The recently deposed CEO of Computer Associates, Sanjay Kumar, was sentenced to 12 years in prison last Thursday.

He told the judge at his sentencing he knew what he did was wrong and was ready to accept the consequences for his actions.

Computer Associates, based on the Long Island Expressway next to the Radisson in Islandia, is the largest single employer on Long Island. It took over this dominant position as the fortunes of the Grumman Corporation waned and, finally, were bought up by Northrop and moved to California. Grumman made fighter planes. CA makes software.

Anyway, CA was founded by Charles Wang, who built his headquarters here on the East End about fifteen years ago to take advantage of the highly educated work force on the island. About 16,000 people work there.

Charles Wang handed the reins of the company over to his protégé, Sanjay Kumar, in 1998 and, personally worth many hundreds of millions of dollars, went on to greater things. He bought the New York Islanders. He bought much of downtown Oyster Bay and proceeded to finance much of the revival of its waterfront. More recently, he proposed a renovation and rebuilding of the entire campus where the Islander’s play their hockey at the Nassau Coliseum. His proposal would have resulted in the tallest building on Long Island, a 45-story structure, with a lighthouse beacon on the top. It was not approved, however, but it did spark competition to rebuild the area, a project which was won by an alliance of Charles Wang and Reckson Associates, but without the lighthouse.

In 2002, I wrote an article about Computer Associates and the trouble it was having with its accounting. I knew that the company was then in the hands of Sanjay Kumar, although Charles Wang, remained the Chairman of the Board of the Company. I had never met either man, but three weeks after I published it, I received a brief letter from Sanjay Kumar telling me he read and liked the article. As the troubles followed one upon the other after that, I never published the letter, or even showed it to anybody except close friends. I thought the letter might not have done Kumar any good in the courtroom, although on the other hand, it might have. I figured if anybody wanted me to say what was in it, they would ask me. But until then, I’d stay out of it. Now, with this sentencing, the die has been cast.

Here are excerpts of the article Kumar subsequently responded to, as it appeared in the issue of Dan’s Papers on May 22, 2002.

“Computer Associates has, apparently zigged a few times when it should have zagged. A minority stockholder tried to force Wang (and Kumar) out last year but failed. And new accounting techniques put in place have been described by many as not telling you much about whether CA is doing well or badly.

‘“Really, the only thing an investor can go on at Computer Associates is cash flow,’ one Wall Street type recently wrote. ‘You can see cash in and cash out. That’s something anyway. But everything else is just kind of fuzzy.’”

(At this point the article describes the charges of financial manipulation placed against executives at Xerox, Enron, American Health Care and other companies because of accounting irregularities are presented. — dr)

“Wading through all this — I just read the President of the National Accounting Society has resigned for profiting on insider information — I got to thinking that maybe Computer Associates is on to something.

“Maybe Computer Associates has found the accounting technique of the future. Just count how much money came in that day. Check the cash register. A few bucks here, a few bucks there. Then pay the bills, and if there is any money left over, divide it up among the stockholders. We’re with you Computer Associates.”

Kumar wrote me his letter on official CA stationery. He said he had read the article and enjoyed it very much. He said maybe I really WAS onto something. I held onto the letter for a while. But I don’t know where it is now.

I mentioned to my girlfriend yesterday that as a result of the letter I had received from Kumar, I felt a certain fondness for him, and hoped that the troubles overtaking Computer Associates would be over soon, and that it seemed kind of harsh what they sentenced Kumar to.

She replied — she possesses far more wisdom than I do — that my fondness for him was the result of feeling flattered. His letter indicated that he was a fan of the paper. I just liked that I was read in such high places. She reminded me, correctly, that I had never met the man.

At the trial, Sanjay Kumar defended himself by first describing his humble beginnings. He grew up in poverty in a rural area of Sri Lanka off the coast of India. His parents moved to America when he was 13. He learned English and went to college here and then medical school. But he found that his interest in computers and software was too strong and so he dropped out to take a job at a software company. Soon, Charles Wang discovered him and his apparent genius in that field, and hired him to work for Computer Associates and then made him his successor.

In 2001 and 2002, Kumar apparently ordered these “new accounting techniques” at Computer Associates to make it appear that the company was doing far better than it really was. Among the things he did was order the accounting department to book sales as revenue, so it would come in an earlier year, but delay the booking of expenses until they were actually paid, moving the expenses further along into the future. With more in and less out in those years, what appeared to be a windfall sent the stock at Computer Associates soaring presenting Kumar a bonus of tens of millions of dollars for his good works.

To make matters worse, when the federal regulatory agency that looks into these things began investigating the accounting practices at CA, Kumar ordered various documents shredded and then even wiped out records on his own personal computer’s hard drive to try to hide the evidence.

“Didn’t he ever hear of a sledge hammer?” I asked my girlfriend. “Didn’t he ever hear of Long Island Sound? Doesn’t a computer genius know if you erase a hard drive, the stuff on it can be restored?”

He liked my stories and read my articles. That’s enough for me. So I guess I don’t care what he did.

I’m with you Samjay.

And here’s a joke from 2002.

An important member of an accounting firm is applying for a job with a major American corporation. It will be a big step up for him. He is sitting across from the interviewer.

“Well, you certainly have had considerable experience,’’ the interviewer says, “and a good education. The Wharton School of Business. Harvard Law. You are very well qualified. But I wonder how good you are with some of the more mundane tasks.”

“Try me,’” the applicant says.

“How much are two and two?”

“What kind of question is that? Surely you can see I would know the answer to that question.’’