1. Honey, I Told You the In-Room Mini-Bar Was a Ripoff

We're feeling all warm and fuzzy inside here at the lab. And not just from the keg left over from the holiday party.

No, it's also because of Tyco International ( TYC). See, we read the report that outside counsel David Boies issued Monday. And bless his heart, following his research, Tyco "is not aware of any systemic or significant fraud related to the company's financial statements or of any clear accounting errors that would materially adversely affect the company's reported earnings or cash flow from operations for the year 2003 and thereafter."

Now, doesn't that restore your faith in human nature?

Of course, all those declarations of an absence of systemic, significant and material adversity doesn't mean that Boies found nothing swept under the antique rugs at the Bermuda/New Hampshire/New York-based industrial conglomerate. Because, of course, Boies did.

Yes, if your worst nightmare about accountants is that they report the truth as accurately as a 3-year-old describes human reproduction, your fears are confirmed. There are the documents devoted to "Financial Engineering." There's the presentation devoted to "aggressive" accounting, in the margins of which somebody scribbled "Be Careful!! -- I wouldn't want this to get out" and "I would strongly recommend Never to put this in writing!!"

But the most delicious part of the report was the allegation that former CEO Dennis Kozlowski had the company rent hotel accommodations for him in London at a cost of about $110,000.

Livin' It Up in London
Kozlowski's 'suite' deal

Wow. $110,000 for 13 days. Let's give Mr. K. the benefit of the doubt on that one and assume Boies meant a 13-night stay, as opposed to a 13-day, 12-night sojourn on the Thames. That's $8,461 a night.

Wow again. $8,461 a night. We couldn't spend that kind of money on a hotel if we tried. Which is why, we suppose, Dennis Kozlowski made it to the top of a hotshot conglomerate and we're toiling away in the lab.

But let's try anyway. The most expensive hotel room in London, according to people who have gone looking for it, is the Royal Suite at the Lanesborough Hotel. The three-bedroom suite, favored by other famous, level-headed world travelers, such as Michael Jackson, runs about 4,500 British pounds per night. Slap on the value added tax of 17.5% and you end up at 5,288 pounds a night.

What do you get for that kind of money? Pretty much anything you might want, according to a reporter at The Observer in London. One chauffered Bentley. Two butlers. Personalized stationery. And exercise equipment delivered to your room. In other words, just the stuff that a hard-driving executive needs to clear his head.

Now, we don't know when this alleged hotel bill was incurred -- Boies doesn't say, and a Tyco spokesman didn't have details at the ready -- but at current exchange rates, 5,288 pounds translates into $8,429 a night. Subtract 13 nights of that from Tyco's $110,000 bill, and you get $418 left over -- enough to get Mr. K. started on the tips for the driver et al.

Of course, maybe Kozlowski economized by staying elsewhere -- say, one of the 3,500-pound-per-night fleabag penthouses at Claridge's. In that case, we calculate it would cost Tyco's shareholders a mere $6,556 a night. Of course, then Kozlowski would have had $24,770 left over for the various and sundry items on his hotel bill.

Now, that's a lot of in-room movies.

2. Your Fabulous Caribbean Spews

Another day, another dollar. Another week, another reported case of nausea, vomiting and diarrhea aboard a luxury cruise ship.

Yes, last Friday Reuters reported that 80 passengers and crew members on Royal Caribbean Cruises' ( RCL - Get Report) Majesty of the Seas took ill with a bug resembling -- but not officially confirmed as -- the Norwalk-type flu virus that has sparked more than the usual level of seasickness over the past few months.

So while we at the Five Dumbest Things Research Lab are tempted to vacation on a sunny boat somewhere off the coast of Florida, we thought it best to conduct a literature review first. Sure, anecdotal accounts indicate people have been getting sick on ships operated by Royal Caribbean, P&O Princess Cruises , Carnival ( CCL) and Disney ( DIS). But how many people? A little bit -- but not too much -- of intellectual rigor is in order.

To be sure, recent stem-to-stern boat cleansings seem to have turned the tide on the outbreaks, according to the Centers for Disease Control and Prevention. "Diarrhea outbreaks on cruise ships have been declining for years," was the Fort Lauderdale Sun-Sentinel's sunny summary of a recent CDC study.

But we at the lab note that cruise companies may have underestimated the business-related risks it faces from the Norwalk virus and its cousins. Carnival, for example, acknowledges in its latest 10-K that it can be hurt by adverse economic conditions, armed conflicts, political instability, accidents and "other incidents involving cruise ships." For passengers who spent their Caribbean vacation clutching a toilet, that "other incidents" phrase doesn't exactly capture, perhaps, the Fascination and Magic of their seaborne journey.
Sea Sick
Number of people reported sick aboard Caribbean cruises in late 2002
Source: Press reports

3. Please Liberate Me, Let Me Go

Speaking of company documents that miss the real story, we had a fun time reading the press release Liberate Technologies issued last Friday night at 6:35 -- a day and time that Liberate selected, no doubt, to ensure maximum readership.

The big news -- summarized in the attention-grabbing headline "Liberate Updates Form 10-K/A and Form 10-Q Filing Status" -- apparently was that the interactive TV software company is still working on the audit it announced two months earlier. As Liberate said in mid-October, it won't file its financials for the fiscal year ended May 31 and the fiscal first quarter ended Aug. 30 until it completes an audit into its finances. That audit came, by the way, after the "appropriateness and timing of revenue recognition" of $1.84 million in license fees had been called into question. Though the company said a month ago that it expected to make the filings by December's end, Liberate is now backing away from setting any deadline.

In other gripping news, according to Liberate, it has withdrawn all prior guidance, which it pretty much did a month ago. Chairman and CEO Mitchell Kertzman, who had planned to switch to the post of executive chairman by New Year's, will hang on in his current post until the 10-K/A and 10-Q are in.

And, oh yeah, at the bottom there was one more bit of news: As a result of Liberate's audit -- which at last count had uncovered not $1.84 million, but $10 million of questionably appropriate and/or timed revenue -- the company is canning Donald Fitzpatrick, the company executive appointed chief operating officer in June.

Oh, yeah. Firing the No. 2 guy at the company, on account of some financial-related issues. Yup, yup, yup. No big deal. Move along, folks. Nothing to see here. Just go about your business.

4. Sweet Jain

Speaking of ousted CEOs, we at the lab call your attention to former InfoSpace ( INSP - Get Report) chief Naveen Jain, who was "terminated" by his board so quietly Dec. 21 that we didn't notice he was gone until after Christmas.

And that's a shame. See, we have a soft spot in our hearts for Jain, and not just because he always returned our calls when we phoned to ask him Dumb questions.

Naveen Jain
Remembering InfoSpace's ex-CEO

No, the reason we love Jain is that when Internet stocks were at their giddiest, no one was giddier than he. Jain was the guy who told TheStreet.com -- and anyone else who would listen -- that his startup would be worth a trillion dollars someday. Not bad for a company whose shape-shifting business has been a mystery to most people, including us; we're pretty sure, though, it has something to do with syndicated and/or wireless information distribution or transactions.

Yeah, yeah, yeah. In hindsight, what were we thinking? But back in the days, Jain's goofy immodesty was endearing. In murmured tones at investment conferences, portfolio managers made fun of the excitable nerd who justified his naked egotism with the excuse that he came from Microsoft ( MSFT). But when Jain took to the podium, professional investors listened. And as his stock climbed, they piled in.

Which brings us to a final reason we're fond of Jain. (Though before we get to it, we should point out that press reports indicate it's tough to be fond of the guy if you have to actually work with or for him.) That's how Jain dealt with the inevitable fallout of his becoming fabulously wealthy from stock sales, though the shares are now in the toilet. (He cashed out nearly $400 million worth of stock, according to the Seattle Post-Intelligencer; shares which once traded at a reverse-split-adjusted $1,300 apiece are now worth $9.)

So how does Jain deal with the outrage that he got rich from inflated stock, but shareholders got the shaft? "Nobody believed InfoSpace's stock was overpriced," Fortune quoted him as saying in September. "If I did, I would have been selling a lot more."

If you can think of a comeback to that one, let us know. We'll be at the Lanesborough, awaiting your call.

5. So Much for the Chinese Wall

You know, Hughes Electronics got so much grief from Beltway types over its attempt to merge with EchoStar ( DISH - Get Report), you would have expected they'd earned a brief vacation from goverment antagonism.

You'd be wrong.

Late last month, the State Department issued a document charging a former Hughes subsidiary with illegally giving U.S. space technology to China, The Washington Post reported New Year's Day.

If the charges stick, Hughes and Boeing ( BA), which bought the allegedly infringing subsidiary, could be on the hook for $60 million, says the Post.

A Hughes spokesman told the Post the company believes it did nothing wrong. Which got us thinking how twisted things will get if and when Rupert Murdoch's News Corp. ( NWS) succeeds in acquiring Hughes. The U.S. government, apparently, is mad at Hughes for not admitting guilt. The Australian Murdoch, meanwhile, is so fond of America -- or at least broadcast TV stations in the U.S. -- that he became a U.S. citizen. Of course he's also a fan of China, too, having proven in the past that U.S.-style press freedom is not as important to him as breaking into the Chinese media market. Who knows how Rupert would want to balance China's desire for scientific advancement with the State Department's killjoy attitude?

Bottom line is, we'll be watching Fox News Channel for the latest update. We want to see how O'Reilly factors into this one.