[lbo-talk] Safire's defense of Martha Stewart

Michael Pollak mpollak at panix.com
Fri Jun 13 00:43:44 PDT 2003


[On grounds of abuse of prosecutorial prerogatives]

New York Times June 12, 2003

Fight It, Martha

By WILLIAM SAFIRE

W ASHINGTON

I hope Martha Stewart beats this bum rap.

Not for the reason some feminists are advancing that she is being

brought down because she is a strong woman succeeding in a man's

business world, while so many male corporate predators go scot-free.

The seven-year jail sentence given to her friend Samuel Waksal, former

chief executive of ImClone, belies that.

Nor do I join the millions clucking sympathetically at her Web site

who believe she was blameless in trying to call her friend Samuel. She

may well have been improperly seeking news of impending events that

might cause the value of her investment in his company to drop.

I hope she beats the rap because I don't like the idea of a prosecutor

eager to deter others from doing wrong twisting the law to make an

example out of a celebrity. In doing justice, righteous ends don't

justify unscrupulous means.

The U.S. attorney has not accused her of the crime of insider trading.

After a yearlong investigation, that central matter is nowhere in his

indictment.

Why not? Because he decided that would be too difficult a charge to

persuade a jury to believe. (In the Hillary Clinton Travelgate case,

the independent counsel Robert Ray concluded that her sworn testimony

was "factually false," but he declined to prosecute because he didn't

think a jury would convict the first lady of perjury. Prosecutors hate

to spoil their records.)

Rather than drop the weak case and his chance at national fame, the

prosecutor James Comey handed off the insider-trading charge to the

S.E.C., which seeks civil damages, not criminal penalties, and must

meet a much lower standard of proof.

Instead of focusing on what the case is about, Comey told a rapt press

conference: "This case is about lying" to investigators and to

investors.

"Lying" is a harsh word; I used it myself about Mrs. Clinton's

congenital falsification. But "perjury" is a much harsher word,

meaning "lying under oath." Martha Stewart has not been accused of

perjury.

Why not? Because when she voluntarily answered the questions of

investigators, she was not under oath and could never have perjured

herself. To make a case, the prosecution stooped to the use of Section

1001 of the criminal code, which makes it a crime to knowingly and

materially mislead federal investigators. Prosecutors use it to beef

up weak indictments, and judges often dismiss that count first.

The most troubling and radical charge of all came, almost as an

afterthought, at the end of a 41-page indictment. It twists a

protestation of innocence into "lying to investors."

Last summer, a week after Waksal had been arrested for fraud, Stewart

who had been subject to a series of gleeful leaks about her impending

doom dared to tell an investors' conference that her sale of stock was

perfectly legal and that she was cooperating with investigators. She

also proclaimed her innocence in some detail to The Wall Street

Journal.

That, charges the government, was a crime. Although common sense

suggests that mounting a public defense was the natural thing to do

for a person being anonymously smeared, the prosecutor reads a

sinister motive into her speaking out: she was not trying to salvage

her personal reputation, but was instead pumping up the price of the

stock of the company that bears her name.

Why such a stretch? The purpose of attributing a nefarious intent to

the accused executive's public self-defense is to create victims for a

jury. When investors saw her display a certain gutsiness in the face

of adversity, her stock rose $2; the prosecution calls that securities

fraud, suckering investors, and worthy of jail time.

Hold on; is Martha Stewart a person or a walking corporation? Even a

world-famous "domestic diva" has a right to speak out in personal

defense of her reputation. Even a wealthy woman who created a company

that employs thousands and generates taxable profits is entitled to

act like a jerk on occasion without risking a charge of being a

criminal conspirator.

The message this selective prosecution is sending executives is not

"don't lie"; rather, it is: Don't explain your side to investors or

the press lest it land you in court for manipulating your stock. Wrong

message. Fight it, Martha.

Copyright 2003 The New York Times Company | Home | Privacy Policy |

Search | Corrections | Help | Back to Top



More information about the lbo-talk mailing list