NEW YORK – Jury selection began Tuesday for the second trial of two former top Tyco International Ltd. (TYC) executives charged with looting the company of $600 million to subsidize their lavish lifestyles.
Kozlowski and Swartz are accused of stealing $170 million by hiding unauthorized bonuses and secretly forgiving loans to themselves, and pocketing $430 million more by pumping up Tyco stock with lies about the state of the company's finances.
In the first trial, prosecutors gave jurors a videotaped look at the $2 million birthday party that Kozlowski threw for his wife on a Mediterranean island, and a video tour through his $18 million Fifth Avenue apartment.
This time around, prosecutors were expected to focus less on items such as Kozlowski's $6,000 gold-threaded shower curtain and more on how he and Swartz allegedly looted the company.
The retrial is expected to last about four months.
Kozlowski, 58, and Swartz, 44, are charged with grand larceny, falsifying business records, conspiracy and business law violations. The defendants each face up to 30 years in prison if convicted of the most serious charges.
In the first trial, jurors were told Kozlowski spent some $11 million of Tyco's money to furnish the apartment. The furnishings included a $2,900 set of hangers, a $4,995 custom-made blue-and-gold bedskirt, and a $2,665 blue velvet pillow.
And those were the little things.
The jurors also saw a Persian rug, 20 feet by 16 feet, that cost $191,250, a walnut clock that set Tyco back $113,750, and a pair of French antique stools, bought for $125,000.
The prosecutors' videotapes, which included scenes shot aboard Kozlowski's yacht, "Endeavour," sometimes made the proceedings seem more like an episode of "Lifestyles of the Rich and Famous" than a larceny trial.
Prosecutors said at the time that the extravagances demonstrated the defendants' greed and showed where some of the money they allegedly stole ended up.
Legal experts said prosecutors should avoid paying too much attention to the defendants' spending.
John Coffee, a Columbia University Law School (search) professor who specializes in white-collar crime, said after the first trial that prosecutors "could maybe put their case on an extreme diet and, 'Keep it simple, stupid.'"
Defense lawyers said Kozlowski and Swartz earned every penny they got from Tyco.
In an interview with The New York Times published Sunday, Kozlowski said he earned "enormous sums" of money because "I worked my butt off and it was all based on my performance in Tyco's long-established pay-for-performance culture."
He also said the $6,000 shower curtain, purchased by his decorator, was not his idea.
Tyco, which has about 270,000 employees and $36 billion in annual revenue, makes a wide range of products including electronics, medical supplies and security devices. The company is based in Bermuda. Its U.S. headquarters is in West Windsor, N.J.