by John M. Curtis
(310) 204-8700

Copyright March 6, 2004
All Rights Reserved.

onvicted of conspiracy, obstruction of justice, and two counts of lying to investigators, 62-year-old lifestyle maven Martha Stewart remained unrepentant, promising, as she did the day she was charged, to clear her good name. “I am obviously distressed by the jury's verdict, but I continue to take comfort in knowing that I have done nothing wrong and that I have the enduring support of my family and friends,” said Stewart, showing the same arrogance that turned off jurors. From the get-go, Stewart and her fans trivialized the charges, stemming from the sale of 2,998 shares of ImClone stock on a tip from her stockbroker, Peter Bacanovic, who instructed his assistant, Douglas Faneuil, to tell her that ImClone Chairman Sam Waksal was dumping stock after getting bad news from the Food and Drug Administration. Wasksal now sits in Club Fed, doing seven-years for insider trading.

      Whatever the merits of the case, Stewart sabotaged herself with the same blinding perfectionism, driving her to become one of America's best known entrepreneurs. What remains so inexplicable is how a person of such wealth and fame—estimated at roughly $800 million at the time she dumped her ImClone stock—would trash her career over a measly $50,000. That, by the way, was the same feeble defense used by her savvy attorney Robert G. Morvillo, telling jurors, no one could be so stupid to get their stories mixed up, as Stewart did with her stockbroker, Peter Bacanovic. Morvillo told jurors that the government's case must be wrong because Stewart and Bacanovic couldn't be so dumb. In the end, prosecutors reminded jurors that rich, powerful and famous people do stupid things. With Stewart caught in the cookie jar, Morvillo should have urged his client to plea-bargain and face the music.

      With ImClone founder Waksal already doing time, Stewart's innocence always looked suspect. Morvillo should have corralled Stewart's bravado—including his own—and copped to a lesser charge. Yet, despite the simplicity of the government's case, Morvillo opted to roll the dice in open court, calling only one witness. He kept Stewart off the stand, precisely because she was a liability. Had Stewart really been innocent, she would have insisted on testifying. Morvillo's final arguments—no matter how skillful and persuasive—didn't undo the government's case, especially damaging testimony by Bacanovic's assistant Douglas Faneuil, Stewart's personal assistant Ann E. Armstrong and her traveling buddy, Mariana Pasternak. “Isn't it nice to have brokers who tell you those things,” testified Pasternak, quoting Stewart admitting she was tipped off, etching her guilt in jurors' minds.

      Morvillo's trial strategy was based on bravado and past track record. But in the end, Morvillo was no Johnny Cochran, having flakey witnesses and captive jurors to brainwash. Jurors weren't too impressed with Morvillo's argument that smart people, like Martha Stewart and her stockbroker, don't do stupid things. “Maybe it's a victory for the little guys who lose money in the market because of these kind of transactions,” said juror Chapell Hartridge from the Bronx. Morvillo hopes to use jurors' public remarks to establish a basis for appeal. He already accused jurors of harboring prejudice because of today's corporate scandals and Stewart's failure to testify. Morvillo said he was “confident that once we get our day in the court of appeals these convictions will be reversed,” showing the kind of sour grapes, but, more importantly, damage control masking defeat. Talking tough, Morvillo hopes to avoid legal malpractice after bungling Stewart's case.

      Most legal experts expect appeals to fail and Stewart to face sentencing with her stockbroker on June 17. Stewart's case mesmerized the media, not, as some would have you believe, because of her fame, but because her conduct remains so inexplicable. Watching a national icon fall from grace raises inescapable questions about success and failure, and a culture that sets the stage for dramatic pratfalls. “The woman who taught you to be perfect failed to be perfect herself,” said Lou Mazzucchelli, a venture partner at Ridgewood Capital, suggesting that Stewart becomes the latest martyr in the new blood-lush against America's corporate criminals. Stewart's problems say less about today's culture than one woman's greed, blinding narcissism and self-destructive behavior. No one forced her to dump her ImClone shares and then create a cock-n-bull story with her stockbroker.

      Stewart's demise should remind those in the fast lane to slow down, get a grip and rely on common sense—not criminal defense attorneys. Morvillo should have told his celebrity client to get off her high horse and admit she made a mistake. Instead of going to trial, he should have plea-bargained and accepted a deal. Instead of protesting her innocence on her Web site, she should have taken the stand and made her best case. Proclaiming her innocence now and talking about appeals doesn't show the kind of contrition likely to help when she faces sentencing on June 17. While federal sentencing guidelines are rather specific, judges still have some discretion. “Appearance is reality here,” said conservative columnist David Horowitz, head of The Center of the Study of Popular Culture, convinced that Stewart's empire is caput. Before it's too late, a little contrition goes a long way.

About the Author

John M. Curtis writes politically neutral commentary analyzing spin in national and global news. He's editor of OnlineColumnist.com and author of Dodging The Bullet and Operation Charisma.

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