It's the same old story as CEOs fleece companies
Today's greedy CEOs living high off the hog at shareholders' expense all seem to think that they've invented imaginative new ways to get their hands on more than they're entitled to. We have to wonder if they're surprised when the Securities and Exchange Commission finally catches up to them and the feds come knocking at the door.
You can almost imagine Tyco International Ltd. head Dennis Kozlowski, the latest pig caught feeding at his company's trough, to protest "What do you mean I can't use company money to buy a $445 pincushion." Yes, among the millions of dollars in company money that Kozlowski spent to keep himself in the lap of luxury was a $455 pincushion.
A few years ago, there was an advertising campaign for an investment firm that had a celebrity investor explain why he wanted a brokerage firm he could trust. The ad's tag line was, "Because it's my money." Kozlowski and his cohorts seem to think it's their money. But it isn't.
Kozlowski and former chief financial officer Mark Swartz were charged last week with enterprise corruption and grand larceny for allegedly stealing some $600 million from Tyco. They face up to 25 years in prison on each of those charges if convicted.
Of course, the luxury items are only a small percentage of the wealth they are accused of pilfering from the company, but some of those items provide a special insight into Kozlowski's brazen nature.
Report lists abuses
A 234-page report prepared last week for Tyco directors said Kozlowski and other executives spent hundreds of millions of dollars to throw parties, speculate on real estate and other investments and buy homes and yachts.
Among Kozlowski's knickknacks were a $17,100 "traveling toilette box," a $6,300 sewing kit, a $15,000 "dog umbrella stand," a $1,650 notebook and the aforementioned $445 pincushion.
Do these guys have no sense of financial history? Hundreds of company officials have been caught over the years abusing their positions.
In the 1980s, Victor Posner provided a splendid local example in his rape of Sharon Steel Corp. Posner, a junk bond genius who managed to take over the steel company, even took the Norman Rockwell paintings off the walls at Sharon Steel's headquarters. He used company funds to provide himself and family members with extravagant homes and exotic automobiles. But eventually he was undone.
If Kozlowski had only been paying attention the day a teacher told the class that those who ignore history are bound to repeat it, everyone would be so much better off.