"We now dole out the same punishment for executives with expensive bathrooms as we do for terrorists with bombs."

I live and work in Manhattan, which sometimes makes for an unusually uncomfortable -- though intellectually stimulating -- commute. Unusually uncomfortable because this morning I spent rush hour pressed rather unfortunately against two short, overweight, sweating bald men in expensive-looking suits. I have no idea who they are or where they work – but I do know their opinions on the Tyco case. As does everyone else on our subway car.

The unwritten rule of New York City subways is that you don't talk. You read a newspaper, listen to your iPod, sleep or stare studiously at your shoes as if they were suddenly the most interesting thing imaginable. But everyone knows to generally avoid conversations with strangers. That's why the rest of the subway car was packed with people silently ignoring one another, which was precisely my modus operandi. Not so for the two men sharing my three square feet of subway space. From the minute they boarded at Grand Central, they loudly and brashly declared how it was "about time that Kozlowski got what was coming to him."

For those of you who somehow missed it, L. Dennis Kozlowski, the former chief executive of Tyco International, was just sentenced to serve 8 1/3 to 25 years in prison and pay approximately $170 million in fines and restitution. Though my seemingly hot and bothered subway companions didn't mention this, Mark H. Swartz, Tyco's former chief financial officer, received a similar prison term and was ordered to pay $72 million in fines and restitution. By the time we reached the Union Square stop, the two men had made it clear to the whole subway car that this was another Enron, and we were lucky that Eliot Spitzer was cleaning up Wall Street.

That was when I shot them my best quizzical look -- attempting to explain (with a few well placed creases on my forehead and a "you gotta be kidding me" smirk) that the Tyco case bears little or no resemblance to Enron, and Kozlowski was prosecuted by the Manhattan D.A.'s office, not Eliot Spitzer. My quizzical look apparently failed to convey this information, which is why I'm taking the opportunity to do so now.

The Tyco case differs significantly from other cases against recent high-profile executives at corporations such as Worldcom, or yes, Enron, which both focus on accounting fraud. Enron, in particular, wove a complex series of layered corporations and used these various shells to better avoid any true accounting of its financial house of cards. Enron and Worldcom went bankrupt, leaving retirees short on money for food and medicine in their old age.

Tyco is not about accounting fraud at all. It is about statues that urinate vodka and preposterously overpriced shower curtains (suffice it to say, these guys certainly didn't spare company expenses when throwing a party). Nonetheless, Tyco is still in business. It is still trading at somewhere between 25 and 35 dollars per share, and has been doing so for close to two years now. It wasn't the best investment, but the market itself hasn't been particularly kind to investors generally during the same period – and, lest we forget, Kozlowski and Swartz are collectively paying about $240 million in fines and restitution.

So we know the Tyco case, unlike Enron and its progeny, isn't about punishing rich, powerful corporate executives for hurting the investing public. Rather, it reflects the prevailing societal opinion of Gordon Gekko's creed. It is about whether greed -- for lack of a better word -- is good.

The prosecutors in the Tyco case didn't focus on damage to shareholders because there wasn't any dramatic evidence of shareholder suffering for them to exploit. The most notable theme of the Tyco case remains the $6,000 shower curtain. As absurd as it sounds, it amounts to an example of -- at most -- making unfair use of company funds to pay for lavish personal effects. This case isn't about the crimes charged. It is about greed in a post-Enron world.

Ahmed Rassan (the so-called Millennium bomber, named for his failed attempt to blow up Los Angeles International Airport on January 1, 2000) is serving 22 years in prison -- the same sentence frequently handed down to rapists and murderers. We have seemingly become so angry at "greedy" corporate executives that we now dole out the same punishment for executives with expensive bathrooms as we do for terrorists with bombs. Yet the guys on the subway with me didn't think it was enough. "Yeah, but it’ll be easy time, just like Martha at that Camp Cupcake place," one said as we stopped at the City Hall subway station, ironically, just underneath the courthouses.

My patience wearing thin, I looked knowingly at a woman seated near us reading a newspaper. Unlike Martha Stewart, or for that matter Ken Lay or Bernie Ebbers, the Tyco executives were charged in New York State court -- not federal court. They aren't going to a "Club Fed." Based on the length of their sentences, they will likely end up spending their time in a New York State maximum security facility like Attica or Sing Sing, with a cellmate who is likely a rapist or murderer, maybe both.

My knowing look failed, as the woman never made eye contact with me. She got out at the Wall Street stop, as did the two sweaty men. I followed them all slowly out the exit, thinking to myself that these guys likely grew up emulating Gordon Gekko. But that was back in 1987, well before the tech bubble burst and before Enron. Back then, greed was good. Back then, Ivan Boesky and Michael Milken each were convicted -- and served 22 months each. Now we have all become so angry at disappointing stock market returns and our own portfolios that we sentence greedy executives to what may amount to life sentences in maximum-security facilities.

As I headed toward the elevator in my office building I realized that the woman with the newspaper was holding the elevator door open for me. She smiled politely at me and went back to reading... an article about the Tyco case. I smiled back, and then stared down at my shoes, very intently, as the elevator doors closed.

uretsky@phillipson-uretsky.com

10/2/05