THE LAST CONGLOMERATEUR.(former Tyco International CEO L. Dennis Koslowski; conglomerate corporations)(Brief Article)

In William Gaddis's 1975 novel "J R," a sixth grader from Long Island named J R Vansant quickly parlays one share of stock in a cable company and a deal to sell Navy-surplus wooden picnic forks into a vast empire he calls "the J R Family of Companies." J R owns, among other things, a textile mill, a matchbook producer, and a chain of nursing homes and funeral parlors, and is acclaimed by the press as "a man who sees where the parade is heading long before the paraders themselves do."

J R was modelled on the conglomerate kings of the nineteen-sixties, men like Jimmy Ling, of L.T.V., and Harold Geneen, of I.T.T. But he might well have served as the inspiration for L. Dennis Kozlowski, the recently deposed C.E.O. of Tyco International. During the nineteen-nineties, Kozlowski made Tyco an acquisition machine, spending tens of billions of dollars to buy hundreds of companies, in such lines as commercial lending, undersea cable, industrial valves, and disposable diapers. Working out of a small headquarters in New Hampshire, Kozlowski earned a reputation as a remorseless cost-cutter with an uncanny ability to discern value in overlooked companies. Analysts spoke glowingly of Tyco as a new-model G.E., and in April of last year Business Week named it the best-performing company in America.

Not this year, though. Under the weight of rumors about dubious accounting and financial chicanery, Tyco's stock has collapsed, shrinking the company's market cap by more than eighty billion dollars in six months. Each week brings accusations of misdeeds in the executive suite. (The other day, the company sued its own former chief corporate counsel, charging a "broad pattern of misconduct for personal gain.") This month, Kozlowski resigned and, a day later, was indicted on charges of evading more than a million dollars in sales tax on purchases of art. Instead of joining Jack Welch and Alfred P. Sloan in the pantheon of great C.E.O.s, Kozlowski has joined Kenneth Lay, Sam Waksal, and, apparently, all of Arthur Andersen in the ever-expanding gallery of corporate rogues.

Though Kozlowski may be a chiseller, that doesn't necessarily make Tyco a fraud. Nonetheless, he molded Tyco in his own image: it played fast and loose--incorporating itself in Bermuda, failing to disclose acquisitions, larding its financial statements with confusing footnotes--and placed more emphasis on clever asset-shuffling than on solid business practices. And the much heralded success of its business model was a bull-market fiction. Kozlowski claimed that he was building the next great American corporation, but, in resurrecting the discredited idea of the conglomerate, he ended up running a great American con game instead.

In everyday speech, people use "conglomerate" to mean any giant company. In fact, a conglomerate is a company made up of many different businesses that have very little to do with one ...