Dennis Kozlowski Revisited
Catherine Neal: Dennis Kozlowski is the former CEO of Tyco International. Tyco International began as a small New Hampshire company. It's a conglomerate of hundreds of companies. And Kozlowski was very successful as a CEO. He grew the company significantly over the decades that he was the CEO. And by the time he ended his career there in 2002, the company had 250,000 employees worldwide in more than 100 countries and annual revenue of $40 billion.
So it was a huge global multinational corporation. Kozlowski's career didn't end the way that you might expect for someone who had such great success. In 2002 he was indicted for sales tax evasion charges by the Manhattan district attorney for some artwork that was shipped into the city.
So he was fired. Well, immediately after he was fired the Tyco board decided to do an internal investigation and they hired a high profile attorney named David Boyce to complete that investigation of the compensation and spending of Tyco executives. And even though Kozlowski was gone his actions were part of the investigation. When David Boyce and his team completed this internal investigation they found that Kozlowski had received compensation from the company that was not authorized. And that led to the indictment later in 2002 of Kozlowski and CFO Mark Schwartz and Tyco's general counsel at the time, a man named Mark Belnick. And the three of them were indicted for malfeasance at the head of Tyco.
Kozlowski was compensated generously by the Tyco Board of Directors over the years he was CEO. He was making, and in some years more than $100 million a year, so quite a large salary, one of the largest salaries among CEOs at that time. He was known for a pretty lavish lifestyle, large homes and many places in the country. He threw a huge birthday party for his wife at the time, a $2 million birthday party on the Italian island of Sardinia, which made the news and there was video of this very garish Roman orgy themed birthday party. He flew Jimmy Buffett over to play at the party; it cost a quarter million dollars. And it's true that Dennis Kozlowski did approve the purchase of a $6,000 shower curtain, not specifically that, he did not hand pick it; he didn't even know it existed until he went to trial. What happened is he hired a decorator who decorated an apartment and part of her choices was the $6,000 shower curtain, which to this day he has never seen and never used and would never have purchased himself he said.
Kozlowski was convicted of state criminal charges in a state court and sent to a state prison, a hard-core New York state prison, not a Club Fed like so many other, you know, white-collar criminals. Almost all, maybe even all of the other corporate scandals, if you look at them everyone who was prosecuted was prosecuted by federal prosecutors, not state, and they go to federal prisons, which you sometimes hear called Club Fed. They're nicer prison than state prisons. I think a lot of people believe that he had a, you know, a luxurious eight years in a country club with tennis courts, but that's simply not the case. The prison is scary and even just going in as a visitor is daunting. He just wrapped up his eight and a third years, which is 100 months of imprisonment. The battle he's going to have is overcoming this image that has been created of him as this really bad guy, you know, this thief, pig, you know, criminal who stole $100 million from the company that he ran. That's tough to overcome. So that's what lies ahead for him for the immediate future certainly.
Directed/Produced by Jonathan Fowler and Dillon Fitton
Dennis Kozlowski, the founder and former CEO of Tyco, is often seen as a poster child for an era wrought with greed and corporate corruption. Catherine Neal challenges this one-dimensional view of the man.
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