Prosecutors say video of the $2-million extravaganza helps illustrate how two executives stole millions from the company.
By wire services
Published October 29, 2003
The videotape shown to jurors shows toga-clad women and a male model with guests at a birthday party L. Dennis Kozlowski held for his wife. Prosecutors contend Kozlowski illegally had Tyco foot part of the bill.
The videotape shows L. Dennis Kozlowski, above, standing between toga-clad women. Below, it also shows his wife, Karen Mayo, second from left, standing with another guest between two men in Roman centurion costumes.
NEW YORK - Jurors saw a videotape Tuesday of dancing women, half-naked male models and Margaritaville singer Jimmy Buffett at a $2-million party that L. Dennis Kozlowski, former chief executive of Tyco International, threw for his wife's birthday on the Mediterranean island of Sardinia.
Prosecutors contend that Kozlowski and Mark H. Swartz, the firm's chief financial officer, looted the company of $600-million by secretly making Tyco foot the bill for their expensive tastes.
The Roman Empire-themed birthday party - part of a six-day event that cost $2-million - may be the most vivid example of a list of high-priced items that prosecutors contend Kozlowski bought with money from Tyco, which picked up half the tab. "This whole week in Sardinia is a stark illustration of that," said Ann Donnelly, an assistant district attorney. Kozlowski contends that the event was in large part a business function.
"It's going to be a fun week," the tape shows Kozlowski telling about 75 guests arriving to celebrate Karen Mayo's 40th birthday on Sardinia on June 11, 2001. "Eating, drinking, whatever. All the things we're best known for."
The tape shows five young women in scanty, diaphanous frocks cavorting around a swimming pool, half-naked male models posing in snapshots with female guests and a performance from a pop star.
The jurors saw 21 minutes of what had been a four-hour videotape. State Supreme Court Justice Michael Obus, who is presiding at Kozlowski and Swartz's larceny trial, ordered some segments removed, saying they could prejudice the jury against the defendants and were irrelevant to whether they had committed any crimes.
The portions removed include shots of an anatomically correct ice sculpture of Michelangelo's David urinating Stolichnaya vodka into crystal glasses, Mayo's birthday cake in the shape of a woman's body with sparklers protruding from her breasts, two men dressed as Romans carrying Mayo over their heads, and a moment when a man drops his pants for the camera.
"While I am hesitant to make this trial any less entertaining than it already has been," Obus said, he told both sides that he had to agree with Kozlowski's lawyers, who argued that the scenes could prejudice the jury. "Whether an ice sculpture was at this party couldn't matter less," Obus said. The point, he said, is that "there is no doubt this was a lavish party."
Tyco party planner Barbara Jacques testified that singer-songwriter Jimmy Buffett and his group were flown in at a cost of $250,000.
In addition to the birthday party, the all-expenses-paid event included a beach barbecue in which guests were transported by boat from the hotel to another beach, a scavenger hunt, water-skiing, horseback riding, golf and scuba diving. Kozlowski's racing yacht the Endeavor and its staff were also in attendance.
Defense lawyer Austin Campriello conceded that the party was held as a birthday celebration, but he said Tyco business was taken care of as well.
The lawyer also got Jacques to acknowledge that several weeks before the bash, she and Kozlowski discussed the party's cost. She said she estimated the total at about $2-million and said Kozlowski guessed his share would be about $1-million.
Jacques also said she had made a mistake when she requested a check to pay for something related to the party but wrote on the request form that the money was for a Tyco incentive program.
Outside court, Kozlowski smiled and said, "Wasn't that tape boring?"
At the end of the day, Obus dismissed a juror without objection from either side. The juror, who has a law degree and is married to a lawyer, told the court two weeks ago that her brother works for one of the defense law firms.
The judge, just before a mini-hearing in the jury room, said the issue of whether the juror should continue had been raised by prosecutors. The juror's dismissal was expected to be read into the record today. Kozlowski and Swartz are on trial in Manhattan's state Supreme Court charged with grand larceny and enterprise corruption. Each faces as much as 30 years in prison if convicted.
Prosecutors say the two stole $170-million from Tyco by taking and hiding unauthorized pay and bonuses, raiding company loan programs and forgiving loans to themselves. They say the defendants made $430-million more on their Tyco stock by lying about the conglomerate's financial condition from 1995 into 2002.
Defense lawyers say Kozlowski and Swartz earned all the compensation they got from Tyco and that all the appropriate overseers knew about their compensation and loans.
- Information from the New York Times and Associated Press was used in this report.