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NEW YORK — Former Tyco International Gneral Cunsel Mark Belnick “bought into the Kozlowski way of doing business” in accepting millions in unauthorized compensation, the prosecution said in closing arguments Wednesday. The defense has contended that former Tyco Chairman and CEO L. Dennis Kozlowski paid Belnick a $17 million bonus solely for successfully handling a 2000 investigation of Tyco by the Securities and Exchange Commission. “That’s ridiculous,” Manhattan Assistant District Attorney John Moscow told the jury. The bonus was paid to Belnick, Moscow argued, because the former general counsel agreed to help cover up a document showing that company money was being used to pay personal expenses for Kozlowski’s girlfriend. “He goes in with the memo and comes out with the money,” Moscow said of a March 28, 2000, meeting where prosecutors allege the two men made their bargain. The Manhattan district attorney’s office has charged Belnick with grand larceny, securities fraud and falsifying business records for accepting more than $30 million in loans and compensation unapproved by Tyco’s board. In the course of the two-month trial before Manhattan Supreme Court Justice Michael Obus, prosecutors have argued that Kozlowski paid Belnick such amounts because the lawyer helped conceal the CEO’s own, much larger thefts from Tyco. The defense has countered that Belnick, a former partner at New York’s Paul, Weiss, Rifkind, Wharton & Garrison, earned every penny of his compensation and reasonably relied on Kozlowski and former Tyco Chief Financial Officer Mark Swartz for guidance on issues of board approval and disclosure of compensation. Kozlowski and Swartz were tried earlier this year on charges of stealing more than $170 million from Tyco. That trial ended in a mistrial in April and is scheduled to be reheard in January. On Wednesday morning, Belnick’s lawyer, Reid Weingarten of Washington, D.C.’s Steptoe & Johnson, concluded his closing argument begun on the previous day. He argued that the prosecution had failed to explain why a distinguished and successful lawyer like Belnick would suddenly turn to crime upon joining Tyco. “The prosecution’s case is not supported by logic, human experience and, most important, evidence,” said Weingarten. But Moscow said Wednesday that it was precisely Belnick’s past reputation that allowed the general counsel to effectively cover up Kozlowski’s misconduct. In his closing argument, Weingarten had cited William McLucas, the highly respected head of the securities enforcement practice at Wilmer Cutler Pickering Hale and Dorr and a former chief of enforcement at the SEC, as perhaps the most important witness at the trial. McLucas, hired by Belnick to work on the SEC investigation, had raised an issue about the documents showing the use of company loan programs for personal expenses. But the securities lawyer testified that he had been satisfied with Belnick’s explanation that Kozlowski and other Tyco executives used the loan program as a revolving credit agreement. Moscow portrayed McLucas as a shrewd investigator who was about to uncover how Kozlowski was looting the company. The prosecutor said the March 2000 meeting between Belnick and Kozlowski was an emergency session focused on “McLucas, the memo and how to get McLucas off the memo.” According to Moscow, Belnick was willing to use his credibility with McLucas to convince the latter that the executives’ use of the loan programs had been fully approved by the board of directors. Kozlowski paid $17 million for that, said Moscow, despite having previously planned to fire the general counsel. “The mere amount of money can create knowledge of what you’re being paid for,” the prosecutor said. Moscow mocked the idea that Belnick earned his massive bonus through his contribution to the SEC investigation. Wilmer Cutler did the actual work, he said, and Belnick was merely doing his job as general counsel. That job, noted Moscow, already paid a $1.7 million salary. The prosecutor also said the timing of the bonus was suspect. The SEC investigation began in December 1999 and ended in July 2000. Moscow said it seemed unlikely Kozlowski would promise such a lavish bonus only a few months into the matter. The bonus is “10 years’ salary for a few months’ work, someone else is doing it and it’s part of his job,” said Moscow. After a trial in which his courtroom tone and demeanor have often seemed flat, Moscow showed surprising spirit Wednesday in delivering his summation before the jury. The defense team, however, raised objections to Moscow’s reference to documents that Belnick and McLucas might have discovered if they had inquired further into how Tyco executives were using the company’s loan programs. Anthony Lin is a reporter with the New York Law Journal , a Recorder affiliate.

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