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December 2, 2002
Merry
Christmas (23
shopping days remain) Headlines--- Pictures from the Past---2000---Kerhoulas,
Wright, Nicholas UAEL
Raises Dues, Service Members Hit the Hardest FDIC
says bank profits up 34.8 percent in third
quarter; credit problems grow
GE Commercial Fin.
Completes Acquisition ABB's Structured Finance
Business Expense
Management Takes the Spotlight Christmas
Wine---Mike Barrett, Dumac Leasing Montana's
`wine connoisseur' rule shows the oddity
of wine laws
Nantucket still
a welcome port to 'exiled' Kozlowski #####
Denotes Press Release --------------------------------------------------------------------------------------------------- Pictures from the Past---2000---Kerhoulas, Wright,
Nicholas
Pacifica Capital’s finest ( left to right )
Bette Kerhoulas, CLP, Heather Wright, and Amy Nicholas, CLP ------------------------------------------------------------------------------------------ This Week's Economic Events December 2 MONDAY Commerce Department reports on construction
spending for October. Treasury bill auction. December 3 TUESDAY Institute for Supply Management releases its
report on the manufacturing activity in
November. Commerce Department reports on construction
spending for October. Treasury bill auction. December 4 WEDNESDAY Labor Department reports on third quarter productivity
and costs. Commerce Department reports on factory orders
for October. December 5 THURSDAY Labor Department reports on weekly jobless claims. Freddie Mac, the mortgage company, reports on
mortgage rates. Largest U.S. retailers announce their sales
figures for November. December 6 FRIDAY Labor Department reports on employment for November. Federal Reserve reports on consumer credit for
October. --------------------------------------------------------------------------------------- Uh Oh! Spaghetti Oh!!! Is it a surprise that the East Coast Funder
who cut off 117 brokers just a few
months ago has seen their funding volume
drop from $12,000,000+ in September to under $8,000,000 in November? (Name withheld) ------------------------------------------------------------------------------------------------- Do not use my name please. I met with one of Connecticut Bank of Commerce's
SVP in the late 90"s when I was with a bank leasing sub. They asked me to
participate in a lease. When I received the financials the company had an "ongoing
business concern opinion" from a major accounting firm.
When I questioned them about this they said it didn't bother them. When I reviewed
some of their deals for possible participation I noted that several
of there outstanding exceeded 10% of their capital base. I was told that the chairman of the bank felt that leases did not count as loans and were
therefore not subject to the 10% of capital rule. ---------------------------------------------------------------------------------------------- UAEL
Raises Dues, Service Members Hit the Hardest by Kit Menkin LA QUINTA, Cal. –Following the Equipment Leasing
Association (ELA) announcement of increasing
its minimum membership dues from $1200 to
$2200, The United Association of Equipment
Leasing ( UAEL) announced its revised schedule
of membership dues for 2003, including increasing
the minimum broker/lessor from $445 to $595,
next tier $800 to $995, and $1045 to $1295.,
funder from $1725 to $1995, service from
$600 to $795, and larger service providers
from $600 to $1,495. Broker/Lessor
($0-10 million)...............................$ 595 Broker/Lessor
($10-20 million)..............................$ 995 Broker/Lessor
(20+million)................. .................$
1,295
Funder. .................................................................$
1,995 Service
Providers (less than 6 employees)>>>>................$ 795 Service
Providers (6 or more employees)..........................$
1,495 "We have shifted from a 5-tier to a 3-tier
system in order to simplify the structure
and align it more closely with the actual
annual funding volume categories into which
most of our broker/lessor members fall,"
said 2002 President Bob Fisher, CLP, in
the press release.
A former press release noted the organization
to save money moved from Oakland to La Quinta, California, and has two
employees, Joe Woodley, CEO in La Quinta,
and Bill Grohe, membership development in
San Francisco, California. ELA has 27 employees. The 2001 “Dues Comparison”
may be found at: http://leasingnews.org/DuesComparison.htm
along with membership comparison. Newly elected 2003 President Bette Kerhoulas,
CLP, said in the press release: "Involvement in Association activities
adds value to the members' professional
strengths and abilities. Our educational programs and conferences bring
members into contact with the profession's
best practices and with the industry leaders
who are developing those practices and making
them work. Our selective dues increase will enable UAEL
to further enhance the quality of its educational
products and deliver additional long-term
benefits to each member who participates
in our programs." In comparing the two association budgets, the
great majority of gross income does not come from the membership dues, but membership
participation at conferences, seminars and workshops. The gross income from these events is important
to the budgets of both organizations. The last San Diego UAEL conference drew 320,
including exhibitors, where the ELA Conference
in San Francisco drew over 1,200.
There are very few “non-members”
who attend these conferences, except perhaps
as part of a membership campaign as promoted
by UAEL. The UAEL funding retreats have
been poorly attended and regional meetings
are far in-between as compared with previous
years. “UAEL was established in 1974 as an association
bringing together all segments of the leasing
industry, including brokers, independent
lessors, funders, bankers and service providers. All UAEL members have full voting privileges.” The press release from UAEL noted that all its
members “have full voting privileges,” most
likely a reference to the National Association
of Equipment Leasing Brokers, where only
brokers may vote in election of officer,
not “funders.”
The National Association of Equipment Brokers
has been promoting a joint conference in
the coming years, and emphasizes its association
is primarily aimed at serving its broker
membership, not funders, lessors, or service
providers. Broker membership dues are $295
a year. They also have an active “listserve” /billboard
for members to share information with each
other via the internet. They have no paid
employees, utilizing a management service. The UAEL press release notes “For Additional
Information, Contact: (media) Jim McCommon, CLP jim@2lease.com (CEO) Joe Woodley, CLP Executive Director
jwoodley@uael.org Please visit the UAEL website www.uael.org for
updates.
“ Also send Leasing News to a colleague as we
are trying to build our readership. We print the truth. The real
stuff. Mainly from insiders. -------------------------------------------------------------------------------------------- FDIC says bank profits up 34.8 percent in third
quarter; credit problems grow By Associated Press WASHINGTON (AP) Credit card loans written off
by the nation's commercial banks jumped
35.6 percent to $3.9 billion in the three
months ending in September as credit quality
problems continued to grow. The surge in write-offs, compared with the third
quarter of 2001, came as banks earned $23.4
billion, only $11 million short of the record
set in the second quarter of this year,
the Federal Deposit Insurance Corp. reported
Tuesday. The third-quarter profits were up 34.8 percent
from the July-September period last year.
Still, they were held back by sharply lower
income from banks' international operations
and by higher expenses for loan losses,
the FDIC said. ''The ride became a little bumpier particularly
for a few large institutions in the third
quarter, but the industry as a whole enjoyed
near-record earnings,'' said FDIC vice chairman
John Reich. ''It remains well positioned
to continue to be an engine of growth for
the economy.'' Also reflecting consumers' problems paying back
credit card loans, the federal courts reported
Monday that record numbers of individuals
found themselves in heavy debt and filed
for bankruptcy in the 12 months that ended
Sept. 30. Personal bankruptcy filings rose
1.5 percent to a total of 1,508,578. The FDIC said the number of commercial banks
on its ''problem list'' rose to 126 from
115 in the second quarter, with a total
$38 billion in assets. In addition, one commercial bank failed during
the third quarter, the FDIC said. The failure
in September of AmTrade International Bank
of Atlanta brought a $6 million loss to
the federal deposit insurance fund. So far
this year, ten federally insured institutions
nine banks and one savings and loan have
failed. Return on assets, a basic yardstick of bank
profitability, was an average 1.37 percent
in the third quarter, down from the record
1.41 percent in the second quarter. But
a majority of banks, 55.6 percent, saw their
ROAs improve. The Office of Thrift Supervision reported Friday
that earnings increased 14 percent at the
nation's savings and loans in the third
quarter to $2.97 billion. On the Net: Federal Deposit Insurance Corp.: http://www.fdic.gov ### ################################################### GE Commercial Finance Completes Acquisition
of ABB's Structured Finance Business STAMFORD, Conn ---GE Commercial Finance announced
today it has completed its acquisition of
the structured finance business of ABB.
ABB and GE Commercial Finance had entered into
a definitive agreement for GE Commercial
Finance to purchase the Structured Finance
business on September 4, 2002. The ABB structured finance business includes
global infrastructure financing, equipment
leasing and financing businesses. These
operations serve customers principally in
Europe and the United States. ABB's structured finance businesses will become
part of three units of GE Commercial Finance:
GE Structured Finance, GE European Equipment
Finance and GE Vendor Financial Services. About GE Commercial Finance GE Commercial Finance offers businesses of all
sizes an array of financial services and
products worldwide. With more than $180
billion in assets, and a particular expertise
with mid-market companies, GE Commercial
Finance provides loans, operating leases,
financing programs and innovative structured
capital to help customers grow. It also
offers loans and financing leases for major
capital assets, including transportation
financing solutions; industrial facilities
and equipment, and infrastructure-related
facilities; commercial and residential real
estate loans and investments; and loans
to and investments in public and private
entities in diverse industries. GE Commercial
Finance is headquartered in Stamford, Connecticut.
GE is a diversified services, technology
and manufacturing company with operations
worldwide. CONTACT: GE Europe Media Ivan Royle, +44 (0)20 7302 6145 or GE Investors Richard Wacker, 203/373-2468 ################# ########################################### ----------------------------------------------------------------------------------------- Expense Management Takes the Spotlight FASB Issues Accounting Guidance to Improve Disclosure
Requirements for Guarantees In an effort to provide better and more transparent
disclosure requirements for issuers of guarantees,
the Financial Accounting Standards Board
(FASB) has published Interpretation No.
45, Guarantor’s Accounting and Disclosure
requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others. The
Interpretation expands on the accounting
guidance of Statements No. 5, 57, and 107
and incorporates without change the provisions
of FASB Interpretation No. 34, which is
being superseded. The Interpretation may
be obtained by contacting the FASB’s Order
Department at 800-748-0659 or placing an
order at the FASB’s website (www.fasb.org
). The Interpretation elaborates on the existing
disclosure requirements for most guarantees,
including loan guarantees such as standby
letters of credit. It also clarifies that
at the time a company issues a guarantee,
the company must recognize an initial liability
for the fair value, or market value, of
the obligations it assumes under that guarantee
and must disclose that information in its
interim and annual financial statements.
In commenting about the importance of the Interpretation
to investors, FASB Senior Project Manager
Robert C. Wilkins, stated, “By improving
the required disclosures and accounting,
the FASB’s new accounting guidance will
provide a more representationally faithful
picture of a company’s financial position
and the risk it has assumed. The Interpretation
should significantly improve the reporting
of guarantees that are issued in conjunction
with other transactions, such as when a
seller also guarantees its customer’s repayment
of the funds borrowed to pay the seller
for the customer’s purchases.” This guidance does not apply to certain guarantee
contracts, such as those issued by insurance
companies or for a lessee’s residual value
guarantee embedded in a capital lease. The
provisions related to recognizing a liability
at inception of the guarantee for the fair
value of the guarantor’s obligations would
not apply to product warranties or to guarantees
accounted for as derivatives. The initial recognition and initial measurement
provisions apply on a prospective basis
to guarantees issued or modified after December
31, 2002, regardless of the guarantor’s
fiscal year-end. The disclosure requirements
in the Interpretation are effective for
financial statements of interim or annual
periods ending after December 15, 2002. About the Financial Accounting Standards Board Since 1973, the Financial Accounting Standards
Board has been the designated organization
in the private sector for establishing standards
of financial accounting and reporting. Those
standards govern the preparation of financial
reports and are officially recognized as
authoritative by the Securities and Exchange
Commission and the American Institute of
Certified Public Accountants. Such standards
are essential to the efficient functioning
of the economy because investors, creditors,
auditors and others rely on credible, transparent
and comparable financial information. For
more information about the FASB, visit our
website at www.fasb.org. Sites of Reference: http://www.fasb.org ----------------------------------------------------------------------------- Christmas
Wine---Mike Barrett, Dumac Leasing Kit you missed one Gundlach Bundschu's Gewertztraminer is an excellent
white for turkey day Mike Barrett Dumac Leasing BarrettM@ExchangeBank.com Principle KC
Vintners LLC (I also think the New Zealand Sauvignon Blanc
with Semillion go well with Tex-Mex, SouthWest, Asian, and game with heavy
sauce. Gundlach Bundschu's Gewertztraminer is an excellent white for turkey
day. I like both "chilled." You can also add ice to the glass!!! Both are
not very inexpensive. Editor ) -------------------------------------------------------------------------------------- Montana's `wine connoisseur' rule shows the
oddity of wine laws By Matt Gouras, Associated Press HELENA, Mont. (AP) To have his favorite wine
shipped directly from a California winery,
Montanan Gerard Lemieux wanted to make sure
he did everything legally. The law, he knew,
could be as twisted as an old grape vine.
Montana regulators said he had to buy a special
state permit a ''connoisseur's license''
to have wine shipped directly to his home.
Lemieux never claimed to be a connoisseur,
but he shrugged it off and paid the $50.
Then the state said he would need to keep track
of every purchase, give special shipping
labels to the wineries and more paperwork
to regulators and send semiannual tax filings
to the state. He also would be responsible
for ensuring shippers and wineries knew
why it was all necessary. He did it all. But in the end, it was such a
hassle that Lemieux gave up. Next time he
wants a few bottles from his favorite winery,
he's driving to Napa Valley, filling the
trunk of his car and hauling it back himself.
''There's nothing saying we can't do that,''
said Lemieux, a retired United Parcel Service
worker from Missoula and one of just 10
Montanans holding a state connoisseur's
license. ''And in the end, it's easier.''
Lemieux's experience is not uncommon for finicky
wine lovers who find the selection at the
local store lacking. All states have laws to control the sale and
shipment of alcohol. The wholesale industry
argues they are necessary to ensure the
states can collect alcohol taxes and prevent
the shipment of booze directly to minors.
In recent years, however, the wine industry
has convinced some states to make exceptions
for wine, arguing that minors aren't likely
to try ordering fine merlots or chardonnays
to get a buzz. What has resulted is a confusing array of state
rules and regulations that has left wineries
and wine lovers often befuddled. Thirteen states now have ''reciprocal'' agreements
that allow residents in one state to order
wine from another state, so long as that
state allows the same. Fourteen states and Washington, D.C., allow
wine shipments, but under tight limits or
restrictions. Like Montana's law, many of
the rules are so cumbersome, confusing or
ambiguous that critics say wineries and
even shipping companies like United Parcel
Service won't ship to those states. Alaska,
for instance, allows the direct shipment
of a ''reasonable'' amount of wine, but
never defines reasonable. Wholesalers have resisted any move to exempt
wine from state alcohol rules. ''The argument is that fine wines are not alcohol,
but if you start opening the door, everything
flows through,'' said Craig Wolf, an attorney
for the Washington, D.C.- based Wine and
Spirits Wholesalers of America. For wineries, though, the myriad rules mean
anytime a resident of another state places
an order whether by phone, mail or through
the Internet the winery is supposed to make
sure shipping there is legal. ''We see this really as a matter of fairness
for consumers,'' says Steve Gross, state
relations manager for the Wine Institute,
a California-based trade group. ''It seems
unfair that a consumer from one state can
have wine shipped to his home to enjoy and
a consumer from another state is told, `Sorry,
we're not allowed to ship to you because
of where you live.''' Truchard Vineyards of Napa Valley takes orders
over the Internet, but is careful about
where it ships. The company's Web site lists
the states where it can ship wine unfettered.
Potential buyers from other states are asked
to inquire before ordering because other
state rules can change ''on almost a daily
basis,'' the winery says. ''It's a hassle,'' said Truchard's Linda Carr.
''We'd love to see things different because
we're missing a huge part of the consumer
market.'' In Massachusetts, wine makers say such laws
are hampering its fledgling wine industry.
At the Hill Vineyard in Dartmouth, owner Robert
DeGrazia has to sell ''every last drop''
of his 1,500 cases a year within Massachusetts.
That state's law forbids wineries to ship
directly to consumers, and his winery is
too small to have been noticed by wholesale
distributors. ''California wineries are 3,000 miles away and
they're beating us up because we can't cross
state lines,'' he said. The disagreement has resulted in about half
a dozen lawsuits from Florida to New York
to Washington state usually filed by wineries
or wine lovers. The lawsuits have pitted
wineries and small, retail wine stores against
wholesaler suppliers. Court rulings in recent years have been mixed.
A number of early rulings favored the states.
More recent decisions, including one earlier
this month in New York, favored the wine
industry. In New York, a federal judge ruled the state's
ban on direct shipments interferes with
interstate commerce because it treats in-state
and out-of-state wineries differently. New
York is one of 23 states that bans direct
consumer shipments of any alcohol into the
state, but allows New York wineries to ship
directly to consumers. A challenge to Florida's ban on direct sales
is up in the air after a federal appeals
court ordered the state to justify why it
also treats out-of-state wineries differently
than in-state wineries. Both sides of the debate acknowledge that direct
shipments, if allowed in all 50 states,
would still probably amount to only a small
portion of all wine sales. Currently, direct
shipments, including sales directly from
winery tasting rooms, account for less than
10 percent of all wine sales, according
to one Wine Institute estimate. In addition, a survey by the Wine and Spirits
Wholesalers of America found that 86 percent
of wine drinkers are happy with their local
selection of wine. ''It's a very elitist, minority issue,'' said
the wholesalers group's Wolf. ''They speak
loudly, but in terms of the actual interest
in wines not available locally, it's very
small. And they would tear down an entire
regulatory system to get what they want.''
But Gross, with the Wine Institute, said direct
sales are vital to many of the nation's
smaller wineries. ''A lot of wineries, their biggest sales are
right out of their tasting rooms,'' he said.
Wholesalers note there already are online alcohol
retailers who blatantly violate state laws
for direct shipments. One site brags that it will ship any alcohol
to all but six states. ''By placing this
order you agree that you are at least 21
years of age,'' one Web site reads. ''The regulations are being ignored nationwide,''
Wolf said. ''It's going to keep happening
until some kid orders online and ends up
killing someone.'' Richard Waddington, who runs an Internet wine
shop called OnLineVines.com from Washington
D.C., said it is up to the wine industry
to find a workable solution and stop engaging
in courthouse and statehouse battles. ''There just needs to be some sort of compromise,''
he said. On the Net: www.OnLineVines.com: Specialists in rare wines
www.wineinstitute.org: Wine industry lobbyists
www.freethegrapes.org: Group that supports wine
law reform www.wswa.org/: Wine and Spirits Wholesalers
of America --------------------------------------------------------------------------------------------------- Nantucket still a welcome port to 'exiled' Kozlowski Former TYCO CEO plots legal defense among supporters By Matthew Brelis, Boston Globe Staff NANTUCKET - Since being led into a New York
courtroom in handcuffs in September, L.
Dennis Kozlowski and his wife have spent
much of their time in exile, this exclusive
island serving as their own private Elba. The former chief executive of Tyco International
Ltd., unlike Napoleon, has the choice of
several venues for his exile, including
a $17 million apartment on New York's Park
Avenue, and a waterfront $10 million home
in Boca Raton, Fla. With his bail modified,
he can now spend Christmas skiing in Beaver
Creek, Colo., at his $9 million, eight-
bedroom ski-in chalet, with family and friends.
Recently, he has been in New York, meeting
with lawyers. But since he resigned June
3, he has spent most of his time on Nantucket. ''All their friends are here,'' said Wendy Valliere,
a friend and interior designer who bought
the now-famous $15,000 antique umbrella
stand for Kozlwoski's New York apartment,
as part of a $5 million interior design
job. ''They felt safe here, even though
the press has done their best to kill them
off.'' In fact, several Nantucket friends
were prepared to put up their property to
secure Kozlowski's $10 million bond, if
his former wife, Angie, had not posted it,
Valliere said. Even here, however, he can't escape his newfound
reputation as the poster boy for corporate
misbehavior. While Kozlowski, an avid yachtsman,
was out on the water, a fisherman - in a
mocking salute - raised his forearms, wrists
close together as if handcuffed, as he passed
Kozlowski, one year-round resident said
recently. So instead of running a corporation with 250,000
employees worldwide and buying up smaller
companies at a frantic pace, ''deal-a-month
Dennis'' Kozlowski keeps a low profile,
focusing on his legal defense. He and his
former deputy, Mark H. Swartz, were charged
with running an elaborate ''criminal enterprise''
through which they took more $600 million
from the company; separately, Kozlowski
also faces criminal charges that he evaded
$1 million in sales taxes on art purchases.
He speaks to his lawyers on a daily basis.
He and wife, Karen, have dined out at friends
or entertained close friends at their $5
million home on the eastern shore; Kozlowski
has a seat at a weekly poker game with year-round
islanders, including a fisherman and sign
maker. For the first time in many years, say those
familiar with his new life, Kozlowski, 56,
is paying his own bills. He submits them
to his attorneys who, in turn, forward them
to the New York district attorney's office
and then on to court for permission to use
his now-frozen funds to pay things as mundane
as electric bills ($267.57 in Colorado,
$1,047.26 in Florida and $726.46 on Nantucket),
and as extraordinary as the travel, lodging,
and meals for two months for the eight-member
crew of his vintage J-class sailboat Endeavour
($12,650). In a two-month period, all eight of Kozlowski's
requests have been granted by New York Supreme
Court Judge Martin Shulman, letting him
spend $773,528.42. Not included in that
amount, is a retainer - the figure is sealed
- for his cadre of lawyers. Of the $773,000,
about $247,000 went to pay Florida property
taxes. More than $400,000 is for the 130-foot
sloop Endeavour - $205,625 went to cover
the yearly insurance, $100,000 a month for
the salaries of the captain and seven other
crew members, $5,000 a month for the yacht's
managing agent, and $1,300 a month for the
crew's health insurance. ''No one truly owns Endeavour, she's part of
yachting history,'' Kozlowski is quoted
as saying on a Web page devoted to Endeavour,
which was Great Britain's entry in the 1934
America's Cup. ''I'm delighted to be the
current caretaker.'' Kozlowski bought the
yacht in 1999, reportedly for $16 million,
after it was restored. The Kozlowskis charged $7,200 on credit cards,
far less than the $25,000 that Swartz requested
for credit cards from his frozen accounts.
And his spending is well below that of John
Welch Jr., the former chief executive of
General Electric. His divorce proceedings
revealed he spends nearly $9,000 a month
on food, beverages, and wine, nearly $2,000
on clothes and $52,000 on gifts. The opulence is gone His life today is a far cry from the extravagance
of his days at the top of corporate America's
hierarchy - his Tyco-financed $15,000 antique
umbrella stand in the shape of a poodle;
a $6,000 shower curtain; and a 40th birthday
party for Karen in Sardinia, complete with
waiters dressed as gladiators, ice sculptures
carved to resemble Michelangelo's David,
and a cake with exploding breasts. People familiar with Kozlowski's daily routine
say he still spends time working with a
few charities, but will not name them. Having
the Kozlowski name associated with anything
now is problematic, and his troubles have
sent many who know Kozlowski underground.
He is radioactive; either people are too
embarrassed or too afraid to speak on the
record about him. Of the dozens of people
interviewed, only a handful would let their
names be used. On Nantucket, where he has owned his home since
1997, he is known as a generous man, giving
millions to island institutions, such as
Cottage Hospital or the Nantucket Historical
Association. In fact, the historical association's
is one of the few board memberships that
Kozlowski has not resigned since his legal
troubles began. But there, as elsewhere,
officials maintain a stony silence when
asked about the man. Associates say the
reticence is more to protect a benefactor
than out of guilt by association. Valliere, the interior decorator, said she,
too, was reluctant to talk, but did so because
''if no one who knows them and cares about
them talks, then none of the good parts
will come out. People are still innocent
until they are proven guilty.'' She defended
her decoration of Kozlowski's New York apartment,
saying the budget was $5.5 million and she
stayed within it. The apartment, she said,
is not some ''Liberace palace'' but similar
to other apartments on the Upper East Side.
The $6,000 shower curtain, she said, was
actually an upholstered wall that sealed
off part of an old bathroom and saved on
renovation costs. Amid all his troubles, friends say, Kozlowski
maintains a belief that he is innocent of
the charges, though the friends worry that
the public and prosecutors are eagerly seeking
scapegoats in the campaign against corporate
greed. ''These are volatile times for executives,''
said one member of Kozlowski's inner circle
on Nantucket. ''Tyco had 10 good years of
running up the stock price. It went down
and the attitude is someone should be punished.'' Talks of vindication In 27 years at Tyco, Kozlowski rose from accountant
to chief executive and analysts and the
business press called him one of America's
best executives. That reputation still brings
in a few business associates, seeking his
critique of nascent business plans. And
Kozlowski talks of vindication, and returning
to the business world. Not all of his past associates have stuck by
him. ''It is very heart-rending to find
you have been as wrong as I have been,''
said Robert Monks, a former Tyco board member
who was one of Kozlowski's biggest boosters.
''I never saw any clues of this,'' said
Monks, a shareholder advocate. Kozlowski's journey from a six-story tenement
in Newark to the top of corporate America's
hierarchy is almost as breathtaking as his
gilded demise. He grew up the son of a Newark
police detective and went to Seton Hall,
earning tuition money as a waiter and playing
guitar in a wedding band. He was a member
of the accounting club, played intramural
sports, and belonged to a business fraternity,
and graduated in 1968 with a degree in accounting.
One of Kozlowski's first jobs after college
was for the SCM Corp. In 1976, he landed
at Tyco. Eventually, the Jersey kid broke into the rarefied
atmosphere of New York high society. He
gave away millions, although much of it
was Tyco's money. His donations to places
like the Whitney Museum and Middlebury College
got him invitations to join the board of
trustees, an instant imprimatur of respectability.
Yet, at institutions like Middlebury and
Berwick Academy - where he was president
of the board - he frequently missed meetings. ''He came from nowhere and he made it big. It
is a terrific American success story,''
said New York psychoanalyst Stanley Renshon,
a political psychologist at City University
of New York, who has no firsthand knowledge
of Kozlowski. ''Why wasn't that good enough?
The answer has to be he never felt at home
with success, and because of that he was
not satisfied with it - with knowing how
far he had come and how well he had done.
If it reaches a level where you are not
truly satisfied when you have accomplished
a lot, then the next couple million will
not make that true.'' At other times in his past, Kozlowski also apparently
saw the need to inflate his accomplishments,
albeit on a smaller scale. His biography
in ''Who's Who in America'' says he received
an MBA from Rivier College, a small school
in Nashua in 1976. That information has
been in several news articles, as well as
a Thiokol press release from 1993 when he
was named to the board of that company.
But he did not receive a degree from Rivier,
although he took three courses there in
1977, according to school records. Kozlowski's
Tyco bio does not list the MBA, and friends
say he never spoke of it. But, in its most
recent sketch of Kozlowski, updated on June
12, after he resigned from Tyco, ''Who's
Who'' still listed the MBA from Rivier.
A person close to Kozlowski said he tried
to correct the Who's Who information ''years
ago.'' Contradictory statements Kozlowski also is an accomplished pilot, but
he has made contradictory statements to
associates about where he learned to fly.
Two friends, one speaking on condition of
anonymity, said Kozlowski told them he learned
to fly helicopters when he served in Vietnam. ''He showed me his helicopter and said it was
his pride and joy and that he flew in the
service in Cambodia,'' said one friend from
New Hampshire. Another friend, Valliere, said he flew for Air
America, the Central Intelligence Agency's
private air operation in Southeast Asia.
But the National Personnel Records Center
has no record of L. Dennis Kozlowski enlisted
in any branch of the armed services and
an official at the Air America Archives
at the University of Texas at Dallas, could
not find Kozlowski on any pilot rosters.
An associate said Kozlowski never flew in
Southeast Asia. ''I heard those stories
and I don't know where they came from,''
said one Kozlowski associate. ''The puzzle is he is truly accomplished in
so many ways and had a resume that anyone
I know would be proud of having,'' said
Renshon, the psychologist. ''You come to
the conclusion there is a gap between what
he might feel like he needs to accomplish
and what he did accomplish ... The differences
start to fuzz in the person's mind, and
it is in their self-interest to have those
differences fuzzed up.'' Many of his business associates agree. ''He
created all this shareholder value,'' said
one. ''I don't get the essence that this
was straight greed, but more `look at the
incredible success I have had, If I want
to buy a place in Nantucket, what is paying
$5 million to me?' I have not talked to
him about this, but I think in his mind
the line between his finances and the company's
finances blurred.'' ''The guy took a good company and started making
so much money for the company that he thought
it was his own,'' said a friend from New
Hampshire. He ''didn't think anyone would
mind if he took a little.'' Matthew Brelis can be reached at brelis@globe.com. ( The courts gave him a month to leave Massachusetts
and stay at one of his three estates to ski in Colorado this winter. "Took a little," wow!!! Editor ) Send to a colleague and ask them to subsribe. www.leasingnews.org
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