(3 of 4)
The first bonus, taken in 1999 in the form of a loan forgiveness totaling $37.5 million for the executives, was in many ways the clearest. During a mind-numbing nine days on the stand, Swartz said the payment was necessary to correct for accounting changes brought about by two acquisitions. He even sketched out an elaborate calculation that he claimed explained the size of the payments. It didn't hold water. Their bonus formula had in fact been properly adjusted for the accounting changes. The calculation he performed on the stand? Complete nonsense, wrong on so many levels as to be laughable--if it hadn't proved so convincing initially to much of the jury.
As for the three other bonuses, Swartz stated repeatedly that they were early payouts from the annual-bonus formula and thus legitimate. When the payouts were made, however, the defendants sought a special accounting treatment for the bonuses as "direct and incremental." The justifications for such a classification included declaring that they were specifically not early payouts of the annual-bonus plan. In other words, they were just another helping of remuneration. Swartz signed memos at the time stating exactly that. On the stand, his explanation was the exact opposite, and when confronted about the contradiction he performed a dizzying tap dance. The fourth bonus, however, had been approved after the fact by the compensation committee, which did raise reasonable doubt.
After about a week, all the jurors but one (yes, No. 4) seemed ready to convict on the bogus-bonus charges. That was when the jury broke down and one juror, speaking for most of us, sent a letter to the judge about the "poisonous" atmosphere in the room. Charges of closed-mindedness and even corruption were being hurled about the room like spitballs. Eleven of us had become convinced that the 12th juror would never agree to a guilty verdict on any count, no matter how compelling the evidence. We saw no reason to continue under such circumstances and no plausible benefit in doing so. For two days, we practically begged the judge to declare a mistrial due to a hung jury. Miraculously, on the following Monday we seemed to have a breakthrough. Jordan said she had had a change of heart and believed that her view of reasonable doubt was perhaps extreme. There was skepticism about her sudden turnabout. We were worried that she was giving in to the group without actually being convinced by the evidence. We didn't want that kind of decision. But when she was able to state legitimate reasons for her change of views, we plowed ahead. We still had nearly half the charges to consider. By Wednesday morning, we had finished hearing a rereading of Swartz's testimony, and it was clear to all of us that he had not been honest on the stand. Even Jordan conceded that. She then said something that still stuns me: that she was "disappointed in the defendants." She had, it seems, made a great emotional investment in her belief that the defendants were not guilty, and now she realized they had lied to her. They had let her down.