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CA director takes step back


April 12, 2005

Computer Associates director Laura Unger last week withdrew from the board's newly formed special litigation committee after attorneys for dissident shareholder Sam Wyly criticized her ties to fellow CA director Alfonse D'Amato.

At the same time, CA's board is expected this week to name Ron Zambonini, chairman of software maker Cognos Inc., its 12th director, a source said. Zambonini is expected to take Unger's place on the litigation committee, according to the source. CA declined to comment.

The special litigation committee was established earlier this year to contend with lawsuits from Wyly and others seeking compensation from past and current CA directors and executives after the company's $2.2 billion accounting scandal. In a court filing earlier this month, Wyly's lawyers branded the committee "a shield behind which the ... board is hiding."

Unger, a former acting chairwoman of the Securities and Exchange Commission, in the 1990s served as securities counsel to former U.S. Sen. D'Amato on the Banking, Housing and Urban Development Committee. She acknowledged in an interview that D'Amato had been "instrumental" in recruiting her to join the board. But she disputed that this link had compromised her independence. "I clearly met the independence-in-fact test," she said.

Still, Unger, who remains on the board of directors, added, "It's more difficult to determine independence in appearance." She said she did not want the litigation committee to finish its work, only to have it questioned by a judge because of the appearance of a conflict.

"It's no shock or secret our clients felt this was an inappropriate appointment," Wyly lawyer William Brewer said.

Unger's withdrawal follows an April 1 motion filed by Wyly's attorneys that made a point of questioning her independence.

Charging CA's new committee "lacks independence," it pointed to Unger's ties to D'Amato, and said D'Amato "himself was a member of CA's audit committee during the period of the accounting fraud, and therefore a director of substantial exposure. Unger knows that D'Amato is apt to be one of the most vulnerable outside directors, along with other audit committee members."

The April 1 filing by Wyly's lawyers noted that Unger, during her time with D'Amato in the Senate, also worked with Robert Giuffra, the lawyer for the board's law firm, Sullivan & Cromwell, who led the probe of accounting misdeeds for its audit committee.

One CA observer applauded her decision.

"Ms. Unger's decision shows investors that they can rely on her integrity and sound judgment," said investment banker Gary Lutin, who oversees a CA shareholder forum. "She's also established a real standard for all the other directors who must decide whether they can effectively continue as board members."

Lutin last week called for directors who sat on the board before April 2004 to consider stepping down as new management seeks to put the company's misdeeds in the past.

Copyright 2005 Newsday Inc.


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