Testimony on Tyco’s Minutes

Tyco International Ltd. directors made decisions that weren’t reflected in the board’s minutes to avoid jeopardizing the offshore company’s tax status, former Chief Financial Officer Mark Swartz testified Wednesday.

Swartz, who with former Chief Executive L. Dennis Kozlowski is accused of pocketing $600 million from the company in unauthorized compensation and inflated stock profits, testified under cross-examination in New York state court that some executives feared that holding board meetings in the U.S. would cost Tyco the tax benefits of incorporating in Bermuda.

“Are you telling us that directors of Tyco, a public company, were meeting in the U.S. and making corporate decisions that were not being recorded in the minutes of Tyco?” Assistant Manhattan District Atty. Marc Scholl asked.

Swartz’s defense hinges on claims that Tyco directors approved bonus payments that he and Kozlowski are accused of taking.

He testified that decisions by the board’s compensation pay committee, which sets salaries and bonuses for executives, were among those not always recorded. Six former directors have testified the board never approved bonuses.