Trustee Resigns Kozlowski Credited for Tyco Donation to Middlebury

Author: Pierce Graham-Jones

Dennis Kozlowski resigned from Middlebury College's Board of Trustees last Friday, just two days before his involvement with the school was highlighted in the business section of The New York Times. These events arrive amidst a wave of scandalous publicity, which has grown considerably in the past two weeks, surrounding Kozlowski's financial dealings as CEO of Tyco International.
Middlebury's name has now been included in this publicity. In the late 1990s, the College received a $2.5 million gift made by Tyco to the school, but used by Middlebury to create a fund named after Kozlowski, The Kozlowski Fund. The New York Times cited this inaccurate accreditation as the primary example of what it called "the murky line between corporate philanthropy and [chief executives'] personal philanthropy." Director of Public Affairs Phil Benoit acknowledged that the fund was financed by Tyco, but did not issue a statement addressing either the article or the fund.
The chairman of the Board of Trustees accepted Kozlowski's resignation without explanation Friday. Commenting on the resignation, President John McCardell stated, "I remain firm in my belief that Mr. Kozlowski was a good trustee and a strong supporter of Middlebury College. I regret that he finds himself in his current circumstances, but I will not presume to supplant our judicial system in determining the accuracy of the allegations made against him."
Kozlowski's circumstances have progressed from bad to worse in the past two weeks. On Sept. 12 he, along with Tyco's former chief financial officer, Mark H. Swartz, were indicted for enterprise corruption and grand larceny. These charges are the result of allegations that the two misallocated $170 million of company funds for personal benefit and made another $430 million by selling Tyco stock at artificially inflated prices, according to the Sept. 13 edition of The Washington Post. The recent indictment is in addition to Kozlowski's indictment for state tax evasion earlier this year.
Kozlowski pleaded not guilty to all charges; a guilty verdict could cost him 30 years in jail. "Dennis Kozlowski was a recognized business leader and believes that the charges against him are unfounded and unfair," stated Steven Kaufman, Kozlowski's attorney, in the same Washington Post article.
On Sept. 19, Kozlowski was released after his ex-wife posted $10 million of his $100 million bail. His release is temporary, pending a bail trial scheduled for Sept. 27 to determine whether or not the posted money is connected with the allegedly stolen money.
Previous to this debacle, Kozlowski contributed significantly to the school in ways other than the incident cited above. Another fund, The Cheryl M. '96 and Sandra L. '99 Kozlowski Financial Aid Fund, was financed by Kozlowski with his own money. Commented Benoit, "Dennis Kozlowski's association with Middebury College as a parent, as a donor and as a trustee has benefited this institution in many ways. As he leaves the Board of Trustees, we are very grateful for his many positive contributions."