Jury selection began behind closed doors yesterday in Martha Stewart’s criminal trial for–no, not insider trading. Federal prosecutors decided long ago, correctly in my opinion, that they could never make that charge stick. Instead, the domestic-living yenta is going on trial for saying in public that she was innocent of insider trading and for not fully cooperating with the investigation. Those are crimes?
According to the prosecution, Martha sold her shares of biotechnology company ImClone Systems Inc., on Dec. 27, 2001, the day before the Food and Drug Administration issued an adverse ruling on ImClone. Martha, say the prosecutors, had learned that ImClone president Samuel D. Waksal was trying to sell his own shares. (Waksal has since pleaded guilty to insider trading and is currently serving a seven-year prison sentence.) Waksal was a pal of Stewart’s–but she never talked to him that day. The prosecutors say that Martha got the illegal inside tip from an associate to her stockbroker, Peter Bacanovic. Martha says she had a standing order with Bacanovic (who’s on trial with Martha) to dump the shares when the price dropped below $60 a share. At any rate, Martha reportedly saved a mere $50,000 (chump change for a millionairess) in the sale.
Obviously, not a very strong case for insider trading. So the prosecutors are instead taking the tack that Martha failed to cooperate with the investigation, doctoring one of her phone records, for example. And then she publicly declared her innocence of any wrongdoing. The prosecutors say those statements amounted to a wrongful attempt to prop up the share price of her own company, Martha Stewart Living Omnimedia LLC. What?? Martha owned those ImClone shares as her own personal property, not that of her corporation. Since when is it illegal to try to defend yourself?
I say Martha should walk. I like her. Her well known temper is undoubtedly hard to take if you have to work with her, but she’s one of those gals you love to hate. She’s a hard-working lower middle-class girl from New Jersey who used her skill in cooking and the domestic arts to grow a highly successful corporate enterprise, which she continues to head. She’s brought beauty and good taste into the lives of millions of women who thought those things were luxuries that they couldn’t afford. I’m with this woman, one of the numerous Martha Stewart fans who, the NYT reports, have gathered outside the courthouse to cheer her on:
“Linda Smith, 52, a housing inspector in Camden, N.J.,…took a vacation day and made a two-hour bus trip to be at the courthouse today. She stood in the cold wearing a hand-printed sign reading, ’Martha Is Being Persecuted For Who She Is.’ (The ’You go, girl!’ [with which Smith had greeted Martha’s arrival] she said, just burst out.)
“Ms. Smith said she was there because she is a fan of Ms. Stewart and her how-to television show, which among other things taught her to garden. ’People on my block call me Martha,’ she said.
“’It sounds corny, but she brings beauty into my life,’ Ms. Smith added. ’I just don’t want her to go away.’”