Tyco’s ‘piggy,’ out of the pen and living small
NEW YORK » These days, his shower curtain is from Bed Bath & Beyond in a nondescript white.
On the 35th floor of a two-bedroom rental overlooking the East River, L. Dennis Kozlowski lives with his new wife, Kimberly, in relative modesty — at least compared with his previous life as the extravagant chief executive of the conglomerate Tyco International.
Gone are the Renoir and the Monet. There are not any souvenirs from that iniquitous $2 million Roman-orgy birthday he threw in Sardinia in 2001, complete with Jimmy Buffett on guitar and an ice sculpture of "David" urinating Stolichnaya.
And there’s definitely no $6,000 gold-and-burgundy shower curtain — which landed him on the cover of The New York Post under the headline "OINK, OINK."
Ten years and a lifetime ago, Kozlowski reigned as the archetype of avarice. It is what helped lead to his conviction in 2005 for looting nearly $100 million from Tyco, for which he served 6 1/2 years in prison. That showy shower curtain was in his corporate residence on Fifth Avenue — paid for with Tyco funds — and came to symbolize a life of unabashed excess.
"I was piggy," he said during a series of recent interviews with The New York Times. "But I’m not that person anymore."
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Kozlowski was among the most caricatured of imperial chief executives in an epoch of white-collar crime that included Martha Stewart, Bernard J. Ebbers of WorldCom, and Kenneth L. Lay and Jeffrey K. Skilling of Enron. But unlike businesses plundered by other felons, Kozlowski’s Tyco has survived and thrived, today employing 57,000. By contrast, Enron and WorldCom became corporate corpses.
As of now, Kozlowski, 68, has paid his debt to society. State parole officials sent a letter last week informing him that for the first time in nearly a decade he is entirely free of penal supervision. And, in his view, he is finally able to talk about life in prison, about his last three years in Manhattan on work-release and parole, and about a future.
"I’ve waited for freedom for a long time," said Kozlowski, in his new apartment, beside a model of Endeavour, the 130-foot yacht built for the 1934 America’s Cup that he used to own.
He describes how he adores his wife (his third), treasures the time he spends with his grandchildren, happily endures half a dozen state-deferred root canals and appreciates a fresh avocado as only a free man can.
Once upon a time, Kozlowski had been celebrated on magazine covers as ambitious, imperious "Deal-a-Day Dennis," transforming a tiny New England manufacturer into a multinational worth more than $120 billion. Even as he was enriching himself, though, he was known at Tyco as a ruthless cost-cutter.
Then, it was over, swiftly. Kozlowski’s indictment for evading 8.25 percent sales tax on $14 million of artwork resulted in a broader Tyco internal investigation. That led to new criminal charges, for which he was convicted of taking unauthorized bonuses, abusing corporate loan programs, falsifying records, and conspiracy. In addition to jail, Kozlowski had to pay $167 million in restitution and fines.
Today, he acknowledges making mistakes. He was too invested in the game: In just his last four years at Tyco, he made more than $300 million, according to regulatory filings. "I’d go to Harvard Business School and get a standing ovation when I was introduced as the highest-paid CEO in the country," he recalled.
Even so, he maintains he was unfairly convicted, especially in light of how few big names were brought to trial in the most recent period of Wall Street malfeasance. "After 2008," he said, "nobody was prosecuted."
Though Kozlowski said he "served my time with some agony," two things seemed to get him through it. He tried to laugh at the absurdity of incarcerated life — and, fortuitously, he met his future wife.
Because Kozlowski was classified a high-profile inmate at Mid-State Correctional Facility, near Utica, he spent his time in "protective custody," away from an assortment of murderers, drug dealers and pedophiles. That meant he had his own 10-by-10-foot cell, but had to be in it many hours more than the typical prisoner.
Meals were brought to him. He couldn’t use the library or gym. "But I never feared for my safety," he said. "Nobody tried to stab me."
In fact, he said, other inmates in protective custody liked him. They called him "Koz," seeking him out for financial advice. He befriended Jeffrey Atkins, better known as the rapper Ja Rule (serving time on a gun charge), though Kozlowski said at first he had no idea who Ja Rule was. They met because Kozlowski was the "laundry czar." He also met Alan G. Hevesi, the former state comptroller incarcerated for corruption.
He was No. 05A4820 at Mid-State — what he refers to as "the gated community I used to live in" — and his life brightened when he met Kimberly Fusaro. She had known him in passing in the mid-1990s when she was a Wall Street trader. Nearly 15 years later, during a difficult divorce, she decided to write.
In her letter to Kozlowski, she asked if he needed anything. Visitors, he replied. His two daughters came regularly, as did former Tyco colleagues. She stopped by a month later, in September 2009 — and every weekend until his release. Twice a month — the prison limit — she sent him 35 pounds of avocados, tomatoes and peaches and whatever was growing in her garden at home in Massapequa, on Long Island.
After six months of visits, he said, "it got personal for us." They were allowed to hug when she arrived and when she left.
Because the parole board had vast discretion on how much of his sentence of 8 1/3 to 25 years he would have to serve, they had little idea when he might leave prison. Eventually he won work-release in January 2012 and parole two years later.
Initially Kozlowski lived at Lincoln Correctional Facility on West 110th Street, then on the East Side, with Kimberly, who is now 48. They were married a year ago. She wears a wedding ring from Neiman Marcus. "Cubic zirconium under $300, with free shipping!" she said.
"She’s the best thing that ever happened to me," Kozlowski said. "Ever."
After he won work-release, he indulged in a few Manhattan pleasures: E.J.’s Luncheonette for breakfast, Hatsuhana for dinner and 5 miles a day of walking. He learned how to take the No. 2 and No. 3 trains, near Lincoln Correctional. "Never," he said, "have I been so happy about riding the subway."
He spends most weekdays in a small Midtown office lent to him by a friend. He does what he calls "low-level consulting" on mergers and acquisitions. It is a far cry from Deal-a-Day Dennis, but it fulfilled a parole requirement to work. He also serves on the board of the Fortune Society, which assists ex-convicts.
Although Kozlowski would not discuss his remaining financial assets, he says he "owns no real estate" and is no longer fabulously wealthy. He still owns a "minuscule percentage" of the New York Yankees, but he said it produced no income and might be worth "in the hundreds of thousands of dollars."
Now that he is free, he hopes to open his own "small M&A advisory shop." He also plans more travel, because for the last three years, he had a 9 p.m. curfew and was not allowed outside the metropolitan area without the permission of his parole officer.
Perspective can be hard won. For Kozlowski, the path to equanimity went through disgrace in court, obloquy in the media, and loneliness in prison. What may be more telling is how much the public has forgotten. In another time, Kozlowski was everybody’s favorite corporate villain. Today in New York, people can’t quite place his face.
Kozlowski tells the story of a man who recently stopped him in Grand Central Terminal. "Hey," the man asked, "Aren’t you Steve Ballmer, the Microsoft guy who just bought the Los Angeles Clippers?"
Dennis Kozlowski smiled, turned and continued on his way.
Where are they now?
L. Dennis Kozlowski wasn’t the only corporate executive of his era who was convicted for fraud and other wrongdoing. Some of the others:
Mark H. Swartz, 54
Former chief financial officer of Tyco International
Convicted in 2005, with Kozlowski, of looting his company
Sentenced to 8 1/3 to 25 years, served chiefly in a medium-security prison in Wallkill, N.Y.
Discharged from parole on Jan. 21
Bernard J. Ebbers, 73
Co-founder and former chief executive of WorldCom
Convicted in 2005 of fraud and conspiracy
Sentenced to 25 years, which is being served in a federal prison in Oakdale, La.
Scheduled release date: July 4, 2028
Jeffrey K. Skilling, 61
Former chief executive of Enron
Convicted in 2006 of fraud and conspiracy
Sentenced to 24 years, later reduced to 14 years after an appeal and subsequent agreement with prosecutors
Serving time in a minimum-security federal prison in Montgomery, Ala.
Scheduled release date: Feb. 21, 2019
Kenneth L. Lay
Former chief executive of Enron
Convicted in 2006 of fraud and conspiracy
Died at 64 while awaiting sentencing (after which his sentence was vacated)
John J. Rigas, 90
Co-founder and former chief executive of Adelphia Communications
Convicted in 2004 of fraud
Sentenced to 15 years (later reduced to 12 years), which he is serving in a federal prison in Allenwood, Penn.
Scheduled release date: Jan. 23, 2018
Timothy J. Rigas, 58
Former chief financial officer of Adelphia Communications and son of John J. Rigas
Convicted in 2004 of fraud
Sentenced to 20 years (later reduced to 17 years), which he is serving in a federal prison in Allenwood, Penn.
Scheduled release date: June 3, 2022
Martha Stewart, 73
Founder and former chief executive of Martha Stewart Living Omnimedia
Convicted of lying to federal investigators
Sentenced to five months in 2004
Sent to a federal women’s prison in Alderson, W.V., and released in 2005
Source: Scheduled release dates taken from U.S. Bureau of Prisons records, though inmates can qualify for sentence reductions.
David A. Kaplan, New York Times
© 2015 The New York Times Company