Saturday, March 31, 2007

Ethics in the Mirror



Throwing Stones

Our beloved foe
CEO with stolen dough
Your teachings survive


Gadabout would like to address the topic of ethics in American society. I’ve included a couple of AP articles (both abridged) related Tyco’s CEO Dennis Kozlowski's abuses that led to his conviction. The first was published after his conviction in 2005, and the second is a recent story where Kozlowski claims innocence and jury bias. Take a moment to familiarize yourself with some facts of the case:


Updated: 8:44 p.m. ET June 17, 2005
NEW YORK
- In the wave of prosecutions against business executives that followed the boom of the late 1990s, L. Dennis Kozlowski came to be portrayed as the poster child for corporate excess.
The former Tyco CEO’s first trial last year was a parade of eye-popping largesse: an $18 million Manhattan apartment, a $6,000 shower curtain and an infamous $2 million party on the island of Sardinia in the Mediterranean.
Prosecutors said Kozlowski financed the lavish lifestyle with money he pillaged from Tyco — and on Friday, a jury convicted him and another executive of looting the company of $600 million.

Imprisoned ex-Tyco CEO Kozlowski claims innocence, jury bias
By Linda A. Johnson, AP Business Writer | March 22, 2007
TRENTON, N.J. --L. Dennis Kozlowski, imprisoned for looting millions from Tyco International, the conglomerate he once headed, claims he's not guilty and that jurors convicted him because of his huge salary.
Kozlowski, now 60 and serving an 8- to 25-year prison sentence, makes the comments in an interview set to air Sunday on the CBS program "60 Minutes," according to the network.
"I was a guy sitting in a courtroom making $100 million a year," Kozlowski tells reporter Morley Safer in his first network TV interview since going to prison. "And I think a juror sitting there just would have to say, `All that money? He must have done something wrong.' I think ... it's as simple as that."
Kozlowski became a poster boy for corporate greed amid revelations about his lavish spending -- including a $30 million Manhattan apartment, paintings by Renoir and Monet on which he evaded sales tax and a $2 million toga birthday party for his much-younger wife, who reportedly asked for a divorce in a prison visit with him last year. That lifestyle might have swayed the jury, Kozlowski told a reporter just before his sentencing in September 2005.
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Wow. He still believes that he is innocent. Isn’t that interesting! Okay, let’s have an understanding on where Gadabout stands on the issue of CEO pay--$100 million big ones is excessive, plain and simple. Kozlowski is not a Bill Gates. He did not engender a vision for new technologies that moved the world forward in a dynamic way. He ran a corporation. He attended business school, moved up a corporate ladder, lied, stole from share holders and ruined thousands of lives.

Thousands of everyday ordinary citizens are incarcerated every year in this country for a lot less. Lesser crimes are tried for mail fraud, identity theft, grand larceny and so forth and we look upon those criminals and mostly agree that they need to do some time for their wrong doings. Kozlowski believes that his wealth biased the jury in determining his guilty verdict. I suppose that is possible, but I don’t think it would sway a jury anymore in his case than for someone that abused a child or stole an identity and bought a new Cadillac from a grandmother’s retirement account.

Along with high CEO pay, is an unspoken demand by the American public for ever higher ethical standards and conduct. If an individual is to be remunerated at levels unachievable by 99% of the general population and essentially lifts a family into an exclusive Royal Class of citizenship, then it is demanded that their ethical behavior is transparent and above reproach. Do we agree on this?

Okay, Kozlowski was found guilty, imprisoned, fined and is whining about it. I’d be rather upset with myself too if I was sitting in the slammer looking at another five to ten years behind bars. The question for all of us is what we, as individuals, can learn from this unfortunate lesson of deceit?

How are you living and conducting your lesser life? Yes, I am talking about our tiny, insignificant lives of the middle class. If we are going to pass judgment on our friend Kozlowski, throwing a first stone, what are we doing to achieve high standards at home? Do you file honest tax returns, or do you bend the rules a bit to minimize your payments? Have you ever sold a house and covered up a latent defect to avoid the costs of repair? How about a car that you once sold and high-fived yourself after depositing the check? Are you honest with your family and friends? Talk to me about your resume!

I am very confident that most Americans should reevaluate their own personal lives as related to ethical behavior. Like many, I have always found enjoyment in throwing the first stone, but maybe the lessons of Dennis Kozlowski’s evil deeds will assist me in keeping a straight course in the future. Thanks, Dennis!

5 comments:

The Melvin said...

Dude, thanks for the link. This has been some of the best reading I've done all semester.
I'm not familiar enough with the facts to says who is write or wrong. I can see where a jury could punish someone for being too successful. Just look at your next blog entry. Dennis became the face of all that is wrong with corporate America. To top things off, class warfare has been a very successful strategy of one our two political parties for some time now. Why wouldn't a group of meaningless jurors take the opportunity to sucker punch the bad guy?
Anyway, dude, great to hear from you. I'll keep reading as long as you keep writing.

The Melvin said...

I have no idea why I have the wrong form of the word "right."

Gadabout Jack said...

Young melvin...it is great to hear from you! I think Kozlowski would have been found guilty by a jury composed of the top 1 percent wage earners in this country. He is whiny little punk who got caught. Screw him.

Anonymous said...

Gadabout,

What exactly is your definition of "fair pay?"

Gadabout Jack said...

Gadabout has a hard time with this and someone is calling my bluff regarding "fair pay." Okay, if the company is making money for its shareholders, and the CEO is not ripping off and raiding accounts, I would say about 100 times the base salary for middle managers. So, I guess about $10 million for a big time S&P 100 entity. I would like to see some mutual funds sprout up that base stock selection on pay scales and total compensation packages.