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The Convert

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In the suite at the Four Seasons, Belnick recalls smiling at Kozlowski—“a small smile,” he calls it. Then, he remembers, he told Kozlowski, “If there’s any thought that there’s anything more I can do to make this investigation end sooner if I was properly incentivized, wipe that thought out of your mind.”

“I just told you what I told you,” Kozlowski said.

Belnick, having made his point, said, “I’m grateful to you, and I hope I earn the bonus.”

On July 13, 2000, the SEC officially closed its investigation, recommending no action. Tyco stock price rose 11 percent over the next few days. “You really saved the company’s ass,” McLucas wrote to Belnick, “and, more pointedly, Kozlowski’s and Schwartz’s reputations and careers.”

Certainly, Kozlowski understood that. Belnick, who hadn’t fit in, who was to be fired, was now a company hero. “Dennis came to my office,” recalls Belnick. “He was ecstatic.”

Belnick joyfully spread the news to McCloskey. He wrote, “Justice triumphs—and the Founder comes through again!” To which McCloskey responded, “Great news. Congrats on your sanctified work.” The same day, Belnick sent a memo asking for his bonus. That year, he’d earn $18.8 million. Soon Kozlowski signed him to another three-year deal, worth $20 million.

In the courtroom, Moscow, broad-shouldered with a head of thick white hair, had an unsettling energy. He would often start rocking, one foot forward as if toeing a starting line.

Moscow had no documents to prove that an agreement had been reached that night at the Four Seasons. Kozlowski didn’t testify, which meant that Moscow had only Belnick’s account. The prosecutor’s tactic was to bully the defendant on details.

“What time was it that Kozlowski called you?”

“It was fairly late in the evening, I think—nine, ten.”

“Did you go to his room?”

“Yes.”

“Did you sit down?”

“Yes.”

What was Dennis Kozlowski wearing at the meeting where he offered Belnick a bonus worth $17 million?

“You’re not serious?” Belnick said.

“I was serious,” Moscow later told the jury. A meeting at which you’re offered $17 million ought to be memorable—unless, of course, there were things a person didn’t want to remember. Why, after all, would Kozlowski offer so much money for simply managing an investigation?

“There can be amounts of money so large that the person who gets them knows the stated purpose is not the real purpose,” said Moscow. To Moscow, if you’re offered $5 to take groceries up some stairs, that’s one thing; if you’re offered $5,000, that’s another matter entirely. Kozlowski had to be worried that if Belnick and McLucas followed the Karen Mayo money too assiduously, his money-shifting shenanigans would be revealed.

“You had the mistress document?” Moscow asked Belnick on the stand. He meant before the meeting with Kozlowski.

“I had that, I don’t know if—yes, I had it,” said Belnick.

“And you showed that to Kozlowski [at the Four Seasons meeting]?”

“Probably, yes.” In Belnick’s mind, it wasn’t a big deal. The only thing that bothered Kozlowski was the word mistress. This was his longtime girlfriend, now his wife. Moscow saw it differently.

“And that was the meeting he promised you your bonus, isn’t that right, sir?” asked Moscow.

“It was the same meeting.”

“No further questions,” said Moscow.

Of course, Belnick hadn’t been charged with conspiracy. And, in fact, even the larceny charge didn’t depend on the quid pro quo that Moscow implied. The basis of the supposed larceny wasn’t the size of the bonus or the circumstances in which was offered, but merely that it wasn’t approved by the board. And that seemed the responsibility of someone other than Belnick.

The day Mark Belnick broke down on the stand, he wore the same drab executive uniform as every other day of the eight-week trial: blue pinstripe suit, an inch or so short in the leg, red tie, light-blue shirt rumpled above the waist. His lawyer led him through the closing days of his four years at Tyco.

Kozlowski had already resigned, after being indicted by the Manhattan D.A. Boies’s firm had been brought in by a committee of the board of directors—which claimed to be outraged at Belnick’s $14 million in relocation loans and $17 million bonus—and soon fell into conflict with Belnick.

On June 10, 2002, a company director went to Belnick’s office, which he’d decorated with images of saints, and read from a sheet of paper: “You have been fired,” Belnick remembers hearing. “You know what the issues are.”

“I don’t know what the issues are,” Belnick said.

Belnick is still pained at the memory. How could they be so mistaken about him? He’d tried to do his best, always. “I was trying to do the right thing all the time at Tyco,” Belnick says. “That’s all I ever wanted to do. My end was to make Tyco a model of corporate governance.” Should he have been more aggressive in following up the Karen Mayo lead? He’s thought about it. “Only with perfect knowledge retrospectively of what was going on,” says Belnick. It “was managed on the books in a way that I wouldn’t have seen it. You would have kept seeing that loans were paid back. You wouldn’t know about any of the spending where Kozlowski got it to zero by forgiving himself the loans.”

Belnick wanted to explain this to the director, but could not make his case. “That doesn’t matter,” the director told Belnick. “You’re fired, and you’ve got two minutes to get out.”

When Belnick looked up, there were two large security guards at the door.

“I picked up . . . ,” Belnick later told the jury but couldn’t proceed.

“Your briefcase?” prompted his attorney.

“My briefcase,” continued Belnick, anger flashing in his voice, “and they took me by the shoulders and marched me down the corridor where everybody worked and took me out of the building.” Then Belnick started sobbing. The judge recessed, the jury filed out. Belnick stepped down, unhooked a velvet rope, and crossed into the audience. His jacket undone, he moved toward a side exit that, inexplicably, was stuck. He stood alone for a moment, suffering, seemingly helpless, when an old law partner of his approached. Martin London, 70, had fallen out of touch with Belnick during his Tyco years, but had been in court nearly every day. Belnick seemed to collapse then, his shoulders shaking, into London’s embrace.

In the courtroom, when Belnick shouted from the defendant’s table to his wife, “I’m going to take the verdict,” she thought, It’s Arthur. She thought Liman was “taking him by the hand and saying, ‘This is what you have to do,’ ” which Belnick would later find a pleasingly Catholic notion.

As the foreman rose to deliver the verdict, Belnick crossed himself, turned to his wife, mouthed, “I love you.”

Three Paul, Weiss lawyers sobbed as the foreman said “not guilty” to each count. Belnick, charging across the velvet rope, hugged everyone, crying. “For two years, what they did to me,” he shouted.

The jury, it turned out, had sympathized with Moscow’s view. Belnick had his nose in it. Some seemed to have hoped for a more vigilant presence. “We felt he was morally guilty,” said juror Juliette Williams. “He didn’t hold up his fiduciary responsibilities to the shareholders.” But the law is the law, and reasonable doubt favored Belnick. The jurors knew what theft is, and this didn’t look like that. “Everything that he got was documented through e-mails and memos with the company’s signature,” said Adalgiza Elamir, a nurse.“The evidence we had satisfied us that he got it the right way.”

In the elevator, a bunch of Paul, Weiss attorneys rode down together. A message flashed on all their BlackBerrys. It was from London: “Fuck Moscow and the horse he rode in on.”

Days later, at home on Central Park West—“windows on the park,” they sometimes call it—Belnick seems at moments drained, and then, in a flash, invigorated. The system had worked. The Founder had come through, again. McCloskey might believe suffering serves a purpose, but that was not his only message. He’d e-mailed the day of the verdict: “I’m writing this and crying at the same time.” Belnick’s new faith in McCloskey’s “loving Father” had held fast through his recent trials. (Even his parents have accepted it.)

Vindication feels terrific—though, at times, quite close to anger. At home, Belnick isn’t entirely peaceful or prayerful, or mooning about the good citizenship he tried to practice. He doesn’t have to be. Or perhaps it’s just not as real as the pain he’s endured. “They”—he means Moscow—“tried to ruin my life,” says Belnick. And the gang joined in. Indeed, they’re not through yet.

Boies says that Belnick will be litigating the civil cases for the rest of his life. And, then, who knows if a person ever really gets his reputation back? “There are no heroes in this case,” one of Belnick’s old partners says, and he includes Belnick.

In that undersize chair, Belnick’s calm goes. Now, at least, he’s ready to fight back. He seems suddenly a bare-knuckled lawyer out for his due. “They”—he means Moscow—“thought I’d knuckle under,” he says, “They didn’t know who they were dealing with. I’ll get even. They”—he means Tyco—“want to find out what it’s like to litigate against me. They’re about to find out.” He has a new mission. According to his deal with Kozlowski, Tyco owes him $20 million in severance, not including attorney’s fees, which he also intends to recover.

“They’ve got my money,” he says. “I want it back.”

Additional reporting by Mathew Martz


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