Taking Down the Lion: The Rise and Fall of Tyco's Dennis Kozlowski (22 page)

Professor Kathleen Brickey of the Washington University School of Law dedicated much of her career to the study of corporate and white-collar law. Brickey researched and published extensively about the media and its effect on corporate scandals and white-collar criminal prosecutions. In an article published by the
Iowa Journal of Corporate Law,
she wrote that “Enron and its progeny spawned an unprecedented amount of press coverage.” Professor Brickey observed that “[w]hile it was a safe assumption that the sagas of Enron and—to a lesser extent—media icon Martha Stewart would receive sustained media attention, the sheer magnitude of the corporate governance scandals fueled extraordinary coverage of massive frauds at WorldCom, Tyco, HealthSouth, and Adelphia, to name but a few.”
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Brickey declared Kozlowski’s trial a “mistrial by media” as she described how the
Wall Street Journal
published the name of juror Ruth Jordan. Brickey noted that Maremont’s article started a media frenzy as the
New York Post
followed his lead and labeled Jordan the “Holdout Granny” in a front-page story that included a
caricature of the elderly juror. Other media outlets picked up Maremont’s story—all of which were published and read as the jury was deliberating.
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Brickey opined, “So assuming
arguendo
the story was worth covering—but also acknowledging that the reporting was, of necessity, one-sided [because Maremont could not interview Jordan]—what did the personal details about Ruth Jordan add to the newsworthiness or importance of the report? Was it necessary to provide her name, picture, and background in order to convey what reporters saw (or thought they saw) in open court?” She observed that “ . . . as can readily be seen, it is not always easy to discern the proper balance between competing goals of the media and the courts. But if the press is to effectively perform its watchdog role, it should be mindful of the occasional need to watch itself.”
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As he declared the mistrial, Justice Obus apologized to jurors; he told them he was sorry the system was unable to protect them. After receiving the stunning news, Kozlowski left the courthouse without comment. He later spoke by phone with Andrew Ross Sorkin and said, “I’m really disappointed that a verdict was not reached, because I feel strongly about our innocence.” Charlie Stillman told reporters, “I didn’t spend six months of my life and put my client on the stand for two days of direct and six days of cross for a mistrial. We came to win.”
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How much did the mistrial cost? What was the value of six months of time, effort, and the resources of all involved, including the cost to the taxpayers of New York? How much? Tens of millions of dollars? Probably more. Who should be indicted for grand larceny for wrongfully taking those millions?

Sixteen

People v. Kozlowski II

After Justice Obus declared the mistrial in April of 2004, Kozlowski retreated to his home in Florida, but traveled to New York regularly for trial preparation meetings with his legal team. The anticipation of yet another lengthy trial weighed on him. For more than two years, his energy, attention, time, and resources were by necessity focused solely on resolving his legal issues. Adding to his anxiety were financial concerns. Kozlowski’s assets had been frozen since the day he was indicted in September of 2002. All of his expenditures continued to be overseen and subject to the approval of Manhattan Assistant District Attorney (ADA) Amyjane Rettew.
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A lot of time had passed since he was indicted, and even though he had already lived through one criminal trial, Kozlowski continued to find his circumstances surreal. It was inconceivable to him that he had to defend himself against serious felony charges. Again.

People v. Kozlowski II

Supreme Court, New York County

Manhattan Criminal Courthouse, 13th Floor

100 Centre Street

New York City, New York

January 18, 2005

The second trial began on January 18, 2005, nearly ten months after Justice Obus declared the first a mistrial. Kozlowski made the trip to New York on the Sunday evening before the start of the trial on Tuesday morning. He stayed in Midtown Manhattan and on Monday evening, the evening before the trial began, Kozlowski walked to a grocery store on Third Avenue where he by chance ran into Ruth Jordan, the “OK” juror from the first trial. Because of the part she played in the mistrial, Kozlowski knew her face. Jordan recognized him immediately. Dennis Kozlowski
and Ruth Jordan were strangers who played significant roles in each other’s lives. He said their interaction was short and friendly, and certainly an unexpected and bizarre encounter on the eve of his second trial.
2

The next morning, Kozlowski awoke to a freezing cold January day. He rode to the courthouse with his daughter Sandy, as the two would do every morning for the duration of the trial. Unlike the first trial, Sandy was now one of her father’s attorneys. Or at least she
tried
to be a member of his defense team. Sandy Kozlowski was a 2003 graduate of Columbia Law School and was admitted to the bars of both New York and Massachusetts. Kozlowski thought his daughter would bring passion and fire to the defense. “She didn’t get paid. She moved to New York and participated in my defense full time,” Kozlowski said. “She got along well with the other members of the legal team.”
3
Stephen Kaufman continued to serve as lead counsel for Kozlowski, assisted by Jim DeVita, Austin Campriello, and Sandra Kozlowski.

Sixth Amendment Right to Counsel of Choice

The Manhattan DA strongly objected to Sandy’s role as her father’s attorney, fearing her presence would make Kozlowski sympathetic to jurors. In response to the DA’s objection, Justice Obus prohibited Sandy from sitting at the defense table with the rest of the attorneys. Kozlowski recalled that “ . . . Sandy couldn’t sit in the well.”
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Was it unexpected that Kozlowski’s daughter, an attorney licensed in the State of New York, would appear in court on her father’s behalf? Why would the jury have felt sympathy? It seems her participation in the case would have been expected. As is true in most families, Dennis Kozlowski trusted his daughter’s advice more than that of any other attorney. It would have been far more surprising if she had
not
been on her father’s legal defense team.

Justice Obus’s concession to the Manhattan DA’s request on this issue is troubling. United States Supreme Court Justice Antonin Scalia, when penning the opinion of the Court in
U.S. v. Gonzalez-Lopez
in 2006, summarized the long-recognized right under the Sixth Amendment to the U.S. Constitution of the criminally accused to be represented by legal counsel of choice:

The Sixth Amendment provides that “[i]n all criminal prosecutions, the accused shall enjoy the right . . . to have the Assistance of Counsel for his defence.” We have previously held that an element of this right is the right of a defendant who does not require appointed counsel to choose who will represent him. See
Wheat v. United
States,
486 U. S. 153, 159 (1988) and
Powell v.
Alabama,
287 U. S. 45, 53 (1932) (“It is hardly necessary to say that, the right to counsel being conceded, a defendant should be afforded a fair opportunity to secure counsel of his own choice”). The Government here agrees, as it has previously, that “the Sixth Amendment guarantees the defendant the right to be represented by an otherwise qualified
attorney whom that defendant can afford to hire, or who is willing to represent the defendant even though he is without funds.”
Caplin & Drysdale, Chartered v. United States,
491 U. S. 617, 624–625 (1989).
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During jury selection at the beginning of the second trial, ADA Owen Heimer, who took the lead role for the prosecution during the second trial, expressed strong feelings about Kaufman identifying Sandy Kozlowski in the courtroom. He characterized her involvement with her father’s defense as one of Kozlowski’s “unwarranted appeals to sympathy.”
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In response to the prosecution’s objections, Kaufman explained, “ . . . I just want your Honor to know that Ms. Kozlowski, who uses that name, is a graduate of Columbia Law School, has been working in this matter for the last four, five months.
7
At the time of her father’s second trial, Sandra Kozlowski was a qualified, licensed attorney in the State of New York.

In addition to objecting to her presence at the defense table, the ADA who approved and disapproved expenditures from Kozlowski’s frozen assets refused to pay attorney Sandra Kozlowski legal fees for her services. Kozlowski’s defense attorney Austin Campriello explained the situation to the court:

I can simply advise the Court, when Ms. Kozlowski first indicated a willingness to work with us I discussed the matter with the prosecutor who was supervising Mr. Kozlowski’s financial affairs, because frankly my initial thought was, that since she is a graduate of Columbia Law School, since she is a lawyer, that since she would be working that typically under those circumstances one gets paid and I discussed it with the prosecutor. The prosecutor has been using restrained assets to pay us. I was told that was an absolute non-starter. There was some shock expressed that I would even consider it and obviously in light of that Ms. Kozlowski is not being paid, has not been paid, will not be paid.
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An individual accused of crimes has a right under the Sixth Amendment to legal counsel of choice. Both the Manhattan DA and the New York Supreme Court seemed to cross that well-defined line. The DA refused to pay Sandra Kozlowski for her legal services, thereby constructively preventing Dennis Kozlowski from the representation of his counsel of choice. When the court prohibited Sandy Kozlowski from sitting at the defense table with her client, who also happened to be her father, his Sixth Amendment rights were once again violated. The U.S. Supreme Court has not limited the Sixth Amendment right to counsel of choice to attorneys who are
not
relatives.

* * *

People v. Kozlowski and Swartz II
was conducted in the same courtroom as was the first trial. Kozlowski was far too familiar with the aging, austere room on the
thirteenth floor of the Manhattan courthouse. It must have been difficult for everyone entering the courtroom that cold, gray January morning to begin again what promised to be another long, exhausting, complex trial. Justice Obus, the ADAs, defense attorneys, and Defendants could only hope that the second time around, there would be a resolution.

Between the two trials, Kozlowski suggested that his defense team consult with a public relations expert to help counter the information prosecutors would undoubtedly provide to the media throughout the second trial, as they did during the first trial. Kozlowski explained, “Every day during the first trial, the DA held a press conference and would spin what happened in court that day. I would leave court feeling good that we had a positive day, but the next morning I would read articles that were completely inaccurate. The articles described nothing like what had actually happened in the courtroom the day before.”
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Kozlowski suggested Howard Rubenstein, who is known to New Yorkers as the “dean of damage control.”
10
Kozlowski’s attorneys, however, did not think it necessary to address the media campaign that very quickly transformed Kozlowski from an admired, successful CEO into a free-spending,
nouveau riche
white-collar criminal. Kozlowski said, “Stephen Kaufman thought we shouldn’t talk to the press even though the DA talked to the press every day. It was a mistake,” Kozlowski admitted.
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Professor Christo Lassiter has studied the media’s impact on criminal justice, specifically, the power of the media during and after high-profile criminal trials. Lassiter observed that “[t]he failure of the press is the dwindling significance of hard-hitting factual analysis. Compounding this problem is that the trend towards news analysis and commentary in lieu of factual reporting is dominated by personality, not by intellect. The current devolution of news to trendy spinmeisters leaves the public spinning in a sea of loosely-based, agenda-driven rhetoric
where facts do not matter.
” Lassiter pointed out that journalists “wear their demographic bias on their sleeves” and noted that “[b]y appealing to the segment of the public to which they cater, members of the press
help to create the news they wish to report
—a form of journalistic activism not unlike judicial activism in pernicious effect.”
12
Lassiter said of the decision made by Kozlowski’s attorneys, “It is always a mistake not to talk to the press.”
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Kozlowski also suggested to his legal team between the trials that they hire Dr. Phil McGraw as their jury consultant. Kozlowski’s friend Richard Trutanic recommended McGraw, and Kozlowski believed it was a good idea “but Steve Kaufman said ‘no,’” he explained. Instead, they used the jury consultants Mark Swartz’s attorneys recommended. “The consultants called registered voters in New York to get a statistical sample—they asked about preconceived notions about me and Mark. I thought it was a foolish waste of time,” Kozlowski said. “And of money.” Kozlowski wanted the smartest jurors they could possibly get. “Mark Belnick was acquitted a
few months before our second trial,” Kozlowski explained, “and he had a very smart jury.”
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* * *

Like the first trial, the second began with a variety of housekeeping matters between defense counsel, prosecutors, and the court. There were arguments about the DA’s delay in giving evidence to the defense teams. The delayed production prompted defense attorneys to question whether the DA’s office was withholding other evidence to which the defendants were entitled.
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The Defendants fought throughout the trial, usually unsuccessfully, for the right to access evidence that they believed contained both
Rosario
material and
Brady
material.

Rosario
material is evidence that must be produced during discovery, the time period prior to trial during which both sides are required to share the evidence they possess. The
Rosario
rule was established in New York in a 1961 decision of the court of appeals in
People v. Rosario.
Under
Rosario,
each party is required to produce any written or recorded statements of their witnesses that relate to the testimony that will be given by those witnesses during the trial.
16
Brady
material is evidence in the possession of prosecutors that is exculpatory, or would reduce punishment if the defendant is convicted. This evidentiary rule was established in 1963 by the U.S. Supreme Court in
Brady v. Maryland.
17
Disagreements over evidence occur in nearly every criminal trial. But in both trials in which the People of the State of New York prosecuted Dennis Kozlowski, evidentiary issues were critical, and the rulings almost certainly impacted the outcomes of the trials.

In a
Law & Order
episode titled “Under the Influence,” the fictional Manhattan DA’s office hid and withheld exculpatory evidence in order to convict a defendant of an excessively harsh charge “to make an example of him.”
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In the television show, both the DA and the judge had political agendas and they used the defendant’s case to further their causes, without regard for the rights of the accused.

Sometimes life imitates art. Both Kozlowski and Swartz argued throughout the trials, and after both, for access to critical evidence that would likely have exculpated them. They were repeatedly denied access to that evidence. As in the television drama, it was also evident that the Manhattan DA had a political agenda—the prosecutor known for his aggressive prosecution of white-collar criminals no doubt wanted his pound of flesh during the Enron fallout. Eight years after Kozlowski and Swartz were convicted, former Manhattan DA Robert Morgenthau said of the case: “It sent a message to a lot of people.”
19

Throughout his career, Morgenthau was both applauded and criticized for his aggressive pursuit of corporate criminals—he was even called the father of white-collar criminal prosecutions. Gary Naftalis, a former Assistant DA in Morgenthau’s office, told the journal of the American Bar Association that Morgenthau “talked about crime in the suites being as important as crime in the streets.”
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The
Manhattan DA was a seasoned eighty-five-years-old when the second trial of Kozlowski and Swartz began.