Tyco's Toga Bash

Ah, what a treat it's been to see actual pictures of the famous Tyco (NYSE: TYC  ) toga party on the island of Sardinia. More than anything, that $2 million soiree came to symbolize the gluttonous excesses of former CEO Dennis Kozlowski's rule. But now he and ex-CFO Mark Swartz are in the midst of a criminal trial, charged with looting the company of millions of dollars.

As jurors watched an edited videotape of the party -- thrown in honor of his wife's birthday -- Kozlowski reportedly smiled and nodded his head at different points. His lawyers, you see, must convince the jury that such lavish parties are just part of business as usual. Tyco footed half the bill for the affair, which included a performance from Jimmy Buffett and an ice sculpture of Michelangelo's David urinating vodka.

"Is it true that, in addition to networking, many Tyco programs were designed simply and purely as a reward?" a defense attorney asked former events coordinator Barbara Jacques. She said it was true.

Look. A wild party or other exotic rewards are fine now and then. But Kozlowski dipped far too often into that trough. We all know about the $17,100 "traveling toilette box," $15,000 umbrella stand, and $6,000 shower curtain in his company-furnished apartment.

Perhaps the jurors can be convinced that such things are just part of business and usual, but investors know that's no way to run a company.

Kozlowski and Swartz have bigger problems on their hands than this, however. Yesterday, former VP of Personnel Patricia Prue testified that she was "surprised" when the two told her they weren't paying back millions in loans.

"This case is about lying, cheating, and stealing," the prosecuting attorney has said. If he convinces the jury of such, Kozlowski and Swartz could spend up to 30 years in jail.

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12/31/1969 7:00 PM
TYC $0.00 Down +0.00 +0.00%
Tyco International CAPS Rating: ***