying for nine days, he explained in detail Tyco’s compensation plans and the top two executives’ relations with the board, and he defended actions that prosecutors said were illegal.

Tyco, which has about 250,000 employees and $40 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.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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