Sunday, August 24, 2008

Free Dennis

Free Huey? No it's 2008.

On the eve of the Democratic convention there will be no echoes of the 60's but Free Dennis could be one a strange one. Back in those early 2000's when the authorities that be were crushing the "corporate villians", making reputations and handing out severe sentences, one Dennis Kozlowski was given a sentence of 8 and one third to 25 years for fraud. He was CEO of Tyco. His behavior in general was outlandish and not attractive, but his sentence is what is criminal. It was the Spitzer, northeast Democrat mentality, the one that crushed the securities research industry to great damage and villified legitimate legends on Wall Street for political gain. It was not just New York State of course. The Feds jumped in all over the place, certainly killing the estimable and misguided gentleman Ken Lay in Texas and putting the screws to some other real crooks like Skilling and Fastow(Enron), as well as a former high school basketball coach turned into an over his head accounting illiterate hustler named Bernie Ebbers(Worldcom).

But let's get back to Dennis Koslowski. He was convicted in New York State court and is in Attica, the most notorious prison in New York, home to the worst of the worst. His crime, well, there are two apparently. First, he was convicted of having manipulated salary and bonuses that were too high and that the victims were shareholders. Second, he was convicted of having artwork shipped for purchase to Vermont and then sent to New York to avoid sales taxes. OK, one count---a technical question as to whether the Board of Tyco actually approved or did not approve that he had exceeded his power in compensation(it's clear that he manipulated higher compensation but it could appear that he did so with Board approval, contract law that is questionable jury material), and second count---guilty, New York State tax evasion, but arranged by him?, but let's just say guilty.

His supposed parallel partners in crime, whether the ones mentioned or former Wall Street or dot.com folks, are all in Federal prisons, no lavish life but not the notorious Attica. The fact is that Koslowski's biggest crime was acting arrogantly and displaying wealth obscenely, not unlike Donald Trump but within a public corporation that was widely held and not under his absolute control. Trump has a television show and Koslowski is in solitary. Tyco did not fail like Enron or Worldcom or some random dot.coms, in fact it's fine. The employees have their jobs within the normal ebb and flow of corporate culture, split off activity and m&a. The stock price fell as the premium for certain special conglomerates like GE and Tyco was wiped out in the early 2000's but it's still around and being managed, and even today compare the 15 year track record to GE and see what you get. It's fine. Enron and Worldcom are of course gone.

This is one of those prosecutorial victories for ego's sake that no one wants to revisit, and because of Koslowski's over the top behavior there is no benefit for any politico, and in New York the court system is 100% politics above all else, to step forward and correct this injustice.

It is unlikely as the court system is based on resentment and political benefit. But hey, he's in his heart a good man, salt of the earth, went astray but broke laws that should get six months outside of the realm of publicity for the pols, and he should be released now. Put him in a halfway house and give him a job helping to manage a soup kitchen or charity. Within a few months that charity would be running like never before. I'm not kidding.

Free Dennis.

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