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Ex-Tyco CFO invokes dead director

Former Tyco International Ltd. finance chief Mark Swartz invoked the name of a dead director at least a dozen times on Tuesday as he offered proof that the board allowed millions of dollars in loans and bonuses.
/ Source: Reuters

Former Tyco International Ltd. finance chief Mark Swartz invoked the name of a dead director at least a dozen times on Tuesday as he offered proof that the board allowed millions of dollars in loans and bonuses.

In his seventh day of testimony, Swartz resurrected conversations he or his boss, former Tyco chairman Dennis Kozlowski, had with the late Phil Hampton, a Tyco director who died of cancer in 2001. Before his death, Hampton served as chairman of Tyco's compensation committee and signed off on bonuses and loans, Swartz testified.

Several other Tyco directors have testified that the conglomerate's board never approved the lucrative awards.

Swartz likely will be the only defense witness in the corruption trial that accuses him and Kozlowski of looting the Bermuda-based conglomerate of $600 million. Both men deny any wrongdoing. They are accused of enterprise corruption, grand larceny, securities fraud and falsifying business records.

When asked by prosecutor Marc Scholl about the approval of relocation loans, Swartz said that Kozlowski had told him it was "based on a conversation he had with Hampton."

Defense lawyers contend the other directors were aware that Hampton had signed off on many of the transactions that are now at the heart of the corruption case against the two defendants.

Hampton, for example, worked on behalf of the company on retention agreements for Swartz and Kozlowski.

Most of Swartz's cross-examination on Tuesday focused on conversations he said Kozlowski had with Hampton in the approval of $37.5 million in bonuses.

Swartz received $12.5 million while Kozlowski walked away with $25 million.

Scholl has indicated to Manhattan Supreme Court Judge Michael Obus he expects to wind up his cross examination of Swartz on Wednesday.