March 16, 2004

Court Indicts Belnick '68 For Grand Larceny, Fraud

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When Mark Belnick ’68 resigned after less than a week as Cornell’s university counsel in 1993 citing “unforeseen personal circumstances,” he said that he would “continue to be active in Cornell affairs as long as I have feet to walk on that campus.”

While Belnick is not in danger of losing his feet, prosecutors seek to make a jail cell his only walking grounds.

Belnick has been indicted in the New York State Supreme Court for alleged actions during his tenure, from 1998 to 2002, as general counsel for Tyco International Ltd.

The charges against Belnick include counts of falsifying business records, as well as securities fraud. The most serious charge is one count of first-degree grand larceny, a felony punishable by up to 25 years in jail.

Jury selection in the trial is scheduled for March 29.

The prosecution has accused Belnick of accepting $12 million in bonuses not approved by Tyco’s board as well as $14 million in interest-free loans for an apartment in New York City and a second home in Park City, Utah. These loans were in violation of the intent of the company’s relocation program.

Belnick has taught Cornell’s Pre-Law program in New York City during the summer since its inception in 1999. The School for Continuing Education and Summer Sessions was notified that he was not available to teach this year, said Glenn Altschuler, the school’s dean.

The school intends to offer the program again in 2005, and will begin planning for the program this fall, Altschuler said, adding that “at that time we’ll look at who is available to teach.”

The Manhattan office of the New York State Attorney General, once an internship host for the program, is prosecuting Belnick and has taken former chief officers at Tyco, Dennis Kozlowski and Mark Swartz to court for allegedly taking over $600 million in unapproved loans and stock options from the company.

Reid Weingarten ’71, an attorney from the firm of Steptoe & Johnson LLP, is representing Belnick.

Weingarten is a member of Steptoe’s white-collar crime defense group, and his clients include Bernard Ebbers, former CEO of Worldcom, and former Enron Chief Accounting Officer Rick Causey.

Shortly after the indictments were announced, Weingarten told the New York Times that Belnick “has done nothing wrong” and that “when this painful process ends, he will be cleared of the unsupportable allegations that have been made against him.”

In addition to his time directing the Pre-Law program, Belnick is well-known on campus for his service to the University.

Inge T. Reichenbach, vice president for alumni affairs and development, characterized Belnick as a “very involved and generous alumnus” who “has supported many projects at Cornell.”

Among Belnick’s gifts to the University was a donation to the three-year-old fundraising campaign for the renovation of White Hall, Reichenbach said.

He also established the Belnick Fund for Government Studies Lecture Series in 1998 in honor of his parents.

The first Ben and Rhoda Belnick lecture was delivered in 2001 by Sen. Warren Rudman, a former partner of Mark Belnick’s at Paul, Weiss, Rifkind, Wharton & Garrison LLP.

“I and everyone who ever worked with Mark think he’s a person of absolute integrity and impeccable judgment, and I’d be shocked if these criminal charges are true,” Rudman told the Wall Street Journal.

Catholic organizations have also been a recipient of Belnick’s generousity in recent years. A June 2003 Wall Street Journal article detailed Belnick’s conversion from Judaism to Catholicism in 2000, and his subsequent support of the conservative Catholic group Opus Dei. Belnick currently sits on the Board of Directors of Thomas Aquinas College, in California.

As an undergraduate at Cornell, Belnick was a government major and helped organize the first national student conference on Vietnam. He also wrote a column for The Sun.

Stan Chess ’69, president of The Sun’s alumni association, was Belnick’s housemate for a summer in Washington, D.C., and remembers him as one of the “brightest of the bright” people he met at Cornell.

After law school at Columbia University, Belnick went to work for Paul, Weiss. Belnick quickly rose through the firm’s ranks and attained national prominence while investigating the Iran-Contra affair in the late 1980s.

Belnick, referred to as “one of America’s top lawyers” on the Pre-law program’s website, bolstered that reputation through various high-profile corporate cases. He was involved in Pennzoil’s successful $11 billion verdict against Texaco in 1987, helped Rudman overhaul the Nasdaq stock market in 1995 and was a key part of Smith Barney’s settling of a class-action lawsuit alleging sexual discrimination in 1998.

Belnick resigned his position as Cornell’s university counsel in 1993 to return to corporate law. Martin London, a Paul, Weiss partner, told the Wall Street Journal that “when [Belnick] got there, he realized it was Ithaca, not Manhattan, and that he was required to go to meetings every moment.”

Belnick’s departure from Tyco on June 10, 2002 was even more abrupt, as Belnick was fired by acting CEO John Fort and given a few minutes to clear out his desk. Tyco sued Belnick a week later, alleging improper use of the company’s relocation loans. Belnick’s lawyer at the time, Stanley Arkin, stated that his client “conducted himself during his tenure as Tyco’s general counsel in an exceptional and worthy manner, and entirely in accordance with his professional and fiduciary obligations.”


Archived article by Dan Galindo

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