Wednesday, March 18, 2015

Where are they now? Dennis Kozlowski edition.

Perhaps Pink Slip hasn’t been looking hard enough, but it seems that the corporate scandals these days are just not as compelling as they were in days of blogging (let along pre-blogging) yore. It may be that organizations are more honest and compliant these days (hmmmmm….). Or it may just be that we have all become so jaded that it would take a real doozy for any of us even notice that some big hedge fund or corporate mahoff had gone off the rails.

The most recent tales of things gang agley, business-wise, all seem to be about intemperate use of social media or good old fashioned résumé inflation. All the ‘too big to fail’ guys were, apparently, ‘too big to get indicted.’

Compared to the days of Ken Lay and Jeff Skilling, of Stephen Cohen, of Bernie Madoff (talk about God’s gift to bloggers for a while there), of Raj Rajaratnam, of Bernie Ebbers, I seem to be coming up empty of late on the scandal beat.

And then I saw an article  on Dennis Kozlowski, the Tyco tycoon who, for a while there, was living as LARGE as any of the corporate scofflaws.

If you’ve forgotten the details, Kozlowski was most famous for a lushly furnished NYC apartment, with lush furnishings that included a bespoke $6K shower curtain. (You can’t really have a flat that sports a Monet and a Renoir and go with the kind of plain white plastic shower curtain you can pick up at your local True Value, can you?) He also threw a $2M birthday party in Sardinia to celebrate the 40th b-day of his now ex-wife. This soiree – paid for by Tyco – featured an ice-sculpture of Michelangelo’s David peeing Stoli, and a $250K guest appearance by Jimmy Buffet. (Seriously, I like Jimmy Buffett as much as the next guy, but has a two or three hit wonder ever loomed so large and expensively on the cultural landscape?)

Mostly what Kozlowski was known for was playing fast and loose with the Tyco cookie jar, helping himself to compensation and expense money (e.g., $6K shower curtain) that may have been wink and a nod okayed, but was never formally approved by Tyco’s board. Just the sort of a-hole, good old boys “governance” that led to the proliferation of so much regulation.

Anyway, I read about Kozlowski the other day, and his $2M Stoli-pissing-ice-sculpture days are in the rear view mirror. He’s out of prison and now living a bit more modestly in a two-bed apartment on the East Side than he was in his glory days (but a bit more comfortably than when he was in the hoosegow in  upstate).

Ten years and a lifetime ago, Kozlowski reigned as the archetype of avarice. It is what helped lead to his conviction in 2005 for looting nearly $100 million from Tyco, for which he served 6½ years in prison. That showy shower curtain was in his corporate residence on Fifth Avenue — paid for with Tyco funds.

“I was piggy,” he said during a series of recent interviews with The New York Times. “But I’m not that person anymore.” (Source: NY Times via the Boston Globe)

Although conceding that he was piggy (or, perhaps more accurately, hoggy: after all, pigs just get fat, hogs get slaughtered), Kozlowski also:

…maintains he was unfairly convicted, especially in light of how few big names were brought to trial in the most recent period of Wall Street malfeasance. “After 2008,” he said, “nobody was prosecuted.”

There are plenty of others who believe that Kozlowksi was innocent of being anything more than a showy spendthrift whose extravaganza ways left him vulnerable. As a result of being so ridiculously and publicly greed-is-good-y, he may just have found himself railroaded by an over-zealous prosecutor and hung out to dry by a board that had ignored his antics, if not tacitly approved them, until the dogs of prosecution began to howl. And, whatever else you can say about him, it was on his watch that Tyco significantly increased in value and, as the article points out, unlike Enron and WorldCom are still standing and employing lots of people.

Because Kozlowski was prosecuted by the state (NY) rather than the feds, he didn’t get to go to a particularly cushy prison. (I suspect that nothing near Utica, New York can be categorized as cushy.)

Now he’s back to work, sort of.

No, he’s not the CEO of a multi-billion dollar conglomerate, but he does some:

…“’low level consulting’ on mergers and acquisitions and serves on the board of Fortune Society, which assists former convicts.

The Fortune Society sounds like an especially worthy organization for someone to be involved in, given how so many ex-cons become recidivists precisely because they can’t find that point of re-entry into society.

Kozlowski’s not dead broke, but he’s not the guy who owned the Renoir and the yacht, or showered in the $25M apartment. And at 68, he’s unlikely to ever recoup what he was worth – at least on paper – at the height of his career. (He does own a tiny piece of the New York Yankees (hiss-boo).)

Anyway, the man’s done his time.

Interesting to see that he’s out and what he’s up to.

No comments: