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Tyco Verdict: Guilty; Polls Open in Iran
Aired June 17, 2005 - 14:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Well, a frustrating day to say the least for some of golf's bests. In fact, one of the most popular players is probably wishing he hadn't even bothered teeing off the second round of the U.S. Open.
CNN's Mark McKay with all the action at Pinehurst.
MARK MCKAY, CNN CORRESPONDENT: Kyra, we need you, a big heavy hitter. What are you 200, 240 off the tee? We need you out here at Pinehurst No. 2.
PHILLIPS: I try, Mark, I try.
MCKAY: I know you do. I know you're a great player and I know you're settling in for what should be a great weekend of golf. I tell you what, Kyra. If you're steady, you probably have a chance to win the 105th U.S. Open.
Vijay Singh, one of the steadiest players on tour, feels pretty about good about his position. He's even par after back-to-back 70s. Phil Mickelson, on the other hand, he tried to put -- well, his best face on a seven over par round that leaves him plus six for the championship.
(BEGIN VIDEO CLIP)
PHIL MICKELSON, SHOT 7-OVER-PAR 77: It's a tough course to turn things around on because you just can't make birdies. The more you try to make birdies, the more bogeys you're going to make. I wasn't really trying to make birdies, I was trying to just salvage pars and had a tough time doing it. It's a tough golf course.
VIJAY SINGH, SHOT EVEN-PAR 70: I feel like I'm in a good position right now. And, you know, if I can go out there and figure out the place of the greens, come out strong tomorrow, who knows. See what happens.
(END VIDEO CLIP)
MCKAY: Even par, where Singh currently sits, looks pretty good at this point, as par is expected to be at a premium as head into the weekend. Now, Corey Pavin, the veteran, he's out on course No. 2, looking to play into the weekend as I speak. This after watching his son graduate last night in California. Pavin boarded a private jet after playing his opening round on Thursday in North Carolina, he flew cross country in time to see his son Ryan accept his diploma. Pavin then flew back late last night, making his tee time today. Kyra, he'll be nothing if not a bit tired at dusk.
PHILLIPS: No doubt. Good man. Mark McKay, we'll keep checking in with you. Thank you so much.
Well, straight ahead, Iranians line up to cast their ballots and be heard. Millions of voters turn out. But what will today's election bring for that country and its future? Analysts of today's vote coming up on LIVE FROM.
(COMMERCIAL BREAK)
PHILLIPS: Two verdicts to tell you in two different cases.
We are told that a verdict is in on the Tyco case. You remember this story we've been talking about for a long time. Former CEO Dennis Kozlowski and former finance chief Mark Swartz, both accused of bilking the company out of hundreds of millions of dollars. We have been told that the jury has reached a verdict. Our Allan Chernoff is there outside the courtroom. We'll have him up live as soon as he's got the information.
Another verdict that is in, and we're getting more information on this. All guilty with regard to nine murder counts. We're talking now about now the murder trial of Marcus Wesson. There we go. There he is. You'll remember this case. Wesson -- back in 2004 police came across his home, where they found nine people slain inside his home. Nine family members, including his wife.
Well, he's been found guilty on nine counts of murder. We are still waiting on the 14 counts of sexually abusing his daughters and nieces. We are monitoring this right now. Nine guilty verdicts there of murder, moving on, following with 14 counts of sexually abusing his daughters and nieces. We'll let you know as soon as we get the verdicts, rather, on those charges.
Let's go back now to the verdict on Tyco. Allan Chernoff now joining us live. What do we know?
ALLAN CHERNOFF, CNN CORRESPONDENT: Kyra, well, we do have verdicts on the first three counts for Dennis Kozlowsi. And the verdicts are guilty for count number one, number two and number three. Those are grand larceny charges. And each of those counts carries a penalty of up to 25 years in prison. I'm getting more information from inside of the courtroom right now. And so it is certainly not looking good at all.
Keep in mind, this is Dennis Kozlowski -- the second trial for Mr. Kozlowski, formerly the chief executive officer of Tyco, which had been a Fortune 500 company. Mr. Kozlowski and his former chief financial officer Mark Swartz had been charged with stealing $170 million from Tyco and then taking another $430 million through stock sales.
We have guilty on falsifying business records. And those were some of the minor charges. But Mr. Kozlowski, also guilty on grand larceny, additional grand larceny charges. So it really seems a major defeat across the board for Mr. Kozlowski.
And we still yet to have hear the finding of the jury for Mark Swartz. Mark Swartz, the former chief financial officer for Tyco. But it seems that Mr. Kozlowski, found guilty, according to the e- mails I'm getting from my producer inside of the courtroom. It appears that he is guilty on all charges thus far. We're still waiting to hear for a few more charges.
But Mr. Kozlowski and Mr. Swartz, the two of them were confronting 23 counts. And this grand larceny, also, a conspiracy charge and falsifying business documents and securities fraud. Very serious charges against the former top two executives of Tyco.
It has been a long deliberation. They've been deliberating for a week and a half. This morning, the jury was listening to a re-read of some testimony regarding one certain transaction in which the executives had taken unauthorized bonuses. They had claimed that the board of directors had authorized all these bonuses and forgiven loans.
Mr. Kozlowski, by the way, had used a dead man's defense. He had said and his lawyers had argued during the case, that Phil Hampton (ph), the former head of the compensation committee at Tyco, had actually approved all of these bonuses. But Mr. Hampton passed away in 2000. He died from cancer. And apparently, according to Mr. Kozlowski, he was the only director who was actually aware of all these bonuses and forgiven loans. The dead man's defense. But it appears that dead man's defense is not working, has not gone well with the jury.
Now we have the counts against Mark Swartz. Guilty on grand larceny for Mark Swartz, as well. And I'm getting more counts, guilty also. So far we have six grand larceny against Mark Swartz, guilty. And then guilty also on the remaining grand larceny. We're still waiting to hear the rest of the charges, the rest of the decisions from the jury on Mark Swartz, the former chief financial offer of Tyco.
Kyra, this is a big victory for the Manhattan district attorney, 85-year-old Robert Morgenthau. His team had been heavily criticized during the first trial. The trial went on and on and on for nearly six months. And then, as you'll recall, the first trial ended in a mistrial. But now it certainly is a full victory for the Manhattan district attorney.
And we are also finding that Mr. Swartz has been found guilty by the jury of conspiracy and also securities fraud and falsifying business records. So a complete victory for the Manhattan district attorney here. Only one count that I find from my producer. Not guilty on count 17, falsifying business records. But otherwise, guilty on all the other falsifying business record counts and the most serious charges of grand larceny. Again, the charge of grand larceny itself carries a penalty in prison of as much as 25 years -- Kyra.
PHILLIPS: All right. I'm writing all this down, quickly, as you're giving me the count down here of the guilty verdicts. Allan Chernoff, as you continue to get updated information, I want to ask you to continue to do that. Stay with us.
Jeffrey Toobin on the line, our legal analyst. Jeffrey, you were able to catch everything Allan said, right?
JEFFREY TOOBIN, CNN LEGAL ANALYST: I was not, unfortunately.
PHILLIPS: All right. Well, here we -- in a nutshell, Kozlowski and Swartz, both found guilty. Grand larceny, conspiracy, securities fraud. We're talking up to 25 years in prison, right?
TOOBIN: A major, major victory for the Manhattan district attorney's office, after the extremely frustrating hung jury last year in this case. And you know, sort of a real post-script to the excesses of the Enron era. You know, the man with the $7,000 shower curtain is now a convicted felon.
PHILLIPS: Isn't this -- and I hope my memory serves me correctly. Isn't this the famous toga party, Jeffrey?
TOOBIN: That's right. The party in Sardinia that was largely paid for by the Tyco company, which was -- much about Kozlowski turned into symbols of the excesses of that period where companies subsidized sort of absurdly lavish lifestyles. And the party in Sardinia was one example. The $7,000 shower curtain was another. And now it looks like he's going to pay a heavy price.
PHILLIPS: Charged with stealing $170 million from Tyco by manipulating a loan program for company executives and pocketing another $430 million through stock sales. Now guilty verdicts coming forward for both the former CEO Dennis Kozlowski, also Mark Swartz, the former finance chief. What kind of message does that send out, Jeffrey?
TOOBIN: Well, I -- the message is that the boom years are over. I think, unfortunately, this verdict was so long in coming that people have to scratch their heads to remember who Dennis Kozlowski is. You know, the message is that white collar criminals can get convicted, too, although it often takes a very long time to do it.
PHILLIPS: Now what's the reality of these men serving 25 years in prison?
TOOBIN: You know, the reality is, they are in big, big trouble. Not only because they certainly serve many years in prison, they will serve their time in state prison, which is a lot rougher than federal prison. They're no country clubs in the New York state system. So Kozlowski an Swartz are looking at serious hard time, not just a passing of few months in a prison camp. This is hard time.
PHILLIPS: Jeffrey Toobin. Quite a switch from Martha Stewart's time that she served, that's for sure. Our senior legal analyst, Jeffrey Toobin, thank you so much.
Let's go back to Allan Chernoff, outside the courthouse, just to button this up once again. Guilty verdicts in the Tyco case. Bring us up to date real quickly, Allan, if you've got anything else in addition to grand larceny and conspiracy and securities fraud.
CHERNOFF: That's right, Kyra. And we have some detail from my producer Winnie Dunbar (ph) inside the courtroom. She's telling us that Mr. Kozlowski's face is scarlet red. His daughter's face is down in her hands. And Mark Swartz's wife looks as if she is in shock. And the wife of Dennis Kozlowski also is crying right now. So clearly, very emotional response to this guilty verdict against both Dennis Kozlowski, the former chief executive director of Tyco International, and Mark Swartz, the former chief financial officer.
They had been charged and now have been found guilty of stealing $171 million of cash from the company and then another $430 million through stock sales. And they had spent the money lavishly, particularly Mr. Kozlowski. Kyra you mentioned that party in Sardinia, on the island of Italy. It was a 40th birthday party for the wife of Dennis Kozlowski. And what Mr. Kozlowski did is he charged half of it, $1 million, to Tyco.
He also spent the money on lavish apartments. One 5th Avenue apartment he purchased for $18 million, then spent an additional $12 million furnishing that apartment. That the apartment with the $6,000 shower curtain and also the $15,000 poodle-ornamented umbrella stand. So he certainly did spend the money very lavishly.
During the first trial, the district attorney's office had pointed out very often, frequently, to the jury all about the spending. But during the second the second trial, there was not as much focus on that. It clearly was a much tighter prosecution. Nonetheless, the case still lasted for a good five months, including the jury deliberations. So it really is a big victory now for the district attorney of Manhattan. And I'm just checking my Blackberry here to look for more details.
My producer again writing that Mark Swartz looks as if he in shock, as if nothing happened, and the entire Kozlowski family now crying. Perhaps you had a sense from the defendants that they maybe were Teflon-coated after that first trial. Mark Swartz, in particular, was extremely curious. I've never seen a defendant simply so happy. Every time he walked in and out of the courtroom, he would be smiling. But clearly, we would not anticipate that when he steps out behind us in a matter of minutes.
Kyra, back to you.
PHILLIPS: Allan Chernoff, you mention the shock on the faces of the families of those two. I'm still in shock over the $6,000 shower curtain and the poodle umbrella holder. Allan Chernoff, outside the courtroom. Guilty verdict on the Tyco case. Allan, thank you. We'll continue to update all of you on this. More LIVE FROM right after a quick break.
(COMMERCIAL BREAK)
PHILLIPS: Decision day in Iran: millions of voters are flocking to the polls to pick a new president. It's a tightly contested race, pitting religious conservatives against moderate reformists. And among other things, the outcome could well decide the future direction of the country's strained relations with the West.
Joining me now with more on the election and what it means, our own Asieh Namdar. And on the telephone from Tehran, Iranian blogger Hossein Derakhshan.
Hossein, we'll get to you in just a minute, but Asieh, you're a journalist, but you also grew up in Iran. And you remember the days where it was Democratic.
ASIEH NAMDAR, CNN HEADLINE NEWS: Well, I wouldn't say, Kyra, it was totally democratic. You know, the shah was a monarch. And it was -- as modern as it was, there were definite issues there. But as far as my childhood goes when I was growing up, I have wonderful memories of my childhood.
You know, I was too young to know what was going on. I remember going on vacation and family gatherings and going to a Catholic school. Oh, gosh, there are the pictures.
PHILLIPS: That's OK. But it shows that this is not the Iran that we hear about now. And you actually went back there. You talked to people there in Iran and they actually said to you what?
NAMDAR: They are deeply dissatisfied. They are very frustrated and they are in desperate need of change. They want something to happen. I mean, from cab drivers to doctors to lawyers to housewives, everyone there wants change and is fed up with the system.
PHILLIPS: And Hossein, you're a blogger in Iran. First of all, that's a big risk for to be blogging in Iran, isn't it?
HOSSEIN DERAKHSHAN, IRANIAN BLOGGER (via telephone): It is, actually. But this is a small window of opportunity that I'm using, because the election time is usually -- the government during the election time is much more relaxed and quite easy going. Because they don't want to keep the turnout low by doing negative stuff.
PHILLIPS: So what are people saying on the blogs? You know, when they have a chance to talk without showing their faces or giving their names, what are they saying? The younger people, the older people?
DERAKHSHAN: You can -- you can basically see whatever you're hearing on the streets and in taxies and all that kind of (INAUDIBLE). Basically web logs are recording the political debate that is happening outside the virtual world.
And it's just recording it because, it's not like the Saddam Hussein era in Iraq or North Korea where nobody can question anything, nobody can talk about their leaders. You know, people are swearing them. And it's very, very common if you're talking to some Iranian and you hear that they are talking about how they're going to do these sort of changes, how they're tired. Nobody is scared of criticizing the regime when they're this parties, they're in taxies and stuff like that.
So, blogs are sort of resonating that type of stuff. But at the same time, the blogs -- because blogs are written by the majority of the Iranian society, you know 70 percent are under the 30 years of age now. And they're basically not very political. (INAUDIBLE) the past years of disillusion and the reformist movement. But now, since the mood has changed in the past few days, basically, and now we're going to see another surprise in terms of the election results. And I'm hearing some people saying that the reformist candidate is going up. And he will probably beat the former president, Mr. Rafsanjani.
And thanks to the blogging thing...
PHILLIPS: Hossein talks about the reformist candidate, Asieh, gaining ground here. But at the end of the day, does this election really mean something, because the Guardian Council, the hardliners still is in charge on who can run and who can't run?
NAMDAR: You're absolutely right, Kyra. The guardian council is basically a 12 member body, hard liners, very conservative. They decide which candidate can have a chance and which can not. 1,000 people registered to vote, 6 or 7 were elected. 93 women registered to vote, none were accepted. And that's the problem, at the end of the day does it really matter who is the president of Iran?
PHILLIPS: Shirin Ebadi, the Nobel Prize winner there in Iran says, look, we don't want another revolution, we don't want a hostage crisis. We want things to change, but the U.S. can't deal with the hard liners.
NAMDAR: And in fact, she actually has a very interesting approach. She says the EU and the United States, instead of focusing so much on Iran's nuclear program, should focus on the people behind the nuclear program, who make all the decisions. So tell the Iranian government we're not going to deal with you, especially the Europeans who have had commercial dealings with Iran. We're not going to make any business deals with you unless you make concrete steps to make concrete changes to free political dissidents, to open up the 90 newspapers that have been shut down and really to make substantial charges in the way people's lives are run on a daily basis.
PHILLIPS: You make a good point about the media, that's why Hossein Derakhshan has of course a very popular site going on with his blogging. Hossein, thank you so much. Asieh, I know you're going to continue to follow this for us. We're following the elections, what it means for the U.S. And, you know, change has to happen somewhere. Thank you very much.
All right. Well, it's time for a check on the financial markets. Chris Huntington live from the New York Stock Exchange -- Chris.
(MARKET REPORT)
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Aired June 17, 2005 - 14:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Well, a frustrating day to say the least for some of golf's bests. In fact, one of the most popular players is probably wishing he hadn't even bothered teeing off the second round of the U.S. Open.
CNN's Mark McKay with all the action at Pinehurst.
MARK MCKAY, CNN CORRESPONDENT: Kyra, we need you, a big heavy hitter. What are you 200, 240 off the tee? We need you out here at Pinehurst No. 2.
PHILLIPS: I try, Mark, I try.
MCKAY: I know you do. I know you're a great player and I know you're settling in for what should be a great weekend of golf. I tell you what, Kyra. If you're steady, you probably have a chance to win the 105th U.S. Open.
Vijay Singh, one of the steadiest players on tour, feels pretty about good about his position. He's even par after back-to-back 70s. Phil Mickelson, on the other hand, he tried to put -- well, his best face on a seven over par round that leaves him plus six for the championship.
(BEGIN VIDEO CLIP)
PHIL MICKELSON, SHOT 7-OVER-PAR 77: It's a tough course to turn things around on because you just can't make birdies. The more you try to make birdies, the more bogeys you're going to make. I wasn't really trying to make birdies, I was trying to just salvage pars and had a tough time doing it. It's a tough golf course.
VIJAY SINGH, SHOT EVEN-PAR 70: I feel like I'm in a good position right now. And, you know, if I can go out there and figure out the place of the greens, come out strong tomorrow, who knows. See what happens.
(END VIDEO CLIP)
MCKAY: Even par, where Singh currently sits, looks pretty good at this point, as par is expected to be at a premium as head into the weekend. Now, Corey Pavin, the veteran, he's out on course No. 2, looking to play into the weekend as I speak. This after watching his son graduate last night in California. Pavin boarded a private jet after playing his opening round on Thursday in North Carolina, he flew cross country in time to see his son Ryan accept his diploma. Pavin then flew back late last night, making his tee time today. Kyra, he'll be nothing if not a bit tired at dusk.
PHILLIPS: No doubt. Good man. Mark McKay, we'll keep checking in with you. Thank you so much.
Well, straight ahead, Iranians line up to cast their ballots and be heard. Millions of voters turn out. But what will today's election bring for that country and its future? Analysts of today's vote coming up on LIVE FROM.
(COMMERCIAL BREAK)
PHILLIPS: Two verdicts to tell you in two different cases.
We are told that a verdict is in on the Tyco case. You remember this story we've been talking about for a long time. Former CEO Dennis Kozlowski and former finance chief Mark Swartz, both accused of bilking the company out of hundreds of millions of dollars. We have been told that the jury has reached a verdict. Our Allan Chernoff is there outside the courtroom. We'll have him up live as soon as he's got the information.
Another verdict that is in, and we're getting more information on this. All guilty with regard to nine murder counts. We're talking now about now the murder trial of Marcus Wesson. There we go. There he is. You'll remember this case. Wesson -- back in 2004 police came across his home, where they found nine people slain inside his home. Nine family members, including his wife.
Well, he's been found guilty on nine counts of murder. We are still waiting on the 14 counts of sexually abusing his daughters and nieces. We are monitoring this right now. Nine guilty verdicts there of murder, moving on, following with 14 counts of sexually abusing his daughters and nieces. We'll let you know as soon as we get the verdicts, rather, on those charges.
Let's go back now to the verdict on Tyco. Allan Chernoff now joining us live. What do we know?
ALLAN CHERNOFF, CNN CORRESPONDENT: Kyra, well, we do have verdicts on the first three counts for Dennis Kozlowsi. And the verdicts are guilty for count number one, number two and number three. Those are grand larceny charges. And each of those counts carries a penalty of up to 25 years in prison. I'm getting more information from inside of the courtroom right now. And so it is certainly not looking good at all.
Keep in mind, this is Dennis Kozlowski -- the second trial for Mr. Kozlowski, formerly the chief executive officer of Tyco, which had been a Fortune 500 company. Mr. Kozlowski and his former chief financial officer Mark Swartz had been charged with stealing $170 million from Tyco and then taking another $430 million through stock sales.
We have guilty on falsifying business records. And those were some of the minor charges. But Mr. Kozlowski, also guilty on grand larceny, additional grand larceny charges. So it really seems a major defeat across the board for Mr. Kozlowski.
And we still yet to have hear the finding of the jury for Mark Swartz. Mark Swartz, the former chief financial officer for Tyco. But it seems that Mr. Kozlowski, found guilty, according to the e- mails I'm getting from my producer inside of the courtroom. It appears that he is guilty on all charges thus far. We're still waiting to hear for a few more charges.
But Mr. Kozlowski and Mr. Swartz, the two of them were confronting 23 counts. And this grand larceny, also, a conspiracy charge and falsifying business documents and securities fraud. Very serious charges against the former top two executives of Tyco.
It has been a long deliberation. They've been deliberating for a week and a half. This morning, the jury was listening to a re-read of some testimony regarding one certain transaction in which the executives had taken unauthorized bonuses. They had claimed that the board of directors had authorized all these bonuses and forgiven loans.
Mr. Kozlowski, by the way, had used a dead man's defense. He had said and his lawyers had argued during the case, that Phil Hampton (ph), the former head of the compensation committee at Tyco, had actually approved all of these bonuses. But Mr. Hampton passed away in 2000. He died from cancer. And apparently, according to Mr. Kozlowski, he was the only director who was actually aware of all these bonuses and forgiven loans. The dead man's defense. But it appears that dead man's defense is not working, has not gone well with the jury.
Now we have the counts against Mark Swartz. Guilty on grand larceny for Mark Swartz, as well. And I'm getting more counts, guilty also. So far we have six grand larceny against Mark Swartz, guilty. And then guilty also on the remaining grand larceny. We're still waiting to hear the rest of the charges, the rest of the decisions from the jury on Mark Swartz, the former chief financial offer of Tyco.
Kyra, this is a big victory for the Manhattan district attorney, 85-year-old Robert Morgenthau. His team had been heavily criticized during the first trial. The trial went on and on and on for nearly six months. And then, as you'll recall, the first trial ended in a mistrial. But now it certainly is a full victory for the Manhattan district attorney.
And we are also finding that Mr. Swartz has been found guilty by the jury of conspiracy and also securities fraud and falsifying business records. So a complete victory for the Manhattan district attorney here. Only one count that I find from my producer. Not guilty on count 17, falsifying business records. But otherwise, guilty on all the other falsifying business record counts and the most serious charges of grand larceny. Again, the charge of grand larceny itself carries a penalty in prison of as much as 25 years -- Kyra.
PHILLIPS: All right. I'm writing all this down, quickly, as you're giving me the count down here of the guilty verdicts. Allan Chernoff, as you continue to get updated information, I want to ask you to continue to do that. Stay with us.
Jeffrey Toobin on the line, our legal analyst. Jeffrey, you were able to catch everything Allan said, right?
JEFFREY TOOBIN, CNN LEGAL ANALYST: I was not, unfortunately.
PHILLIPS: All right. Well, here we -- in a nutshell, Kozlowski and Swartz, both found guilty. Grand larceny, conspiracy, securities fraud. We're talking up to 25 years in prison, right?
TOOBIN: A major, major victory for the Manhattan district attorney's office, after the extremely frustrating hung jury last year in this case. And you know, sort of a real post-script to the excesses of the Enron era. You know, the man with the $7,000 shower curtain is now a convicted felon.
PHILLIPS: Isn't this -- and I hope my memory serves me correctly. Isn't this the famous toga party, Jeffrey?
TOOBIN: That's right. The party in Sardinia that was largely paid for by the Tyco company, which was -- much about Kozlowski turned into symbols of the excesses of that period where companies subsidized sort of absurdly lavish lifestyles. And the party in Sardinia was one example. The $7,000 shower curtain was another. And now it looks like he's going to pay a heavy price.
PHILLIPS: Charged with stealing $170 million from Tyco by manipulating a loan program for company executives and pocketing another $430 million through stock sales. Now guilty verdicts coming forward for both the former CEO Dennis Kozlowski, also Mark Swartz, the former finance chief. What kind of message does that send out, Jeffrey?
TOOBIN: Well, I -- the message is that the boom years are over. I think, unfortunately, this verdict was so long in coming that people have to scratch their heads to remember who Dennis Kozlowski is. You know, the message is that white collar criminals can get convicted, too, although it often takes a very long time to do it.
PHILLIPS: Now what's the reality of these men serving 25 years in prison?
TOOBIN: You know, the reality is, they are in big, big trouble. Not only because they certainly serve many years in prison, they will serve their time in state prison, which is a lot rougher than federal prison. They're no country clubs in the New York state system. So Kozlowski an Swartz are looking at serious hard time, not just a passing of few months in a prison camp. This is hard time.
PHILLIPS: Jeffrey Toobin. Quite a switch from Martha Stewart's time that she served, that's for sure. Our senior legal analyst, Jeffrey Toobin, thank you so much.
Let's go back to Allan Chernoff, outside the courthouse, just to button this up once again. Guilty verdicts in the Tyco case. Bring us up to date real quickly, Allan, if you've got anything else in addition to grand larceny and conspiracy and securities fraud.
CHERNOFF: That's right, Kyra. And we have some detail from my producer Winnie Dunbar (ph) inside the courtroom. She's telling us that Mr. Kozlowski's face is scarlet red. His daughter's face is down in her hands. And Mark Swartz's wife looks as if she is in shock. And the wife of Dennis Kozlowski also is crying right now. So clearly, very emotional response to this guilty verdict against both Dennis Kozlowski, the former chief executive director of Tyco International, and Mark Swartz, the former chief financial officer.
They had been charged and now have been found guilty of stealing $171 million of cash from the company and then another $430 million through stock sales. And they had spent the money lavishly, particularly Mr. Kozlowski. Kyra you mentioned that party in Sardinia, on the island of Italy. It was a 40th birthday party for the wife of Dennis Kozlowski. And what Mr. Kozlowski did is he charged half of it, $1 million, to Tyco.
He also spent the money on lavish apartments. One 5th Avenue apartment he purchased for $18 million, then spent an additional $12 million furnishing that apartment. That the apartment with the $6,000 shower curtain and also the $15,000 poodle-ornamented umbrella stand. So he certainly did spend the money very lavishly.
During the first trial, the district attorney's office had pointed out very often, frequently, to the jury all about the spending. But during the second the second trial, there was not as much focus on that. It clearly was a much tighter prosecution. Nonetheless, the case still lasted for a good five months, including the jury deliberations. So it really is a big victory now for the district attorney of Manhattan. And I'm just checking my Blackberry here to look for more details.
My producer again writing that Mark Swartz looks as if he in shock, as if nothing happened, and the entire Kozlowski family now crying. Perhaps you had a sense from the defendants that they maybe were Teflon-coated after that first trial. Mark Swartz, in particular, was extremely curious. I've never seen a defendant simply so happy. Every time he walked in and out of the courtroom, he would be smiling. But clearly, we would not anticipate that when he steps out behind us in a matter of minutes.
Kyra, back to you.
PHILLIPS: Allan Chernoff, you mention the shock on the faces of the families of those two. I'm still in shock over the $6,000 shower curtain and the poodle umbrella holder. Allan Chernoff, outside the courtroom. Guilty verdict on the Tyco case. Allan, thank you. We'll continue to update all of you on this. More LIVE FROM right after a quick break.
(COMMERCIAL BREAK)
PHILLIPS: Decision day in Iran: millions of voters are flocking to the polls to pick a new president. It's a tightly contested race, pitting religious conservatives against moderate reformists. And among other things, the outcome could well decide the future direction of the country's strained relations with the West.
Joining me now with more on the election and what it means, our own Asieh Namdar. And on the telephone from Tehran, Iranian blogger Hossein Derakhshan.
Hossein, we'll get to you in just a minute, but Asieh, you're a journalist, but you also grew up in Iran. And you remember the days where it was Democratic.
ASIEH NAMDAR, CNN HEADLINE NEWS: Well, I wouldn't say, Kyra, it was totally democratic. You know, the shah was a monarch. And it was -- as modern as it was, there were definite issues there. But as far as my childhood goes when I was growing up, I have wonderful memories of my childhood.
You know, I was too young to know what was going on. I remember going on vacation and family gatherings and going to a Catholic school. Oh, gosh, there are the pictures.
PHILLIPS: That's OK. But it shows that this is not the Iran that we hear about now. And you actually went back there. You talked to people there in Iran and they actually said to you what?
NAMDAR: They are deeply dissatisfied. They are very frustrated and they are in desperate need of change. They want something to happen. I mean, from cab drivers to doctors to lawyers to housewives, everyone there wants change and is fed up with the system.
PHILLIPS: And Hossein, you're a blogger in Iran. First of all, that's a big risk for to be blogging in Iran, isn't it?
HOSSEIN DERAKHSHAN, IRANIAN BLOGGER (via telephone): It is, actually. But this is a small window of opportunity that I'm using, because the election time is usually -- the government during the election time is much more relaxed and quite easy going. Because they don't want to keep the turnout low by doing negative stuff.
PHILLIPS: So what are people saying on the blogs? You know, when they have a chance to talk without showing their faces or giving their names, what are they saying? The younger people, the older people?
DERAKHSHAN: You can -- you can basically see whatever you're hearing on the streets and in taxies and all that kind of (INAUDIBLE). Basically web logs are recording the political debate that is happening outside the virtual world.
And it's just recording it because, it's not like the Saddam Hussein era in Iraq or North Korea where nobody can question anything, nobody can talk about their leaders. You know, people are swearing them. And it's very, very common if you're talking to some Iranian and you hear that they are talking about how they're going to do these sort of changes, how they're tired. Nobody is scared of criticizing the regime when they're this parties, they're in taxies and stuff like that.
So, blogs are sort of resonating that type of stuff. But at the same time, the blogs -- because blogs are written by the majority of the Iranian society, you know 70 percent are under the 30 years of age now. And they're basically not very political. (INAUDIBLE) the past years of disillusion and the reformist movement. But now, since the mood has changed in the past few days, basically, and now we're going to see another surprise in terms of the election results. And I'm hearing some people saying that the reformist candidate is going up. And he will probably beat the former president, Mr. Rafsanjani.
And thanks to the blogging thing...
PHILLIPS: Hossein talks about the reformist candidate, Asieh, gaining ground here. But at the end of the day, does this election really mean something, because the Guardian Council, the hardliners still is in charge on who can run and who can't run?
NAMDAR: You're absolutely right, Kyra. The guardian council is basically a 12 member body, hard liners, very conservative. They decide which candidate can have a chance and which can not. 1,000 people registered to vote, 6 or 7 were elected. 93 women registered to vote, none were accepted. And that's the problem, at the end of the day does it really matter who is the president of Iran?
PHILLIPS: Shirin Ebadi, the Nobel Prize winner there in Iran says, look, we don't want another revolution, we don't want a hostage crisis. We want things to change, but the U.S. can't deal with the hard liners.
NAMDAR: And in fact, she actually has a very interesting approach. She says the EU and the United States, instead of focusing so much on Iran's nuclear program, should focus on the people behind the nuclear program, who make all the decisions. So tell the Iranian government we're not going to deal with you, especially the Europeans who have had commercial dealings with Iran. We're not going to make any business deals with you unless you make concrete steps to make concrete changes to free political dissidents, to open up the 90 newspapers that have been shut down and really to make substantial charges in the way people's lives are run on a daily basis.
PHILLIPS: You make a good point about the media, that's why Hossein Derakhshan has of course a very popular site going on with his blogging. Hossein, thank you so much. Asieh, I know you're going to continue to follow this for us. We're following the elections, what it means for the U.S. And, you know, change has to happen somewhere. Thank you very much.
All right. Well, it's time for a check on the financial markets. Chris Huntington live from the New York Stock Exchange -- Chris.
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