Former CEO Testifies About Tyco Spending

A prosecutor turned the witness chair into the hot seat for former Tyco Chief Executive L. Dennis Kozlowski on Monday with questions about $12 million the company spent on decorations for Kozlowski’s New York apartment.

“I did not oversee this in the way I should have,” Kozlowski told Assistant Dist. Atty. Ann Donnelly of the 2001 renovations on the Fifth Avenue apartment in Manhattan. Prosecutors have cited them as an example of how they say Kozlowski and a co-defendant looted the company of $600 million to subsidize their lavish lifestyles.

Kozlowski drew laughter from several jurors and a few raised eyebrows when he said he did not like some of the decorations.

“I stuffed some in the closet,” he said. “Some of it was God-awful.”

The $12 million was in addition to $18 million spent to renovate the apartment, which was missing light fixtures and had paint peeling from the walls and worn floors, Kozlowski testified in Manhattan’s state Supreme Court.

Prosecutors have said furnishings at the apartment included a $6,000 gold-threaded shower curtain, a $2,900 set of hangers, a $4,995 custom-made blue-and-gold bed skirt and a $2,665 blue velvet pillow.

The testimony came in the second trial in New York of Kozlowski and former Chief Financial Officer Mark Swartz.

Kozlowski, 58, and Swartz, 44, are charged with grand larceny, falsifying business records, conspiracy and business law violations. The first trial ended with a mistrial in April 2004 when a juror received a menacing letter and phone call after some media reported her name during deliberations.The prosecutor noted for the jury that the renovations occurred at a time when Kozlowski had promised shareholders that the company was engaged in a relentless push to cut costs throughout the organization.

Donnelly asked him if the decorations were inconsistent with “a relentless push to cut costs.”

“That’s correct,” he answered.

He added: “It was overspent and I take responsibility for that. On the other hand, I thought it would appreciate in value.”