© D.L. Crumbley
Tyco’s Payments to Executives
The accountant, Sheila Rex, testified that Tyco had three accounts where Mr. Dennis Kozlowski’s spending was recorded – his Key Employee Loan account, intended to help pay taxes on restricted stock after it was vested; a relocation account, where mortgages and other house-related spending were logged; and a third account, for short-term loans, to be paid back within 30 days.
Ms. Rex told jurors the accounting department had procedures for recording spending by Mr. Kozlowski. Mr. Swartz and other senior executives. Mr. Kozlowski’s relocation loans were listed under “Note Receivable Employee A,” Ms. Rex said, Mr. Swartz was
The third account, where Sardinia expenses were logged, was “Notes Receivables LDK,” Ms. Rex said.
She also described the way forgiven loans were accounted for on Tyco’s books, including $38.5 million that was forgiven in 1999. Of that amount; Mr. Kozlowski received $25 million; Mr. Swartz, $12.5 million; and an events planner, Barbara Jacques, $1 million.
Source: Bloomberg News, “Accountant at Tyco Tells of Payments to Executives,” New York Times, November 11, 2003, C-3.