A Poor Showing for a Tyco Defendant
By Katie DeWitt
Even if they're charming and confident, white-collar criminal defendants generally don't testify in their own defense. Either they don't have the stomach for it, or their defense counsel sees it as the wrong tactic. Martha Stewart didn't step up to the witness stand. Neither did former Tyco International (TYC ) CEO Dennis Kozlowski.
Mark Belnick, Tyco's general counsel, is no ordinary defendant, however. Once a highly respected corporate lawyer, he knows his way around the courthouse. So he has decided to take the risk of speaking to the jury face-to-face during his long-running trial in downtown Manhattan.
It was a high-stakes maneuver. Most criminal defense lawyers believe that when an accused takes the stand, juries tend to ignore all the other evidence and focus strictly on the defendant's credibility -- his body language, tone of voice, and apparent sincerity. And if he fails their assessment, Belnick faces up to 25 years in prison. He has been charged with falsifying business records, stock fraud, and grand larceny.
So how did Belnick do? After watching him being crossed-examined by lead prosecutor John Moscow on June 28-29, two of his four full days on the witness stand, my own verdict is that the National Enquirer would be a more trustworthy source.
For such an obviously intelligent man, Belnick claimed to have been unaware of a lot of what happened at Tyco. He professed to generally take Kozlowski's and former CFO Mark Swartz's word at face value. Not once did he question whether his $2 million cash bonus in 2000 ought to be acknowledged by the board or why he didn't have to disclose the $14 million-plus he was granted in relocation loans to pay for his New York apartment and his new house in Utah.
On the stand, the 57-year-old attorney's answers were often long-winded and confusing. While he maintained good eye contact with the jury and even with prosecutor Moscow, Belnick raised his voice on numerous occasions and sometimes came across as condescending. He allotted Moscow the respectful title of "sir" on several exchanges, although the word seemed insincere during the cross-examination.
When Moscow inquired whether Belnick had read the minutes from a meeting that mapped out Tyco's allocation of power when he joined in 1997, Belnick wasn't subtle: "I didn't go on an archaeology expedition into Tyco's history," he replied. Later, Moscow asked what Kozlowski was wearing on the day Belnick met him in his hotel room to discuss a bonus he would receive for his success in the Securities & Exchange Commission investigation. Belnick's incredulous response of "is this serious?" did nothing to earn my sympathy.
Belnick's credibility suffered little when he was giving his well-rehearsed responses to critical questions about the case's central issues. But Moscow caught him off-guard with a line of inquiry that had little to do with the actual charges but had a striking effect on the defendant's nerves and confidence.
The prosecutor asked Belnick to read aloud a letter of recommendation he had written for Kozlowski's daughter, Sandra, to Columbia Business School. After reading the letter, Belnick was forced to admit he made a mistake in the last paragraph, which described what a pleasure it had been to work with Sandy for the past two years.
In fact she had interned for him only for a summer. Next, Moscow asked about the letter Sandra had written to Belnick requesting the recommendation. In it, she told him that the application required two years of work experience and that she was going to cite her entire work experience as being at Tyco.
Lying in a recommendation letter is certainly not illegal. But the incident with Sandy Kozlowski cast doubt on the rest of Belnick's story and caught the often listless jury's attention. The diverse group of jurors, whose ages averaged in the early 30s, looked like students politely struggling to stay awake in a lecture they lost track of long ago. Taking a few notes here and there (or doodling in the margins), the jurors often fidgeted, and their eyes wandered during much of the questioning.
Manhattan Court Judge Michael Orbus, young and mild-mannered, did his best to keep Moscow's questions relevant and Belnick's answers to the point. He has been allowing the jury long breaks, rather than starting and ending the trial on time, however, so the days have moved at a slow pace. The lawyers plan to begin their closing arguments on July 5.
Belnick better hope his lawyers do a better job with winning over the jurors than he seemed to do. Otherwise, Martha Stewart better make room for two.
DeWitt is a BusinessWeek intern in New York
Edited by Mike France