Ex-director grilled in Tyco trial

NEW YORK — Lawyers for two former Tyco International executives attacked a prosecution witness's credibility Monday, suggesting his testimony has been influenced by lawsuits accusing him of negligence while on Tyco's board of directors.

Richard Bodman, a former Tyco director who lives in Naples, Fla., admitted he is being sued and has been accused of "gross mismanagement," "violating his fiduciary responsibilities" and "wasting corporate assets."

"The charges are utterly false," Bodman, now a venture capitalist, told Austin Campriello, attorney for former Tyco CEO L. Dennis Kozlowski, during cross-examination. "There are some 75 lawsuits. I'm not guilty of anything. I don't feel guilty about it."

The lawsuits, filed mostly by Tyco shareholders, stemmed from charges that Kozlowski and Mark Swartz, Tyco's former chief financial officer, had stolen $600 million from the conglomerate.

Kozlowski and Swartz are on trial in Manhattan's State Supreme Court before Justice Michael Obus on grand larceny and enterprise corruption charges. They face up to 30 years in prison if convicted.

Prosecutors say the two stole $170 million from Tyco by hiding unauthorized pay and misusing company loan programs and made another $430 million on their Tyco shares by lying about the conglomerate's financial condition from 1995 into 2002.

Campriello showed Bodman internal Tyco documents that seemed to indicate that two loan programs that were meant to help employees pay their taxes or buy new homes did not specifically prohibit the money from being put to other uses.

"Isn't it true that if you told this jury that you knew KELP (Key Employee Loan Program) loans were being used for things other than taxes, you would be disadvantaged in that litigation?" Campriello asked Bodman, referring to the lawsuits against him.

Campriello also showed the witness a report of a July 17, 1997, meeting of Tyco's compensation committee, which was formerly headed by Bodman. The report said the $1 million bonus cap for Kozlowski and the $500,000 cap for Swartz had been lifted.

"If you told this jury that you knew that Dennis Kozlowski was getting millions and millions of dollars in compensation, you would be disadvantaged in that litigation, wouldn't you?" Campriello asked Bodman.

Bodman answered no to both questions.

Defense lawyers maintain that Kozlowski and Swartz earned all the money they received as executives of Tyco and the appropriate people approved it, including the company's outside auditor, PricewaterhouseCoopers.

PricewaterhouseCoopers, one of the country's largest accounting firms, has denied that it was negligent in its auditing of Tyco or complicit in any alleged fraud.

Tyco, which has about 270,000 employees and $36 billion in annual revenue, makes electronics and medical supplies and owns the ADT home security business. It is nominally based in Bermuda but has its operations headquarters in Portsmouth, N.H.