The trial of two former Tyco executives ended in high drama on April 2nd, as the judge, Michael Obus, declared a mistrial. Dennis Kozlowski, the firm’s ex-boss, and Mark Swartz, Tyco’s former finance chief, had stood accused of looting their employer of $600m, via fraudulent share sales and unauthorised compensation. Now, the two men must prepare for a retrial—or negotiate pleas with Manhattan’s district attorney, Robert Morgenthau, whose office prosecuted the case. In the meantime, however, Americans have been struggling to make sense of the extraordinary sequence of events that wrecked the trial in the first place.
Much of the immediate finger-pointing has been at the media. On March 26th, the Wall Street Journal published the name of one of the jurors, Ruth Jordan, after she appeared to flash an “OK” sign at the defence in the midst of jury deliberations. (She denies doing so.) The next day, the New York Postput a drawing of Ms Jordan, a 79-year-old resident of Manhattan’s posh Upper East Side, on its cover, and called her a “hold-out granny” and a “batty blueblood”. After obtaining assurances from Ms Jordan that she did not feel pressured, the judge allowed the jury to continue its deliberations for four more days. At this point, Ms Jordan told him that she had received a telephone call and a letter from members of the public. She later said the letter was “disturbing”.
His voice wobbling with emotion, Mr Obus called a mistrial, blaming “efforts to pressure the jury from the outside”. Though lawful, he said, printing Ms Jordan’s name violated an unwritten convention “that is ordinarily observed and wisely observed.” Quite so. But there is more here to question than merely the role of the press.
One Angry Granny
Accounts given to the media by the jurors, though not entirely consistent, suggest the following version of events.
At the outset, the jury found itself evenly split. Some of the jurors thought that the prosecution had put forward strong evidence that Messrs Kozlowski and Swartz had failed to seek approval, as they should have done, for certain payments to themselves from the board of directors. These payments included forgiven loans totalling $37.5m, together with bonus payments worth $49.6m for work done on the initial public offering of TyCom, a company subsidiary. Other jurors, however, found Mr Swartz’s testimony credible, and were reluctant to press for guilty verdicts.
Ms Jordan, meanwhile, had felt a powerful reaction against the trial itself. As one juror, Pete McEntegart, put it in Time magazine: “[Ms Jordan] offered her view that when things went to hell at Tyco, the Ivy League-educated, Waspy board of directors closed ranks and served up, in her words, the ‘Polack and the Jew’ on a platter for a DA eager to make an example of somebody—anybody—for the corporate greed of the late 90s.”
Mr McEntegart mocks this position. Yet lawyers for Messrs Kozlowski and Swartz did offer some evidence to support Ms Jordan’s alleged plot line—albeit without the racial overtones (which, anyway, Ms Jordan denies using). For a start, the board’s worries about the large bonuses that Messrs Kozlowski and Swartz were stuffing into their pockets appear to have materialised well after the payments took place—and in a more hostile and threatening legal climate. Tyco’s former outside auditor, Richard Scalzo, testified that he had raised some of the biggest disputed bonus payments at a board audit-committee meeting, where he discussed their accounting treatment. If board members had asked about these payments, said Mr Scalzo, he would have provided more detail about them. But, “I was not asked”.