Archive for October 2003

Hangin’s Too Good Fer ‘Im

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As if the degradations of winter’s onslaught of snowmobiles weren’t enough, some yahoo from my state has driven his fucking pickup truck offroad near Lone Star Geyser, crashing pedestrian barriers and making doughnuts in fragile soil. He was also cited for having a loaded gun in his truck and driving with a suspended license. This is the kind of person Wyoming vigilantes should take out and beat the crap out of instead of gay people.
(The picture at right isn’t Lone Star, it’s from a nearby geyser we saw driving through Yellowstone in September. That’s why I’ve reacted so viscerally to this item.)

Film At 11

The Tyco/Kozlowski jury yesterday got to see edited video of the birthday party held for Mrs. Kozlowski on Sardinia. It’s available in two parts from the WSJ online Part 1 and Part 2 . (May or may not be accessible without a WSJ Online subscription - I’m sure it’s available elsewhere online). Shortly after the jury saw the film, prosecutors releaseed it to the media.
It’s no crime, of course, to throw a party. And it’s not hard to make attendees at any party look foolish by following them around with a camera. If Kozlowski hadn’t countermanded the assets of a publicly held corporation, and instead tapped his own bank account of after-tax earnings, it would be no big deal.
In an interesting aside, the film of the party may have a salubrious economic effect:

Some party planners say the video may be a boost to the recession-shocked industry, which has been in a funk since 9/11. John Baragona, publisher of Event Solutions, a trade magazine for event planners, praised the “creative use” of props to depict the Roman Imperial theme.

“That’s a real skill,” Mr. Baragona said. “Those are the kinds of things the event industry is proud of.”

Let’s Go Knittin’, Girls, The Boys Is Fightin’

Just when the nation was beginning to waver under the strain of riveting its attention on the California wildfires for agonizing 5-second spots in their evening newscasts, Los Angeles Laker teammates Kobe Bryant and Shaquille O’Neal provided refreshing relief with a media tiff to start the new NBA season.
The root causes of the wildfires will eventually be dealt with by more clearcut logging (and probably oil and gas exploration) and their effects ameliorated by GW’s desire to show the new Schwarzenegger administration how much it cares. You have to wonder what, however, can save a Laker situation in which Gary Payton is the calm bulwark against divisiveness.

A Moment of Reflection

Well, after that rant (it felt good, I won’t apologize), I stumbled across another article in the WSJ detailing an SEC proceeding against Kenneth Lay, wherein they charge “Mr. Lay has “demonstrated a frankly whimsical approach” to claiming his constitutional protection against self-incrimination” in refusing to produce documents.
So, there IS after all some desultory federal activity on this case (though I’m not prepared to wear sunglasses day and night so as not to be blinded by its incandescence), and I probably should shut up about any legal matters unless I am willing to take on the task of credible research to validate my rantings.
I have no desire to write a political blog, as others are covering that ground so well. My passions so far outstrip my expertise that it would just be a fucking mess. But, damn, this corporate piracy stuff really sets me off.

More Fun From the Tyco/Kozlowski Trial

This is starting to play like one of those fascinating traffic accidents you can’t drive by without slowing down and taking digital pictures. And the only place I’ve seen coverage, oddly enough, is the Wall Street Journal. I haven’t done an exhaustive search, but our local papers sure aren’t givin’ it up.
At some point on Tyco’s corporate calendar, there among the board meetings, financial forecasting meetings, supply chain process improvement projects, the merger with ADT and screw the government out of hundreds of millions of dollars seminar, the annual audit by wink-wink independent auditors was - what’s this? - Mrs. Kozlowski’s birthday party!!!
Yeah, she’s not an employee of Tyco per se, but her 40th birthday might just be a good opportunity to get some of Tyco’s customers and friends together for some business-oriented face time if they happen to be in the area. On fucking Sardinia.

“Among the charges is that they committed grand larceny by stealing $1 million or more by using Tyco funds for the Sardinia bash for Mr. Kozlowski’s wife.”

Like the dumbest of perps, these guys were fool enough to make a video of the frivolities. The case is being tried in New York state Supreme Court, and prosecutors are seeking to show the video to a jury. They’ll get to see a heavily edited version of it, apparently, but won’t get to see:

  • a still image of guests “mooning” the camera
  • an ice sculpture of Michelangelo’s David urinating vodka
  • the life-size, female-shape birthday cake with the exploding bosom for Mr. Kozlowski’s wife

Other hijinks at the party include:

  • a $250,000 musical performance by Jimmy Buffett (parrotts…Tyco…Get it?)
  • Guests were greeted by chariots and a gladiator, and by what Ms. Jacques described as “male models” dressed in skimpy bathing suits
  • In the days prior to the birthday party, she said, guests could indulge in activities such as horseback riding, water skiing, an elaborate scavenger hunt and rides on Mr. Kozlowski’s yacht — at no cost to them
  • After the party, Karen Kozlowski and some of her friends hopped aboard a Tyco jet to take a course at a cooking school near Florence

Kozlowski supposedly told the corporate travel planner (and former paramour), Barbara Jacques, that he would pay half of the cost of the party personally. Prosecutors allege that he paid no more than 30%. The Internal Revenue Service regulations for the deductibility of business expenses state that such expenditures must be “ordinary and necessary” to the business being conducted. Raise your hand if you believe that Tyco DIDN’T deduct the remaining 70% of the $2 million party expense from the already truncated amount of taxable income it reported on its U. S. tax returns.
The ostensible business purpose associated with the birthday party boiled down to “a planned board meeting for one of Tyco’s subsidiaries, to take place one afternoon. In contrast to the elaborate party arrangements, she said, the board meeting required only a conference room and speakerphone.” The rest was merely prologue and denouement.
One question that comes to mind is, Why is this being tried in a New York State court and not in a federal court, since it appears to cross state lines and national boundaries? I’m not a lawyer, so I have no idea. It would seem that, if New York State laws were broken, surely some federal offenses were committed as well.
And, if these corporate piracy cases are strictly the purview of state courts, why haven’t we heard how fervently Texas is pursuing Kenneth Lay?
Here might be a hint on both counts:

In cross-examining Ms. Jacques, one of Mr. Kozlowski’s attorneys, Austin Campriello, elicited testimony from Ms. Jacques that other Tyco functions also mixed business and social events. In particular, he had Ms. Jacques discuss the agenda for a 1999 “state of the company” meeting in Boca Raton. In addition to business, the event featured a speech by Colin Powell, dinner cruises and golfing.

Ah. The cerebral internationalist, Colin Powell, moderate influence and conscience of the neo-cons, who should have known, if anyone did, about the Bermuda tax scam and the level of crap surrounding this company. Seems like wherever you look in these corporate scandals, a member of this administration has left tongueprints on the trough.

Grapes of Wrath

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The trouble with those leafy, picturesque grape arbor thingies that provide shade from the pitiless summer sun (we had that here this year) is that they eventually, well, produce grapes. I didn’t realize just how prolific the vines growing over our deck had been until last week. Gorged on the heavy rains and nudged by some pre-winter gusts from the south, the whole structure partially collapsed one afternoon.
I spent Sunday “harvesting” the grapes from between the wire netting, drenching myself in their useless juice as I pitched them into a plastic garbage can, no bevy of doe-eyed virgins to assist my poor man’s bacchanalia.

Summer Ain’t Over Yet

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Eagle Harbor Tour

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After a week or so of steady downpour, we’ve had a few sunny, warm fall days just to let us know what we’ll be missing. I pried myself away from the Ohio State - Indiana game on Saturday and we hopped a ferry to Bainbridge Island on Puget Sound for some “yachting” (the kind of yacht you can fit two at a time on top of an Accord). As far as I’m concerned, it could go on like this forever.

Would You Do This Man For $1million?

A picture named Kozlowski_L-Dennis-DR38511272001201801.gifThe Wall Street Journal today details testimony in the trial of former Tyco CEO Dennis Kozlowski for “looting the conglomerate of $600 million in unauthorized pay and illicit stock sales.” I know it’s impolite to bring up the topic of corporate scandals now that the issue has been cured by some cosmetic changes at the SEC, but I just can’t help but marvel that we’re fixated on the Kobe Bryant and Martha Stewart trials while guys like Kozlowski and Kenneth Lay, with the enormity of their crimes, avoid the spotlight.
The testimony cited is that of Barbara Jacques, who started at Tyco in 1986 as a secretary, and shortly thereafter became “intimate” with Kozlowski.

Ms. Jacques’s testimony is considered important by prosecutors because she and the two defendants were the only people to receive portions of a $38.5 million “bonus” in August 1999. Prosecutors contend the bonus, in the form of forgiveness of loans outstanding from Tyco, was stolen because it wasn’t approved by the board — or reported on the defendants’ tax forms for that year. Mr. Kozlowski allegedly received $25 million of the bonus, Mr. Swartz $12.5 million and Ms. Jacques $1 million.

In contrast, Stewart sold 4,000 shares of stock for something like $60/share based on an insider tip. Yeah, she knew better, and probably did it because she suffers from a similar strain of hubris that the other guys do, and she should be punished the same as any shoplifter would be. But a hundred grand or so of ill-gotten capital gain is nowhere near the scale of piracy that Kozlowski and Lay practiced on their own companies, employees and shareholders. We’re not talking the same class of crime against humanity.
About a year ago, the son of a friend came to the door selling alarm systems. There had been a few breakins with violent results in north Seattle at the time, and I had been considering an alarm system anyway, so I signed up. Besides the door and window alarms, which may or may not actually be able to save you in the event of a breakin, they monitor smoke alarms and reduce your homeowner’s insurance a substantial amount, so there was a rational component to the decision.
It was only after I had agreed to a 3-year contract and had the equipment installed that I discovered that ADT, the alarm company, was one of the companies registered in Bermuda in order to avoid a substantial amount of US income tax. A company needs little more than a post office box in Bermuda to be “headquartered” there and engage in the tax scam. Not only that, but ADT had “acquired” Tyco (a much larger company) in what is called a “reverse merger” engineered by Tyco precisely to avail itself of ADT’s subtropical tax environs, and Tyco was dodging around $400 million a year in US tax as a result. A little connect-the-dots, and you can infer that money was flowing from the US Treasury into Kozlowski’s bank account, apartment decorating and art collection. (Kozlowski was prosecuted by the state of New York for fraudulently dodging sales tax on art he purchased there).
So now I’m paying $32 a month at least in part to fund Kozlowski’s crime, and I’ll be doing it for two more years. I feel kinda dirty.


The holiday season must be approaching, because those importuning catalogs have started arriving in the mail. Some of them are just plain WHACK. Here’s one that appeared in a wine-lover’s catalog. It’s a chessboard with pieces from the Lord of the Rings. One side has all the heroic characters, and the other side has the villainous ones. Each piece has a crystal shot glass or goblet (hob-goblet?) nestled in it, and the idea is that each time you claim a piece, you chug the shot therein. I dutifully choked down the Ring in the 70s, more because it was an excellent conversational gambit with women of the era than because it was a great piece of writing. If this game, even at its bargain price of $995.00 (down from $1,200.00) were available at a reasonable price, I might re-evaluate my lukewarm opinion.
Another sorta whack catalog came from . This at first glance looks like any of those cheery little things you get if you own a business with all these posters, postcards and screensavers with motivational aphorisms - you know, the puppies, kitties and darling babies doing plucky things. Except, upon closer inspection, the items from Despair, Inc. fall distinctly outside the party line of most corporate mission statements:

Meetings - None of us is as dumb as all of us
Dysfunction - The only consistent feature of all your dissatisfying relationships is you.
Adversity - That which does not kill me postpones the inevitable.
Despair - It’s always darkest just before it goes pitch black.

I have no idea why this came to my house. My subscription to the National Lampoon ended sometime in the late 70s, and, despite my wan efforts, irony and parody have been wrung out of public discourse by the bellicosity of the right and the pusillanimous anxiety to not offend of the left. So, which one of you assholes put me on this list?
Thanks - it’s a breath of fresh air.