America's corporate elite

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Far from the bad news of the stock market and the cascading bankruptcies and financial scandals, America's corporate elite including some of the business leaders under investigation are still spending their summers in unbowed luxury.

One favorite destination is the island resort of Nantucket, off the Massachusetts coast, a place filled with multimillion-dollar mansions.

The home under the most scrutiny at the moment is a 7,000 square foot mansion owned by Dennis Kozlowski, former CEO of Tyco International. With a four-bedroom guest house and a garage on 3.8 oceanfront acres, the property is valued at almost $6 million. Kozlowski also owns residences in Florida, New Hampshire and Manhattan.

Kozlowski, 55, was an American corporate hero until his company's finances came under question, the stock collapsed and he was indicted by a grand jury in New York City. Last month, he pleaded not guilty to charges that he cheated on his personal taxes, allegedly trying to get out of paying sales tax on some $13 million worth of art, including a Renoir and a Monet.

But to the outrage of prosecutors, no sooner had Kozlowski left the courthouse than he was reported to be back in Nantucket and out on his $20 million yacht, the famed Endeavour. Built in 1934, the Endeavour is a throwback to another time, with a cherry wood deck and a working fireplace, the kind of showy excess Kozlowski has become famous for among Nantucket's super-rich summer crowd.

Earlier this month, when Kozlowski and his boat came to be seen as symbols of corporate America's infectious greed, he and the boat tried to disappear. Normally a regular at Nantucket's best night spots, Kozlowski has only been seen once this month, at a dinner at his favorite French restaurant. After it made headlines, the Endeavour moved to Newport, R.I., later returning to its private $45,000-a-year slip in Nantucket.

An American Nobility?

Author Kevin Phillips, whose recent book Wealth and Democracy tracks the history of corporate greed in America, says Kozlowski and others act as if they are above the law.

"He's basically saying, 'Hey, out there with the meatloaf, I don't share your pain! Watch me! I'm having champagne. You're having a TV dinner. Hah! Who's a loser?,'" said Phillips. "It reflects, I think, their own view of themselves at the peak, as kind of an American nobility."

Phillips believes the United States is in a "major historical greed period," and thinks Federal Reserve chairman Alan Greenspan understated the case when he said recently that much of the business community was gripped by "infectious greed." Phillips calls it an epidemic.

Mansion Under Construction

Another embattled executive, former WorldCom CFO Scott Sullivan, is building an enormous mansion in Boca Raton, Fla. Sullivan is accused by WorldCom of cooking the books, leading to the company's bankruptcy this week, the largest bankruptcy in American history. On the very day WorldCom filed for bankruptcy, construction continued at full pace at Sullivan's gigantic mansion.

Sullivan, who drives around Boca Raton in a silver Range Rover, says everything he did was legal. Under Florida law, his principal place of residence is essentially untouchable safe from civil lawsuits and creditors.

But Sullivan's holdings are nothing compared with those of his ex-boss, former WorldCom CEO Bernard Ebbers, who owns a Mississippi mansion and more than 600,000 acres of property roughly the size of Rhode Island.

Construction Continues

Up in New York state, construction has continued on the country estate owned by Martha Stewart, who is under investigation for insider trading. The estate, in Bedford, N.Y., is undergoing a major expansion.

In Houston, work continues on a multimillion-dollar mansion being built by former Enron CFO Andrew Fastow, even as five congressional committees, the SEC, and the FBI investigate him.

And in the Bel Air section of Los Angeles, workers are still busy on the $94 million, 8-acre, 50-room estate owned by Gary Winnick, the former chairman of Global Crossing, which filed for bankruptcy in January and is under investigation by the SEC and the FBI. Winnick used to boast of his big spending ways until his company's stock went from $60 a share to 5 cents a share. He cashed in some $734 million of stock before the collapse.

Laid-Off Employees Not Amused

The investigations, including that of Kozlowski in Nantucket, are only picking up momentum. There are new allegations, strongly denied by his lawyer, that Kozlowski used corporate money, not his own money, to buy his fancy homes and his $20-million yacht.

Kozlowski's lavish lifestyle does not go down well among the thousands of Tyco employees who have lost their jobs and much of their life savings.

"It's sickening," said laid-off employee Ralph Hicks when shown pictures of Kozlowski's mansion in Nantucket and beachfront estate in Boca Raton. Hicks had worked for 10 years at Tyco's undersea fiber-optic cable plant in Newington, N.H.

"The American dream is one thing. We all need that," said Melissa Tucker, another 10-year veteran of the plant who has been laid off. "But this is such an extreme it's ridiculous. He doesn't seem to have any kind of moral being, thinking about what's going on and how he got it. It's just there for him for his taking. It hurts. It hurts."



-- Cherri (whatever@who.cares), July 28, 2002


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