NEW YORK — James Zimmerman, former chairman and chief executive officer of Federated Department Stores, was indicted for perjury Tuesday.
The charge alleged Zimmerman lied under oath to conceal evidence of possible antitrust violations. The indictment was unsealed by New York Attorney General Eliot Spitzer’s office. Zimmerman, who was arraigned before New York State Supreme Court Justice James Yates in Manhattan, pleaded not guilty. Justice Yates set bail at $50,000. If convicted, Zimmerman faces a maximum sentence of two-and-a-third to seven years in state prison.
Zimmerman’s testimony was part of an investigation conducted by Spitzer’s office that began in 2003. Spitzer was probing whether Federated and May Department Stores, along with two tableware manufacturers — Lenox Inc. and Waterford Wedgwood U.S.A. — had conspired to limit distribution of products sold to customers. The companies involved, which were accused of engineering a scheme to keep Bed Bath & Beyond from expanding into their lucrative tabletop market, settled the case last August, paying $2.9 million in civil penalties. Federated paid $900,000 and May paid $800,000. Neither of the firms admitted to any wrongdoing.
“Jim Zimmerman has been indicted for failing to recall a portion of a single, brief telephone conversation that occurred almost three years before his testimony. It is most unfortunate that the New York Attorney General’s office has chosen to bring these charges against such a respected and honest corporate leader whose integrity has been beyond reproach,” said Thomas Fitzpatrick, Zimmerman’s attorney, in a statement.
Fitzpatrick said it will become “perfectly clear that he told the truth and that he did not intentionally mislead the examiner.” Fitzpatrick said in a telephone interview that he will be making a motion to dismiss the indictment on Feb. 17.
Zimmerman retired as chairman and ceo of Federated on Jan. 15 last year and was succeeded by Terry Lundgren. His testimony that gave rise to the perjury charge occurred in April. A source familiar with the Spitzer probe said the timing of the testimony was why the perjury charge was directed solely against Zimmerman.
Federated said in a statement, “The management and employees of Federated Department Stores Inc. have enormous respect for Jim Zimmerman as a longtime friend and colleague. Over the years, he has made substantial contributions to our company and has always acted with the highest standards of ethics and integrity. We value Jim’s professionalism and his many contributions to our company and our community, and we offer him our unqualified support during this difficult time.”The retailer said Zimmerman “voluntarily provided testimony in the investigation.”
“It’s devastating to Jim,” said Carol Sanger, vice president of corporate communications and external affairs at Federated, who has spoken to Zimmerman since the indictment. “It gets to the very heart of who he is as a human being. He’s an absolute straight arrow.”
Since retiring from Federated, Zimmerman has kept busy with directorship responsibilities at Chubb Corp., H.J. Heinz, Goodyear Tire & Rubber Co. and Convergys Corp., where he serves on the compensation and benefits committee, according to Securities and Exchange Commission filings.
Sources said there were no other pending legal matters in connection with the Spitzer probe, suggesting Zimmerman is the only person to be indicted in the matter.
Industry reaction to the indictment was one of shock.
Marvin Traub, former ceo of Bloomingdale’s, who was traveling in Dubai, United Arab Emirates, said, “I’ve known Jim for over 35 years. He has a high sense of personal integrity in business dealings. He is straightforward, direct and totally honest. I am upset at the news, and supportive of Jim, whom I believe is of great moral character. This is not a guy who would twist things.”
Gilbert Harrison, chairman of investment banking firm Financo, said, “I was stunned to read on the tape of this happening because May and Federated had paid fines in 2004, and for [Spitzer] to go after [a former] ceo is somewhat staggering.”
— With contributions from David Moin and Meredith Derby