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Defense grills ex-Tyco director

/ Source: The Associated Press

A lawyer for former Tyco International Ltd. Chief Executive L. Dennis Kozlowski on Wednesday sought to discredit testimony from an important prosecution witness by pointing to pending civil litigation against him.

The witness, Stephen Foss, who served on Tyco's board from 1983 until earlier this year, has testified that the board never approved loan forgiveness or several special bonuses granted to top executives.

Kozlowski and Mark H. Swartz, Tyco's former financial chief, are on trial in New York State Supreme Court for allegedly stealing more than $600 million from the Bermuda conglomerate through unauthorized compensation and illicit stock sales.

Kozlowski lawyer Austin Campriello asked Foss on Wednesday about shareholder litigation filed against him and other former Tyco directors in the wake of the grand larceny charges against the executives. The pending litigation accuses the board of negligence.

Campriello asked Foss if "it would hurt your position in that litigation" to testify that all of Kozlowski's compensation had been approved.

Foss replied that "we approved very large sums of money to go to Mr. Kozlowski. There are some we didn't approve."

Campriello asked again if different testimony would hurt his position, to which Foss responded, "I don't know that answer, sir."

Campriello also sought to show that Foss or other former directors, since being called to testify in the trial, may have changed their position on what they once considered appropriate use of company money.

Campriello asked about a Tyco board meeting held in the mid-1980s in Maui, noting that it's "a pretty fair distance between Maui and New Hampshire," where the company's corporate offices are located.

Foss testified that the company paid for members of the board and spouses to attend the meeting in Hawaii.

When asked about the choice of locale, the former director said there was "absolutely nothing inappropriate" about it and noted that Tyco has customers and a facility for its sprinkler unit in Hawaii.