- The Washington Times - Sunday, March 28, 2004

NEW YORK (AP) — An elaborate trial that has come to symbolize the worst of an era of corporate excess could be derailed this week by a 79-year-old retiree from Manhattan.

Jurors in the trial of two former top Tyco International executives return this morning to deliberations they have described in notes to the judge as “poisonous” and “irreparably compromised.”

Judge Michael J. Obus must decide whether to keep pushing jurors to overcome what they have described as an atmosphere of animosity that has dominated the jury room in recent days.

“The judge is going to do everything possible to refrain from declaring a mistrial,” said Christopher J. Bebel, a former federal prosecutor who practices securities law in Houston. “But there’s only so far he can go. … In all likelihood, it looks like his efforts will be futile.”

The jurors are deliberating 32 counts against Tyco’s former chief executive, L. Dennis Kozlowski, 57, and the company’s former chief financial officer, Mark Swartz, 43. The defendants are accused of looting $600 million from Tyco.

The defense argued that the men earned every dime and that the board of directors and the company’s auditors knew about the compensation and never objected.

On Friday, jurors wrote that they had “ceased to be able to conduct respectful, open-minded, good-faith deliberations.” Judge Obus called the note “disturbing” and “a little worse than a hung jury” and indicated he might declare a mistrial. But by the end of the day Judge Obus had concurred with jurors’ request to return to work after the weekend.

At the heart of the acrimony is a former teacher and lawyer who stunned the courtroom Friday by making what observers described as an “OK” gesture with her thumb and forefinger as she passed the defense table.

According to notes from other jurors, the woman wants Mr. Swartz and Mr. Kozlowski acquitted on all counts and has been refusing to deliberate any other potential verdict.

The woman worked as a teacher before receiving a law degree from New York University in her late 50s and going on to practice for several years in New York.

The judge has denied four defense motions for a mistrial. He admonished jurors Friday against engaging in any communication, verbal or nonverbal, with people involved in the case.

The defendants are accused of stealing $600 million from the Bermuda-based conglomerate they once headed by hiding excessive pay packages from the company’s board and selling off their stock at inflated prices.

Much of the trial has been dominated by descriptions of flamboyant behavior and breakneck spending emblematic of the era of corporate scandal that produced a string of recent high-profile white-collar trials.

Manhattan District Attorney Robert Morgenthau almost certainly will prosecute again in the event of a mistrial, Mr. Bebel said.

“The government and the defense have poured an extraordinary amount of time and effort into this case,” he said.

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