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The Washington law firm Wilmer, Cutler & Pickering gained new levels of prominence in the last three years as it became the go-to firm in seemingly every major corporate scandal. It led internal investigations at both Enron Corp. and WorldCom Inc. The firm’s role in events at Tyco International Ltd. has always been more complicated. Wilmer Cutler lawyers were hired by and worked closely with former Tyco General Counsel Mark A. Belnick. They are now key witnesses in Belnick’s criminal trial-for both the prosecution and the defense. On May 27 and June 1, Lewis Liman took the stand at Belnick’s trial before Justice Michael Obus in a New York City supreme court. Liman and William McLucas were the Wilmer Cutler partners Belnick hired to represent Tyco in a Securities and Exchange Commission (SEC) inquiry into Tyco’s accounts starting in fall 1999. After the inquiry ended without formal charges in July 2000, Belnick received a $17 million bonus from former Tyco Chairman L. Dennis Kozlowski. The New York County District Attorney’s Office asserts that the bonus, as well as more than $14 million in interest-free loans, was stolen. In charging Belnick with grand larceny, securities fraud and several counts of falsifying business records, prosecutors allege that he received payments unauthorized by the board as a reward for helping Kozlowski conceal his own, much larger thefts from Tyco. Belnick’s lawyers, on the other hand, claim the bonus and loans were fully authorized based on his stellar performance at Tyco, the chief example being his successful handling of the 2000 SEC investigation on which he worked with Liman and McLucas. The Wilmer lawyers’ accounts of Belnick’s actions during that investigation are therefore crucial to both sides’ cases, but they differ in the value they place on their contemporary accounts as opposed to their retrospective accounts. For the prosecution, e-mails sent four years ago by the two Wilmer Cutler lawyers to Belnick in the course of that investigation provide the proof that someone alerted the general counsel to the possibility that Kozlowski was abusing company loan programs and that other things might not be right at Tyco. It was largely to explain the background of some of these e-mails that prosecutors called Liman to the stand on May 27. Liman is now a partner at Cleary, Gottlieb, Steen & Hamilton of New York. On March 23, 2000, Liman e-mailed Belnick to let him know that documents that were being readied for production to the SEC showed that $100,000 in vacation expenses for Kozlowski’s then-girlfriend and present wife, Karen Mayo, were being treated as part of a reserve meant to cover expenses relating to a recent merger. “[T]here are payments to a woman whom the folks in finance describe to be Dennis’ girlfriend,” Liman wrote to Belnick in a subsequent e-mail the same day. “I do not know Dennis’ situation, but this is the embarrassing fact.” Prosecutors claim that Belnick failed to act on this information and instead acted to have it redacted. On May 27, under direct examination by Assistant District Attorney John W. Moscow, Liman testified that Belnick never followed up with him about the payment to Mayo. The prosecution will similarly be looking to McLucas to testify in coming weeks about his May 26, 2000, e-mail to Belnick, which has come to be called the “corporate culture e-mail” at trial. Reacting to earlier e-mail discussions of the ways in which Tyco’s finance executives met cash flow forecasts by adjusting various cash reserves, McLucas told Belnick of his concern that there “seems to be a genuine feeling that this sort of thing is not necessarily inappropriate. “[T]he frequency of this kind of thing, along with the attitude that its OK, can really get these guys into serious trouble,” McLucas wrote in the e-mail. “Hopefully we will have some luck on this one as well and the SEC will never hear this kind of story so bluntly presented as here. If we escape this without a crippling broadside, the toughest challenge here seems to me to involve how one changes the culture.” The e-mails are certainly strong statements, but the prosecution is now contending with the fact that the actual trial testimony of the Wilmer lawyers will likely prove mostly helpful to the defense. After Moscow’s direct examination, defense lawyer Mark Hulkower embarked on a lengthy cross-examination of Liman in which the former Wilmer Cutler partner continually highlighted smart and difficult decisions Belnick made in the course of the SEC investigation. “He told us that he wanted to respond right away to the SEC,” Liman testified on May 27 about Belnick’s “very active” participation in the investigation. “He thought this should be taken extremely seriously. He didn’t want to spare any expenses at all in terms of the resources we devoted to this.” Liman praised Belnick’s potentially risky decision to have former Tyco Chief Financial Officer Mark Swartz meet with the SEC. The SEC publicly announced it was calling off its investigation shortly after a successful meeting with Swartz.

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