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It’s not as embarrassing as the famous “Dewey Beats Truman” headline misstep, but the dramatic conviction of Tyco International Ltd. ex-Chief Executive Officer Dennis Koslowski caught Newsweek and others pitching the wrong side of the pendulum on white-collar crime. Newsweek used the acquittal of mutual fund broker Theodore Sihpol III to headline “Cracks in the Crackdown.” It speculated that the loss “may signal a shift” away from the recent far-reaching and largely successful attacks on corporate fraud. Koslowski, the once high-flying CEO who now faces up to 30 years in prison, probably disagrees. So should any good trial lawyer. Koslowski was convicted in state court in New York of looting Tyco of more than $600 million. This four-month trial was his second. (The first ended in a mistrial more than a year ago.) With the jury in the trial of HealthSouth Corp. ex-CEO Richard Scrushy still deliberating and Enron Corp. ex-CEO Kenneth Lay’s trial on the horizon, the Koslowski verdict holds important lessons for the public as well as for trial lawyers. It is a good indicator that the public can expect more targets to come forward, cut deals and cooperate. The lesson for prosecutors is clear: Keep it simple. In the first Koslowski trial, the government spent days of testimony on details of obscenely lavish apartments, parties, etc. In the end it was merely a distracting sideshow. For the jury, confusion creates doubt, and doubt creates acquittals. This time, prosecutors realized that a little goes a long way-and focused on how Koslowski took $600 million and hid it. Pure and simple wrongdoing. The defense also learned a lesson. In the second trial, Koslowski took the stand. As with WorldCom Inc. ex-CEO Bernie Ebbers earlier this year, the CEO’s testimony was a disaster that had the exact opposite effect than was intended: conviction. Why did this happen? Both men were consummate salesmen and marketers who made their fortunes in part on their ability to impress and convince a wide range of audiences. They commanded respect and trust when they spoke. But the courtroom is a different world from the boardroom. If a jury believes a defendant is lying about the key issues, little else matters. Preparation is crucial When defending high-profile CEO defendants, lawyers must remember that this is not a conversation: Witnesses enter a strange and unnatural environment for which even the most seasoned speaker must be carefully prepared. Witnesses must: Control the room. In a courtroom, the questioner seems in control, which can be unnerving for a high-level witness. A well-prepared witness knows that he can’t bully or cajole his way out of tough questions. He should take his time, be relentlessly polite and focus carefully on each question. Koslowski struggled to focus his testimony and seemed unprepared. Asked why he did not report a $25 million bonus on his tax return, he could only reply, “I just was not thinking.” The prosecutor called that explanation “ludicrous,” and the jury agreed. Prepare for a marathon, not a sprint. Both Koslowski and Ebbers were on the witness stand for several days, far longer than the cut-and-dried executive style they are used to, and in both cases, the stories wore thin. Keep the message simple. As in politics, every word counts, but some count more than others. Both Koslowski and Ebbers, long-time masters of the powerful phrase, got caught with too many phrases they could neither take back nor adequately explain. These are hard lessons for high-profile defendants to learn. After a lifetime of being successful, they have a need to believe that they are their own best advocates. But being a witness is different, like stepping into a sumo wrestling ring without adequate training or experience. The old saw, “I’ll just go in and tell my story,” is an invitation to disaster. In corporate boardrooms and water coolers across the country, many folks reacted to Koslowski’s conviction with surprise. Closer study reveals these important lessons. Lay is doing TV appearances to sharpen his message for trial, but that strategy will now be reconsidered. A brief interview in a comfortable TV studio is very different from four or five days of grilling in an increasingly uncomfortable witness chair. More important, the results of a bad answer are devastatingly different. Just ask Ebbers and Koslowski. Dan Small is a trial lawyer and a partner in the Miami office of Duane Morris, where he focuses on complex commercial litigation, selected white-collar criminal matters, Securities and Exchange Commission and other investigations, and witness preparation. He is the author of several American Bar Association books on litigation, including Preparing Witnesses (2d edition, 2004), and has spoken on the topic across the country.

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