Setting the Record Straight

After serving eight years in prison, Dennis Kozlowski returns to the island for the Nantucket Project.

In the public imagination, Dennis Kozlowski, the former CEO of the industrial conglomerate Tyco, became a poster boy for corporate excess. The details of his case, after all, made for wonderful tabloid fodder. In the words of prosecutors, Kozlowski “looted” the corporate treasury to pay, at least in part, for a $6,000 shower curtain as well as a $2 million Roman orgy-themed party on the emerald coast of Sardinia. Kozlowski spent eight years in prison for misappropriating hundreds of millions of dollars in the form of unauthorized bonuses, interest-free loans and other sketchy mechanisms. He was released on parole in January.

But in the eight years that Kozlowski spent in federal prison, the standard for corporate looting changed from simple excessive compensation to the Ponzi schemes that were Enron and Worldcom. Tyco was a legitimate company earning legitimate profits and creating legitimate equity for its stockholders. To this day it’s a thriving enterprise, unlike many of its predecessors who have left shareholders with worthless stock certificates. The question to be answered is whether Dennis Kozlowski was guilty of a crime, or simply bad tim- ing. Kozlowski, a one-time summer resident of Nantucket, will return to the island in September to speak at The Nantucket Project. Is he looking for redemption?

Time may not heal all wounds, but Kozlowski’s image rehabilitation has already slowly begun. He has a few things going for him. First, unlike Enron and WorldCom, Tyco survived, and the company has come to flourish under new management. The scale of Kozlowski’s misdeeds also appears to pale in comparison to the kind of blunders that led to our recent financial crisis. “Why am I sitting here?” Kozlowski asked in a 2008 jailhouse interview with FOX Business Network. “Tyco is still a viable company, still alive and kicking. Bear Sterns is under, Lehman Brothers is under. Merrill Lynch had to be acquired. There are all kinds of banks going under right now…I would think that the financial world would say, ‘Please bring back the $6,000 shower curtain.’”

Kozlowski is not alone in his thinking. He continues to enjoy the loyalty of a group of fierce defenders, many of whom he befriended on Nantucket. He is a man of strong character, they testify, not the scoundrel he has been made out to be in the media. Friendship here runs deep. Kozlowski’s most vocal champion these days, however, is a strange bedfellow. She is Catherine Neal, a business ethics professor. “I’m not a likely advocate for a man who is widely considered one of the most notorious of all the corporate executives tried and convicted as a result of Enron-era scandals,” says Neal, a professor at Northern Kentucky University. Neal became acquainted with Kozlowski through the textbooks she was using to teach her courses. The Tyco scandal was presented as a case study in corporate greed, but Neal says the situation “on its face didn’t make sense to me.”

To satisfy her own curiosity, Neal wrote a letter to Kozlowski in prison and was surprised to receive a handwritten response. The two eventually met, and Neal recounts that Kozlowski “challenged me to look at everything, to talk to everyone involved, and to reach my own conclusions.” The result, two and a half years later, is Neal’s book, Taking Down the Lion: The Triumphant Rise and Tragic Fall of Tyco’s Dennis Kozlowski. Her conclusion: Kozlowski never should have been charged with a crime. If Kozlowski did anything wrong, Neal argues, it was the crime of being foolish. By spending lavishly, Kozlowski made himself an easy target for prosecutors who were out for blood in the post- Enron environment.

Neal has made it a personal crusade to get the whole truth out about Kozlowski, and she has spoken out on his behalf in television appearances and on the college lecture circuit. It is unclear how many converts she has gathered. Neal paints Kozlowski as a tragic figure. Ambition was the key to both his success and downfall. Kozlowski developed a reputation as one of the most aggressive dealmakers in corporate America, completing over 700 mergers and acquisitions as Tyco’s CEO. “Deal-a-Day” Dennis, as Kozlowski became known, transformed Tyco from what Bloomberg Business Week called a “third-rate conglomerate” into a $100 billion powerhouse.

Kozlowski “became personally obsessed with extravagance, wealth, and power,” contend Theodore Roosevelt Malloch and Jordan Mamorsky in their searing indictment of the excesses of the financial industry, The End of Ethics. To put it another way, “I was piggy,” as Kozlowski himself has admitted. But did Kozlowski actually break the law? And if he did, did he really deserve a prison sentence that is harsher than what many murderers receive? On the other hand, has Kozlowski paid his full debt back to society?

“By putting Dennis Koslowski onstage we are neither giving him an award nor subjecting him to a show trial,” says Tom Scott, who co-founded The Nantucket Project with Kate Brosnan in 2011. “We are an intimate gathering. Our audience will have the opportunity to hear Kozlowski and other speakers in their own voices. That’s why we started The Nantucket Project.”

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