NEW YORK -- Tyco International's former chief financial officer testified Tuesday that company directors gave then-chief executive officer Dennis Kozlowski a vote of confidence after learning he had approved an improper $20 million fee.
Mark H. Swartz, the former CFO, said the board blamed fellow director Frank E. Walsh Jr., who had demanded the fee for "investment banking" work he did to facilitate the 2001 merger of Tyco and CIT Group, a large commercial lender-financier.
At a board meeting in Boca Raton, Fla., on Jan. 16, 2002, Walsh was asked to return the fee, Swartz said. He said Walsh explained why he believed he should keep it and said "Adios" before leaving the meeting room and Tyco for the last time.
Prosecutors at Kozlowski and Swartz' corruption trial say payment of the $20 million without the board of directors' approval was illegal. Walsh was arrested, indicted and allowed to plead guilty and pay the money back last year without going to jail.
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http://www.newsday.com/news/local/wire/ny-bc-ny--tycotrial0217feb17,0,7680603.story?coll=ny-ap-regional-wire
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