Tyco’s Ex-CFO Not Certain if He Signed Notes for Loans

Former Tyco International Ltd. Chief Financial Officer Mark Swartz admitted Thursday that he received millions of dollars in company loans but said he was uncertain whether he signed promissory notes as the program required.

Under intense questioning by Manhattan prosecutors, Swartz said Tyco’s loan program required executives to sign promissory notes when they took loans. But after five days on the witness stand, Swartz was lost for a definitive answer when asked if he signed notes for loans given between 1999 and 2001.

“If you had asked me that question before the trial began I would have said, ‘Yes,’ ” Swartz replied. “Now I’m not certain.”

Prosecutors accuse Swartz and former Tyco Chairman L. Dennis Kozlowski of using the employee loan program as a revolving charge account to fund their lavish lifestyles. Several former Tyco directors have said the program was designed to help executives pay federal taxes on vested restricted stock.

Swartz probably will be the only defense witness at the corruption trial. He has denied that he and Kozlowski illegally pocketed $600 million in unauthorized compensation and profits on inflated stock.

Swartz said the Tyco board’s compensation committee in 1997 approved changes that allowed executives to borrow larger amounts and for purposes other than paying taxes.

Manhattan Assistant Dist. Atty. Marc Scholl asked if anyone documented the program’s change. “There is no documentation that I’ve seen,” Swartz said.

With little documentation about how Tyco’s executive loan and bonus programs may have evolved, the trial has turned into a contest pitting the recollections of Swartz against the testimony of directors.