Tyco CEO Dennis Kozlowski CBS 60 Minutes Prison Interview
Summary
TLDRThe script follows the downfall of Dennis Koslowski, former CEO of Tyco, convicted of looting millions from the company. Once a powerful executive with lavish lifestyles, including a $2 million party and a $6,000 shower curtain, Koslowski now serves 8 to 25 years in prison. He reflects on his rise from humble beginnings, the excesses that led to his conviction, and the emotional toll of losing wealth, power, and personal relationships. Despite maintaining his innocence, Koslowski faces the harsh reality of prison life, focusing on his appeal and introspection.
Takeaways
- 📉 The video discusses corporate scandals, with a focus on Dennis Koslowski, former CEO of Tyco, who was convicted of grand larceny, conspiracy, and securities fraud.
- 👨⚖️ Koslowski was sentenced to 8 to 25 years in prison for using Tyco's resources as his personal piggy bank, notably spending over a million dollars on personal luxury items.
- 💸 Notorious examples of his excesses include a $6,000 shower curtain and a $2 million birthday party, symbolizing the extravagant misuse of company funds.
- 🛫 Koslowski's former lavish lifestyle included private jets, luxury mansions, and expensive art collections, including works by Renoir and Monet.
- 👨👩👦👦 The video touches on how Koslowski came from humble beginnings, working his way up to the CEO position of Tyco, turning the company into a $40 billion conglomerate.
- 💼 While Koslowski maintains his innocence, the jury found him guilty, and he believes his wealth and timing with other corporate scandals like Enron influenced their decision.
- 🕵️♂️ The scandal intensified when it was revealed Koslowski had evaded sales tax on expensive art purchases and had unauthorized bonuses and interest-free loans.
- 📉 Koslowski expresses frustration being compared to figures like Bernie Madoff, insisting Tyco's downfall was not a result of a financial scam but a payment dispute.
- 👥 Koslowski admits that many of the people in his life were only there for his money and power, reflecting on how most of his friends abandoned him after his conviction.
- ⏳ Now in prison, Koslowski earns $1 a day doing menial tasks and is focusing on his appeal, while also coping with personal losses, including his wife divorcing him.
Q & A
What major corporate scandal is discussed in the transcript?
-The transcript discusses the scandal involving Dennis Koslowski, the former CEO of Tyco International, who was found guilty of misusing the company's financial resources for personal gain.
What were some of the luxury items Dennis Koslowski purchased with Tyco's funds?
-Dennis Koslowski purchased a $6,000 shower curtain, a $15,000 doggy umbrella stand, a $2 million birthday party for his wife, and a $19 million apartment decorated with $1 million worth of items.
How did Dennis Koslowski rise to the position of CEO at Tyco?
-Dennis Koslowski started at Tyco as an accountant in a small New Hampshire manufacturing company, earning $28,000 a year. He worked his way up, becoming known as 'Deal a Day Dennis' for his aggressive acquisition strategy, ultimately transforming Tyco into a $40 billion conglomerate.
What led to Dennis Koslowski's downfall and subsequent conviction?
-Koslowski was convicted of 22 counts of grand larceny, conspiracy, and securities fraud. He was accused of using Tyco's resources for personal expenses, granting himself unauthorized bonuses, and evading over a million dollars in sales tax on art purchases.
What was the public reaction to the luxury items purchased by Dennis Koslowski?
-The public and media reacted with outrage and ridicule, particularly highlighting items like the $6,000 shower curtain and the extravagant birthday party for his wife. These details became tabloid headlines, mocking his taste and greed.
How does Dennis Koslowski view his own actions and the jury's verdict?
-Dennis Koslowski maintains that he is not guilty and believes there was no criminal intent in his actions. He argues that everything he did was authorized and that the jury misunderstood his case due to the timing of the Enron and WorldCom scandals.
How did the Tyco board contribute to the situation, according to Koslowski?
-Koslowski suggests that the Tyco board gave him almost unlimited authority, and the lack of proper oversight contributed to the blurred lines between his personal and company expenses. He believes this was a major factor in the case against him.
What impact did the scandal have on Dennis Koslowski's personal life?
-The scandal led to the end of many of his personal relationships, including his marriage. He admits that most of the people in his life were there for his wealth and power, not for who he was as a person.
What was Dennis Koslowski's response to Donald Trump's criticism of his behavior?
-When Donald Trump criticized his behavior as 'tacky,' Koslowski dismissed it, remarking, 'from Donald Trump… he would know.' This response indicates his disdain for Trump's comment, highlighting the irony in the criticism.
How does Dennis Koslowski spend his time in prison, and what are his reflections?
-Koslowski spends his time in prison focused on his appeal, earning a dollar a day mopping floors, and reflecting on his life. He acknowledges the harsh reality of his situation, often wishing it was just a dream, and mentions that he has time to reflect on his spiritual side.
Outlines
💼 Corporate Scandals and Dennis Koslowski's Fall from Grace
This paragraph opens by referencing a wave of corporate scandals, highlighting cases such as Enron and Dennis Koslowski, the CEO of Tyco. Koslowski was convicted of using Tyco's funds for personal luxuries, such as a $6,000 shower curtain, and stealing over $100 million. Once a powerful CEO, Koslowski is now serving an 8 to 25-year sentence in prison, reflecting on his dramatic fall from a life of extreme wealth and privilege to that of a prisoner.
🔗 Life in Prison and Reflecting on Mortality
In this section, Koslowski speaks from Midstate Correctional Facility, where he now lives among murderers and drug dealers. Earning just a dollar a day for menial tasks, Koslowski reflects on how he never imagined this future. After a heart ailment, he decided to speak publicly, driven by a newfound awareness of his mortality. Though unable to discuss details due to an appeal, he maintains that the jury made a mistake, convicting him on 22 counts related to grand larceny, conspiracy, and securities fraud.
📉 The Downfall of a Powerful CEO
Koslowski is portrayed as the embodiment of corporate greed, compared to the fictional character Gordon Gekko from 'Wall Street.' Born in Newark, New Jersey, he worked multiple jobs before joining Tyco as an accountant. Through his aggressive acquisition strategy, he transformed Tyco from a $40 million company into a $40 billion conglomerate. His earnings became astronomical, and wealth served as a 'way of keeping score.' This vast fortune allowed him to indulge in luxury, owning homes across the country and purchasing expensive art.
🎨 Art, Luxury, and Tax Evasion
Koslowski's lavish spending included $13 million in art, but this led to accusations of tax evasion when he shipped the artwork to Tyco’s tax-free office in New Hampshire before transporting it back to New York. His resignation as CEO in 2002 was followed by a damning report from Tyco’s board. His excessive spending—such as a $15,000 doggy umbrella stand—became tabloid fodder. The $6,000 shower curtain became the symbol of his greed. Koslowski claims minimal involvement in the apartment’s decoration, but the media and public saw it as emblematic of his downfall.
🎉 A Lavish Birthday Party and Corporate Misconduct
One of the most infamous events associated with Koslowski was his wife’s $2 million birthday party in Sardinia, featuring togas, Jimmy Buffett, and extravagant decorations. Koslowski justified the expense as partially work-related, leading Tyco to cover half the cost. Despite the over-the-top spectacle, Koslowski was more embarrassed than anything, especially when it was publicly criticized by Donald Trump. But beyond these 'tacky' displays, Koslowski faced far more serious charges of corporate theft, accused of pocketing millions through unauthorized bonuses and stock sales.
⚖️ Theft and the Legal Battle
Koslowski and his second-in-command were charged with stealing $170 million and misrepresenting Tyco’s finances. Koslowski claims he acted within the company's policies and that the board was aware of his actions. He insists there was no intent to commit fraud, pointing to the company’s records as proof. Though he testified in court that his loans were legitimate and repaid, the jury disagreed. Koslowski argues that he was a victim of circumstances, swept up in the post-Enron era when corporate leaders were easy targets for prosecution.
🏦 Blurred Lines Between Corporate and Personal Wealth
Koslowski admits that the lines between his personal wealth and Tyco’s assets may have blurred, but he insists that he followed the same procedures as his predecessors. However, with the head of compensation, who could corroborate his version of events, no longer alive, he faces an uphill legal battle. Koslowski believes his vast wealth made him an easy target for the jury, who were unable to separate him from other high-profile cases like Enron. Despite his conviction, Tyco continued to thrive as a successful company.
🤔 Reflecting on Wealth, Power, and Loss
Koslowski feels unfairly grouped with infamous fraudsters like Bernie Ebbers and Ken Lay, pointing out that Tyco’s success continues. He is frustrated that the public perception of Tyco’s failure due to his actions is incorrect. While Tyco remains strong, Koslowski's personal fortunes have collapsed. He has been ordered to pay nearly $200 million in fines and restitution, and it is uncertain whether he will have any money left upon his release. In prison, Koslowski is isolated, with most of his former friends abandoning him. His marriage is also ending in divorce.
⏳ A New Life Behind Bars and Spiritual Reflection
Koslowski is resigned to his fate, reflecting on his isolation and the harsh realities of prison life, where he frequently wakes up in the middle of the night under the constant light. Though he tries to stay positive, he is acutely aware of the vast changes in his life. He acknowledges that prison has provided time for spiritual contemplation, though he keeps these reflections private. With few friends left, he spends his time focused on his appeal and adjusting to a drastically different life.
Mindmap
Keywords
💡Corporate Scandal
💡Tyco International
💡Grand Larceny
💡White-Collar Crime
💡Judicial System
💡Sales Tax Evasion
💡Luxurious Spending
💡Board of Directors
💡Restitution
💡Social Status
Highlights
Dennis Koslowski, former CEO of Tyco, was found guilty of using the company's immense financial resources for personal use, including a $6,000 shower curtain and misappropriating millions of dollars.
Koslowski went from being a corporate titan who could charter private jets on a whim to prisoner number 05A482, serving an 8 to 25-year sentence.
In prison, Koslowski earns a dollar a day working jobs like mopping floors and serving food to inmates.
He reflects on his mortality after being hospitalized with a heart condition, which prompted him to speak publicly for the first time since his conviction.
Koslowski maintains that he believes in the judicial system but argues that the jury got his case wrong.
His conviction was part of a larger wave of corporate scandals, including Enron and WorldCom, which were making headlines at the time.
Koslowski started at Tyco as an accountant, earning $28,000 a year, and eventually turned the company into a $40 billion conglomerate through aggressive acquisitions.
He made over $100 million in a single year as part of Tyco's pay-for-performance culture, a testament to his financial success.
Koslowski's lavish spending, including $30 million for a mansion and $16 million for a vintage yacht, earned him a reputation for excess and greed.
A $2 million toga-themed birthday party for his wife, which included extravagant elements like an anatomically correct cake, became infamous and was partly billed as a corporate expense.
The prosecution accused Koslowski of stealing $170 million and pocketing an additional $430 million through the sale of company stock while lying about Tyco’s financial condition.
Koslowski claims that all his actions were authorized and transparent, with no criminal intent or hidden documents.
He believes his conviction was influenced by public outrage during a time when corporate greed was under intense scrutiny.
Tyco, despite the scandal, continued to thrive as a $60 billion company after Koslowski’s departure, further complicating the narrative around his downfall.
Most of Koslowski's friends abandoned him after his conviction, and his marriage also fell apart during his prison sentence.
At age 60, Koslowski reflects on his situation, admitting that many people in his life were only interested in his wealth and power.
Transcripts
a year ago or so the air was thick with
Tales of corporate Scandal lost Pension
funds big-time theft and even bigger
time prison sentences for the Enron gang
then there was Dennis Kowski CEO of Tao
who was found guilty of in effect using
Tao's immense Financial Resources for
what the prosecution described as his
own personal piggy bag you might
remember the $6,000 shower curtain and
stealing over aund million from the
company
well we wondered how the man who could
whistle up a corporate jet on a whim or
throw a $2 million birthday party was
doing in his reduced circumstances
what's it like to go from King of the
world to prisoner number 05
a482 serving 8 to 25 years behind bars
once again Dennis kazlowski
we caught up with Dennis Koslowski at
Midstate Correctional Facility in
Upstate New York how you doing I'm doing
okay guests include murderers drug
dealers and pedophiles and the odd
multi-millionaire in my wildest
imagination uh when I would project
myself into my late 50s and early 60s
where I would be or what I would be
doing if I make a list of a hundred
different places or 100 different things
here would never make that list he now
earns a dollar a day mopping floors and
slinging hash to his fellow inmates in
January Kowski spent a week in in
hospital with a heart ailment and got to
thinking you've not talked publicly up
till now why did you decide to do it
when I was in the hospital in January I
was outside the emergency room feeling
really uncomfortable frightened and
that's when I really made the firm
decision that I wanted to go through and
and and and talk to you at this time you
became aware of your own mortality very
much so and you didn't want to leave
this world without without at least an
opportunity to talk about my side of the
story to the said that I can talk about
it he agreed to speak with one
stipulation that we would not include
anyone else in this story because of an
appeal he'll not discuss the details of
his case but he will say I believe in
the judicial system I think all that
works but in this case the jury got it
wrong that jury convicted him of 22
counts of grand larsy conspiracy and
securities fraud his trials occurred in
the wake of a white colar crime wave
Enron world K and Martha
Stewart the newsound smelled blood
accused of looting his company of
hundreds of millions of dollars and
living the life of aasia at stockholders
expense he was the living breathing
version of wall Street's Gordon gecko
Greed for lack of a better word is good
up to a point what's puzzling is why
does a man who struggled so hard so
effectively to make it become so
careless or stupid or arrogant born in a
tenent on the wrong side of the tracks
in Newark New Jersey klosi worked his
way through school I played guitar in a
band I worked in a pharmacy I worked in
a car wash I had two or three jobs going
at any given time where you came from uh
there weren't that many options no no
growing up in north New Jersey at the
time you know you never thought of
yourself growing up to become a CEO he
started a tao then at a small New
Hampshire manufacturing company as an
accountant making $28,000 a year and
worked his way up to CEO he became known
as deal a day Dennis constantly
acquiring new companies and building Tao
from a $40 million company into a $40
billion conglomerate would like to
become all things equal $100 billion
company Wall Street could not get enough
of the young aggressive CEO he also
began making staggering amounts of money
among the top earning CEOs in the
country we had a pay for performance
culture at Tao so most of the money I
earned was in the appreciation of Tao
stock one year you made I think $170
million not sure 170 but I made over 100
million yeah well more money than 10
million here 10 million there who cares
but what's it like to earn that kind of
money it's a way of keeping score I
guess keeping score meant keeping up
with the Masters of the Universe $30
million to build a mansion in buar Raton
acquiring homes in Nantucket and
Colorado and just loose change $16
million for endeavor a vintage yard
wealth meant one thing social acceptance
another he and his second wife Karen
Mayo spent Millions on painting he
joined the board of the Whitney mum for
a p in New York he had Tao by a $19
million apartment and decorated it with
$1 million worth of stuff the poor kid
from Newark was stepping out on Fifth
Avenue would Dennis Kowski a few years
ago even contemplated going to Europe to
buy old Master paintings no absolutely
not you know it came with earning the
amount of money I was earning at the
time was it your idea or were you
invited to join the board of the Whit oh
I I it was not my idea at all I was
invited to join the board and I never
made a board meeting you were invited
because they like having really rich
guys on the board uh I assume it wasn't
for my knowledge of
art but it was art that would lead to
his undoing the Manhattan District
Attorney's office was investigating
galleries that were helping customers
avoid sales taxes kazlowski had
purchased $13 million worth of paintings
including a Renoir and money for the Tao
apartment but prosecutors said he had
some of them shipped to Tao's office in
New Hampshire a state without sales tax
they were then trucked back to New York
in 2002 the Manhattan District
Attorney's Office indicted Kowski for
evading over a million dollars in sales
tax and he resigned as CEO but that was
only the beginning The Tao board
investigated its CEO's behavior and made
public a report that was devastating
koslow's excesses were revealed in
excruciating detail decorations for the
New York apartment became classic
tabloid headlines mocking the CEO's
taste and his greed the $15,000 doggy
umbrella stand and the ultimate symbol
of his downfall that $6,000 shower
curtain the coverage was really
punishing that was horrible as overblown
as the coverage may have been you signed
off on those things I signed off on a
decorator here to uh decorate The Tao
apartment and beyond that that was my
involvement I the first time I heard
about that shower curtain the first time
was after I was out of the company and I
read about it in a newspaper and I it
was calling around asking where's the
shower Cur but to this day I wouldn't
know it if it fell on me
[Music]
so and then there was the 40th birthday
party for koslowski's wife Karen in
Sardinia
it was toga
Galore a 4-day festival of Flesh let's
rock Jimmy Buffett was flown in for the
music and guests were treated to a
special cake an anatomically correct
woman with exploding
breast the cost was over $2 million
since Kowski claimed it was in part A
work r
Tao footed half the bill was it
embarrassing for you though when they
played that tape kind of or going on
yeah horrible it was over the top look
at that I was taken back by it but I
smiled and worked my way through it
wanted the night end as fast as I could
Donald Trump called your behavior Tacky
Tacky Tacky from Donald Trump from
Donald Trump oh well he would know
so those excesses may have been tacky
but tacky doesn't send you to jail far
more serious was the allegation that
Koslowski literally stole money from Tao
he and his second in command Mark
Schwarz were charged with stealing $170
million and pocketing an additional 430
million through the sale of Company's
stock while lying about Tao's Financial
condition the prosecution accused Kowski
of granting himself unauthorized bonuses
and running hundreds of Millions ions of
dollars worth of personal expenses
through interest free Tao loan programs
no expense was too great or too small to
run through Tao none of this claims the
prosecution was authorized by The Tao
board and the jury agreed guilty but
he's still fighting I am absolutely not
guilty of the charges that were brought
upon me there was no Criminal Intent
here nothing was hidden there were no
shredded documents nobody was told not
to say anything uh all the information
the prosecutors got was directly off the
books and records of the company in the
trial Kowski took the stand and
testified that everything he did was
authorized he'd already repaid many of
the loans and claimed he was simply an
overworked executive who left the
details for underlings to handle I was
pushing the company and growing the
company and pushing all aspects of it to
continue to grow uh I just don't think
we put enough infrastructure in place to
support some of that growth yeah but
some of the some of the lines got
blurred uh some of the lines between
what was your money what was Tao's money
became very fuzzy I think I did
everything accordingly to U you know the
way the programs were outlined and the
way it was done by my predecessors was
there a situation where the rules got
lost more as I said we an appeal on this
and there's also civil litigation so at
this point in time I think we're
crossing the line here the Tao board had
given Kowski virtual card blanch and the
one person kazlowski said could clear it
all up the head of compensation was dead
whatever kazlowski did it was clear that
the Tao board was not exactly meticulous
in carrying out its oversight even so
Kowski believes he was a dead duck from
the start I was a guy sitting in
courtroom who made 100 million a year
and I think a juror sitting there just
would have to say all that money he must
have done something wrong I I think it's
just you know it's as simple as that
kazlowski says he was done in by bad
timing the Enron and Worldcom
catastrophes he feels that most people
believe that's what happened to Tao that
employees were left high and dry but Tao
remains a thriving $60 billion Company
the company went on after I left there
the company is alive say it's doing well
does it make you angry to be lumped in
with guys like Bernie abs and kenl that
just frustrated me to know end these are
companies that had financial and
accounting schemes that had major scams
that wasn't Tao you know this was a this
is a major paid dispute but the jury
didn't see it that way he was sentenced
to 8 to 25 years in ordered to pay
restitution and fines of almost $200
million it's unclear if he'll have any
money left when he's released in the
meantime he spends much of his time in
prison focused on his appeal he can
receive visitors on the weekends but he
says he has few friends left in the
final analysis most of the people were
close to you because of your power and
your wealth that's correct and and they
wanted to share in that that was
probably 90% of the people in my life
and they didn't give a DB about Dennis
kosowski the man that's a that's a hard
thing to uh to reconcile yourself to but
it did happen and it was not just his
friends who left him darling how about K
oh we're divorcing and uh you know
that's we're moving on uh so but was his
marriage like so many things in his life
all about money Welly we're in the
middle of divorce and agreement I'm not
going to say anything about that you
know at this time he says he tries to
stay positive he's 60 years old now and
the harsh reality of his predicament is
inescapable when you're sleeping in jail
you wake up all the time because there's
a light on all night so you kind of wake
up every hour wishing and praying and
hoping it was just a dream no but it's
not it's reality and it's you know where
you are often times guys get religion
inside does that happen with you there's
a spiritual side that you know I think
about and and reflect on from time to
time but that's personal and private num
within me yeah and you've got the time
to do it now I plenty of time yes that I
have
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