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Delivering opening statements Thursday in the retrial of former Tyco International Ltd. executives L. Dennis Kozlowski and Mark H. Swartz, defense lawyers took square aim at the prosecution’s assertions of theft. “You tell me how you steal when you sign a promissory note and repay it,” Kozlowski’s lawyer, Stephen Kaufman, said to the jury. Kaufman said his client had done so when he borrowed company funds to buy $12 million in artwork. “If that’s theft, I need a new form of Webster’s,” the lawyer said. Charles Stillman, the lawyer for Swartz, presented the same chart that Assistant Manhattan District Attorney Owen Heimer had used in his opening to detail the major payments in controversy. The prosecutor’s chart had been labeled “thefts.” Stillman’s version had the word “alleged” added to it. “There’s no theft until you folks call it theft,” he told the jury. Kozlowski, Tyco’s former chairman and chief executive officer, and Swartz, the former chief financial officer, face charges of grand larceny because they allegedly stole $150 million in unauthorized bonuses and loans. The Manhattan District Attorney’s Office also has brought felony counts of securities fraud, conspiracy and falsifying business records. The executives’ first trial ended in a mistrial in April. Justice Michael Obus of Manhattan Supreme Court, who oversaw that trial, is also presiding over the retrial. Kaufman and Stillman said their clients had legitimately received massive bonuses, which they attributed in large part to the enormous growth of Tyco’s revenue and profits during their tenure. The defense lawyers also said actions taken by Kozlowski and Swartz were inconsistent with the prosecution’s depictions of them as criminals. The lack of criminal intent, they said, requires acquittal. Kaufman said Kozlowski met all corporate requirements with regard to disclosure, contrary to the prosecution’s assertion that he concealed self-dealings. The defense attorney said in-house lawyers and outside counsel were aware of Kozlowski’s loans and bonuses, as were external auditors as PricewaterhouseCoopers. “In the absence of the badges of fraud, there was disclosure, there was plain view,” said Kaufman. Stillman had a sign before the jury throughout his opening statement that said: “No Criminal Intent Means No Crime.” DIFFERENT STYLES The two lawyers addressed the jury in somewhat different manners. Kaufman expressed indignation over Kozlowski’s being accused of such crimes. He took the prosecution to task for dwelling in its opening statement on the fact that Kozlowski spent money on artwork and a lavish Fifth Avenue apartment that he said was owned by Tyco. “If he had a right to borrow the money, it doesn’t matter how he spent it,” said Kaufman. He said he thought the prosecution was trying to appeal to jurors’ prejudices. Prosecutors objected to that statement, and Obus sustained the objection. Stillman took a more avuncular approach. He drew an objection from the prosecution when he began to tell the jury about Swartz’s personal and family life. The judge allowed Stillman to proceed but directed him to relate those facts to issues in the trial. Stillman also urged jurors to be fair in considering a case involving high-flying executives. No doubt seeking to draw a contrast with Enron Corp. and WorldCom Inc., he noted that Kozlowski and Swartz had built a highly successful company that remains successful today. Bermuda-based Tyco makes goods that include electronics equipment, fire and security alarms, healthcare devices, plastics, sprinklers and valves. “This is not the case of a company that went into bankruptcy,” he said. “This company was the real deal.” Witness testimony will begin Monday.

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