A Look Back at Martha Stewart’s Time in Prison and the Prosecutor Who Put Her There

It was 1999, and a very good year for Martha Stewart. On October 19th she took her company – Martha Stewart Living Omnimedia – public and Wall Street went wild. I still remember the huge white banner festooning that vast room, with her company name emblazoned on it. Media pundits who covered the festivities raved about the culinary treats that were soon to appear for guests of the event.

She was also riding high in the public’s esteem, and on top of the corporate world. She was a fierce competitor in essentially a man’s world, and if she did not inspire affection from her peers she at least elicited a grudging respect. Her stock opened at $18.00 a share and would later rise to $50.00. Forbes Magazine listed her as one of three new billionaires. In the world of politics she was a liberal in good standing, having donated about $24,000.00 to Hillary Clinton’s campaign. In addition she was extremely attractive. She had just about everything this world has to offer.

Now fast forward to July, 2002 when suddenly and unexpectedly her comfortable world imploded.   In those three years she had gone from a cultural icon of domesticity to a pariah. Instead of the darling of Wall Street she found herself facing a criminal indictment for insider trading. The various media tore into her, some with comments too obscene to mention. Comedians belittled her, pundits on Fox News excoriated her, and even friends like Barbara Walters wondered if she might go to jail. How could such a transformation happen? And why did so many liberal friends abandon her with relish? The ‘credit’ – if one might use that word – belongs to one James B. Comey. In those years he was merely a young, ambitious good-looking U.S. attorney for the Southern District of New York, with a full head of hair and a penchant for publicity. And he got plenty; night after night he appeared in public forums and on TV telling the world how he wanted to put Martha Stewart in jail. Today he is the Director of the FBI, and by strange coincidence, now Hillary Clinton’s nemesis. Like Martha earlier, he now holds Hillary Clinton’s fate in his hands, except with Martha Stewart they were rather reckless hands because he thought nothing of violating his oath of office which said, “Seek justice first.”   Martha Stewart’s fame and wealth, which he admitted later were the reasons why he first went after her, guaranteed him a rapid rise through the ranks and he secured it; first under George W. Bush and his Attorney General John Ashcroft, and then under President Obama as Director of the FBI. Prosecuting Hillary does not at this particular juncture bring with it the same promise of advancement; he has arrived – unless he resigns and decides to run for higher political office.

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shutterstock_160850432As prosecutor in the Martha Stewart case, Comey was more than creative about the charges, and one was so “novel” even Judge Miriam Cedarbaum, try as she might, could not make it stand. By the time prosecutors were through, they had nine counts against her. It’s called overcharging so that in the end a conviction may be gained at least on one or more charges. When Martha Stewart’s case came to trial, however, Comey bowed out as lead prosecutor in favor of Karen Patton Seymour. He feared it would look bad for him to be seen attacking a woman. What may be forgotten now, was that the era in which Martha was targeted was an era of corporate fraud with real malfeasance by top executives.   The Bush administration was hell-bent on showing the world that they were going to be tough on corporate crime, and there was no better figure for them on their fishing expeditions than to use Martha Stewart as bait. Or, put another way, with Martha Stewart on the hook they could wiggle her painful struggle before the public’s eye in order to gain publicity and support for putting other corporate crooks in jail. She literally became the poster girl for all corporate crime. But Martha’s ‘crime’ was in the long run nothing more than having the bad judgment – if indeed one can call it that – to be romantically linked to Sam Waksal, founder and head of the company known as ImClone. He was found guilty of insider trading after he sold shares of his own company, of which Martha had retained a few thousand shares. She sold them at 1:00 0’clock in the afternoon, long after the market had opened, along with untold numbers of other traders. It was her celebrity, and not the trade, that first attracted the attention of government agents, and even select members of Congress who had a field day with all the attention and publicity that came with targeting her.

The ensuing spectacle of prosecutors, the biased judge, the corrupt jurors, the pathetic, inept and even greedy lawyers would make a great movie, but whether it would be a tragedy or a comedy is still open to debate. Everything about the trial was unbelievable, and even though the charge of ‘insider trading’ was thrown out, the judge left intact “secret deals,” a phrase that permeated the trial, and which implied the same thing. Martha’s high paid lawyers, including the last one she turned to for help, Lanny Davis, fed off her like piglets at the trough. It was clear from the beginning that her lawyers thought the case too ridiculous to ever come to trial, and when it did, too ridiculous for any jury to convict. And thus, they put up no reasonable defense. To their dismay, and probably shock, every time lawyers (and there were two other defendants in the case) tried to counter a charge, the biased judge overruled every single one of them. It seemed as though the judge was working for the prosecutors.

Martha Stewart 2Her lawyers had – at the billable hourly price of about $900.00 and probably a pittance today – badly miscalculated the risks, and badly mismanaged her case, and her lead lawyer Robert Morvillo, a sad and beaten man, admitted as much at the end. The inescapable truth is that had she not been so famous and so rich and so naïve, she would never have gone to trial in the first place. Indictments, of course, are notoriously easy to procure, but a conviction on such flimsy charges? Never! And if you ask anyone today, they will probably say they convicted her for “lying.” About what, nobody really knows. But it happened because the public does not get involved with and rarely care about details; they preferred the salacious drama of seeing someone of Martha Stewart’s stature being brought low. They saw her sad plight not as a general threat from overzealous, out-of-control government prosecutors, but as good theatre. Corporate crime did not disappear with Martha in jail as a deterrent, and the courts are still as dangerous a place as they were under the Bush administration. It’s that the public does not hear about those injustices in the lives of ordinary folks. If Martha Stewart was at least on the politically correct side, she was still a cultural aberration because her focus on domestic pursuits was anathema to so-called liberated women’s groups. And as a footnote to history, Hillary Clinton made a huge show of returning the $24,000.00 donation she had earlier accepted.

As there are so few risks to the prosecutor for taking on the Martha Stewarts of the world, even if he (or she) loses the case, his (or her) name becomes a household word, and sometimes that’s all that’s needed to advance. The sordid circumstances surrounding what I call, crime shopping by federal agents, are soon forgotten. And that’s not a good thing for anyone.

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