A defense attorney for Mark A. Belnick, Tyco International Ltd.'s former top lawyer, in his closing argument on Tuesday said Belnick had rightly taken bonuses from a company "flush with money."
Belnick, 57, is on trial in New York State Supreme Court in Manhattan, charged with grand larceny, securities fraud and falsifying business records in connection with $32 million in bonuses and loans he received while working at Tyco. He faces up to 25 years in prison on the most serious charge of grand larceny.
Belnick, who served as Tyco's chief counsel from 1998 to 2002, has testified that he believed L. Dennis Kozlowski, the chief executive at the time, had the authority to set his compensation.
In his closing argument, Belnick lawyer Reid Weingarten said Tyco's board had ceded much of its authority to Kozlowski — granting him the ability to make acquisitions on the Bermuda-based conglomerate's behalf up to $200 million — and never said no to his requests.
"In truth, this board was very happy to ride up the Kozlowski elevator in the 1990s," Weingarten said. "They made a lot of money. They essentially served as a rubber stamp."
Prosecutors claim Belnick was improperly granted a bonus of cash and stock worth up to $17 million by Kozlowski for his work in resolving a Securities and Exchange Commission informal inquiry into Tyco's accounting and was allowed to borrow more than $14 million in relocation loans from the company.
"He (Belnick) was paid a lot of money at Tyco, money we believe was earned," Weingarten said.
Belnick's trial comes after Kozlowski and Mark H. Swartz, Tyco's former financial chief, were indicted in 2002 on charges of stealing $600 million from the company. Their prosecution ended in a mistrial, after a juror received a menacing letter. They are expected to be retried in January.
Tyco, based in Bermuda but with U.S. headquarters in West Windsor, N.J., makes everything from telecommunications equipment to home alarm systems. In 2003, the corporation had sales of about $36 billion.
