Ex-Tyco CEO in NY: I see I was greedy, I stole

April 12, 2012

NEW YORK (AP) — Imprisoned former Tyco chief L. Dennis Kozlowski, who became an emblem of corporate excess and was convicted in a massive fraud, told parole officials he has come to realize he was living in "a CEO-type bubble" inflated with greed, according to a transcript released Wednesday.

"I stole money from Tyco, and I stole a lot of money, and ... I'm very sorry I did that," Kozlowski told the state Parole Board in an admission that represented a sizable departure from the defiant posture he took as he was found guilty in 2005 of a more than $100 million fraud.

"I knew I was doing something wrong at some level when I did it. My conscience told me one thing, but my sense of entitlement allowed me to rationalize what I did," he added. "After I was in prison for a bit and thinking hard about what I did, I recognized my rationalizations were just that."

The Parole Board last week turned down Kozlowski's bid for release, calling his crime a "glaring violation" of shareholders' trust. The ex-executive, 65, is serving a sentence of 8 1/3 to 25 years. He can try again for parole in September 2013.

In the meantime, he has been in a work-release program since January, according to the transcript of the April 4 parole hearing. He now gets day passes to work at a workforce-training program on weekdays and spends weekends free, returning to a Manhattan prison on Sundays.

Kozlowski and former Tyco International Ltd. chief financial officer Mark Swartz were convicted in a case that became shorthand for executive avarice, at least for that time. Jurors heard about Kozlowski's $6,000 gold-threaded shower curtain and a $2 million birthday party he threw for his wife on the Mediterranean island of Sardinia.

Kozlowski and Swartz were accused of giving themselves as much as $150 million in illegal bonuses and forgiving millions of dollars in loans to themselves while manipulating the security systems company's stock price by lying about the state of its finances. The executives said that the payments had, in fact, been authorized and that the company had flourished under their leadership.

Kozlowski told the parole officials he'd turned down an informal offer to plead guilty in exchange for a sentence of two to six years, explaining, "I rationalized that I wasn't guilty."

"Back when I was running Tyco, I was living in a CEO-type bubble," Kozlowski told the Parole Board. "I had a strong sense of entitlement at that time, and I had a sense of greed."

His lawyer, Alan Lewis, declined to comment on Wednesday on the remarks. Lewis has said his client is deeply disappointed by the board's decision on his parole bid.

Besides their prison terms, Kozlowski and Swartz were ordered to repay the bonuses. Kozlowski also was fined $70 million, and Swartz was fined $35 million.

They appealed, saying jurors shouldn't have been allowed to hear certain testimony. The state's highest court, the Court of Appeals, upheld the conviction, and the U.S. Supreme Court declined to hear an appeal.

Swartz, 51, is eligible for his first parole board interview in September 2013, according to the state Department of Corrections and Community Supervision.

The Manhattan district attorney's office had no immediate comment Wednesday on Kozlowski's comments.


Follow Jennifer Peltz at http://twitter.com/jennpeltz