Tyco's Kozlowski Confronts His Peers

The CEO who lived like a king watched impassively as the average citizens who'll decide his fate began the jury-screening process

By Nanette Byrnes

Dennis Kozlowski arrived early at 100 Center Street in downtown Manhattan on Sept. 29 for the first day of his criminal trial. It was a crisp fall morning -- a nice day to be outside. But first things first: the matter of jury selection. By 9 a.m., the former CEO of Tyco International had camped himself in the hallway in front of presiding Judge Michael Orbus' courtroom. Dressed in a conservative blue suit and silk tie, Kozlowski would face for the first time the randomly selected group of Manhattanites who'll ultimately provide a jury of his peers -- or at least people who live in Manhattan. Few could be considered his true peer, even in a city this rich.

Kozlowski is charged with stealing $170 million in compensation and bonuses from the conglomerate he ran for 10 years and an additional $430 million from its investors. He must convince a jury that he's innocent. If found guilty, he faces a possible sentence of decades in a New York State penitentiary. Standing between him and a verdict is a trial expected to last into next year. For the prosecution, building the case is likely to prove slow and laborious, as much of the Manhattan District Attorney's case against Kozlowski will rely on dry documentary evidence, including the minutes of board meetings and even Tyco's bylaws of incorporation.


  Most likely to perk the ears of the jury are witnesses likely to attest to Kozlowski's lavish lifestyle. Prosecutors are expected to introduce evidence about elaborate parties hosted by the Tyco ex-CEO and his second wife, Karen, plus descriptions of a duplex apartment he purchased on Fifth Avenue and later decorated with extravagances, including a now-infamous $6,000 gold shower curtain.

Already, Kozlowski's deep pockets have influenced the look of the courtroom. It underwent a technological makeover last week on the defense team's dime. Running along the aging wood-paneled walls are new shoots of electric wire supporting the flat-screen computers blossoming from the well-worn lawyers' desks. Nestled beneath one of the windows is a state-of-the-art projector that will beam exhibits onto a mammoth screen next to the defendants.

As he entered the 13th-floor courtroom for the first time, Kozlowski was flanked by his team of lawyers -- but had none of the family support that surrounded co-defendant and Tyco's former CFO, Mark Swartz, who arrived holding his wife's hand. While Swartz smiled and even joked a bit for the cameras, Kozlowski was somber and serious, declining to comment on the case beyond asserting, "We're ready for it."

His buttoned-down demeanor stood in sharp contrast to many of the potential jurors, some in sneakers and baggy jeans, others in fashionable low-cut denims and sling-back heels. The jury pool truly had the look of a cross section of a heterogeneous city.


  Some among the first day's draft of 110 possible jurors let out an audible gasp when Orbus said the trial could last four months. By the end of the morning, he had winnowed the day's pool to 41 possible jurors, weeding out those who said they would be unable to serve four days a week in a trial that may extend well beyond Christmas. Over coming days, more prospective panelists will be vetted, until 100 candidates have been selected. That's when defense and prosecution lawyers will begin more detailed questioning, which will continue until until the final panel is selected.

In brief opening remarks, Orbus tried to keep the potential jurors focused on the crux of the case, not the flurry of publicity that preceded it. "We're not here to conduct some kind of sociological study. We're not here to send a message to anybody," he said. "It's not a case of Enron or WorldCom or any other company you may have heard about. It's not an evaluation of the New York Stock Exchange or how much corporate executives should be paid."

Given all the charges of corporate malfeasance over the last few years, keeping that message in mind is likely to prove a challenge for those who make the final cut.

Byrnes is a BusinessWeek senior writer in New York

Edited by Douglas Harbrecht

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