Kozlowski will be accused of “looting” the corporate treasury, taking $600 million in compensation that was never authorized by the board. Of course, there is no such crime as “looting” and Kozlowski’s defense will be that it isn’t stealing when they give it to you–even if, perhaps, they shouldn’t have.
He will argue that his pay was not so extraordinary–like it or not–especially for a man who was for a time being compared with Jack Welch, the nearly sainted CEO of General Electric.
A block away in U.S. District Court will be the first day of the trial of Frank Quattrone, a star banker from CSFB, a unit of Credit Suisse Group who is charged with obstruction of justice of a federal probe into the granting of special favors to key executives in the allocating of initial public offering shares.
That trial will raise technical issues about obligations in the face of a fledgling investigation and the meaning of ambiguous messages to underlings.
Somewhere in the Kozlowski trial, there will likely be evidence of the now-famous $6,000 shower curtain and the now-famous birthday party for Kozlowski’s second wife, Karen Mayo. The shower curtain and the party at a resort in Sardinia, like so much about the ex-Tyco chief, are at once more and less damning than they appear. First, as was made clear in James Stewart’s exhaustive profile, the shower curtain was not a shower curtain, but a room divider.
On the other hand, the $6,000 tab was but an incidental fraction of the $5 million or $6 million cost of renovating the Fifth Avenue apartment the company bought for Kozlowski–which, Kozlowski’s lawyers will argue, was the standard rate for fixing up $19 million duplexes.
But prosecutors will point out that there was no earthly reason that the company should be buying a $19 million apartment for its boss, not when he was paid enough to buy his own apartment, and not when the ostensible headquarters of Tyco was not in glitzy Manhattan, but in low-key Exeter, N.H. Exeter is where Kozlowski had his multimillion-dollar artworks shipped, allegedly to evade New York sales tax, but that’s the subject of another trial.