- Domestic icon Martha Stewart moved one step closer to a drastically different lifestyle behind bars when the millionaire entrepreneur was sentenced Friday to five months in prison for a stock-trading scandal.
“I’ll be back,” she promised afterward, speaking in a strong voice on the courthouse steps. “I’m not afraid. Not afraid whatsoever. I’m very sorry it had to come to this.”
She also was ordered to serve five months of home confinement for lying to federal investigators. Stewart, who was also fined $30,000, was spared an immediate trip to federal prison when U.S. District Court Judge Miriam Goldman Cedarbaum stayed her sentence pending appeal.
In the courtroom, her voice was shaky as she appealed for a reduced sentence, asking the judge to “remember all the good I have done.” [AP]
The NY Times has more:
- Ms. Stewart was not convicted on any charges of insider trading, only for lying about the trade to investigators.
“What was a close personal matter became an almost fatal circus of unprecedented proportions,” she said, adding that 200 people at her company had lost their jobs as a result of the publicity surrounding her legal troubles.
And in the plucky style for which the self-made millionaire is known, Ms. Stewart urged people to buy her magazine, and advertisers to keep purchasing ads. Meanwhile, she said, she will face whatever comes.
….The guidelines recommended a sentence of 10 to 16 months in prison for someone convicted of such crimes who has no previous record of criminal activity and is not considered a threat to society. Judges can add to or reduce a sentence for various reasons, including perceptions of the defendant’s acceptance of responsibility.
Ms. Stewart arrived at federal court this morning appearing grimfaced and accompanied by her daughter, Alexis, her son-in-law, John Cuti, who is also an attorney, a bodyguard and other lawyers. A horde of reporters, news cameras and onlookers had been awaiting her arrival, and some of those in the crowd cheered as Ms. Stewart, dressed in a dark pantsuit, stepped from a sport utility vehicle and walked up the courthouse steps without saying anything to the crowd.
Gene Healy of the Cato Institute thinks the lesson of the case is about “the ever-expanding power of federal prosecutors”:
- James Comey, the federal prosecutor behind the Stewart case, says he went after Stewart “not because of who she is but because of what she did.” But that’s hard to believe given the audacious legal theory Comey used to pursue her.
Comey didn’t charge Stewart with insider trading. Instead, he claimed that Stewart’s public protestations of innocence were designed to prop up the stock price of her own company, Martha Stewart Living Omnimedia, and thus constituted securities fraud. Stewart was also charged with making false statements to federal officials investigating the insider trading charge — a charge they never pursued. In essence, Stewart was prosecuted for “having misled people by denying having committed a crime with which she was not charged,” as Cato Institute Senior Fellow Alan Reynolds put it.
Nor was this the first time Comey contemplated taking down a high-profile defendant with a novel legal theory. In mid-2003, Comey considered prosecuting fabulist Jayson Blair for the hitherto unknown crime of making stuff up in the New York Times. Blair, the Times reporter who faked stories and quotes, became the subject of scandal in early 2003 when the Times unearthed his deception. In May of that year Comey’s office sought information from the Times as a prelude to prosecution, possibly for mail fraud.
But Comey — who has since been promoted to the number two slot in the Justice Department — is hardly alone in his willingness to make a federal case out of almost anything. The problem is systemic, driven by legislators who are all too willing to turn every social problem into a matter for the criminal law.
In a famous speech in 1940, Attorney General Robert Jackson (later Justice Jackson) warned federal prosecutors: “With the law books filled with a great assortment of crimes, a prosecutor stands a fair chance of finding at least a technical violation of some act on the part of almost anyone.” The great danger, said Jackson, is that “he will pick people that he thinks he should get, rather than pick cases that need to be prosecuted.”
Since Jackson gave that speech, that “great assortment of crimes” has expanded radically. Today, there are over 4,000 federal crimes spread throughout tens of thousands of pages of the U.S. Code, an increase of one-third since 1980. And the law sweeps far more broadly than it did in Jackson’s day. Today it’s possible to send a person to jail without showing criminal intent or even a culpable act — as Edward Hanousek discovered when the Supreme Court denied his appeal in 2000. A federal district judge sentenced Hanousek, a roadmaster for a railroad company in Alaska, to six months in prison after a backhoe operator working under Hanousek accidentally ruptured an oil pipeline, spraying a harmful quantity of oil into the Skagway River. Though he was off duty and away from the site when the accident occurred, Hanousek was convicted of unlawful discharge under the Clean Water Act by reason of negligent failure to supervise. In dissenting from the Court’s refusal to hear the case, Justices Thomas and O’Connor warned of exposing “countless numbers of construction workers and contractors to heightened criminal liability for using ordinary devices to engage in normal industrial operations.”
Martha Stewart is hardly the only American to feel the full weight of the federal government come down on her for an offense that merits a civil penalty at worst. For years, as Harvard Law Professor William Stuntz warns, we’ve been constructing “a world in which the law on the books makes everyone a felon, and in which prosecutors and police both define the law on the street and decide who has violated it.” In that world, the ordinary citizen can fall as easily as can the rich and famous.
I think she’s still going to get off on appeal, especially with this guy on the case:
- One-time Clinton White House legal adviser Walter Dellinger will take on the appeal for Martha Stewart after her sentencing Friday morning
….ABC News has learned Dellinger intends to focus on an overall pattern of unfairness. Points Dellinger is prepared to raise include:
The perjury by Juror Number 4 (Chapell Hartridge), who failed to disclose a 1997 arrest for domestic assault and an attempted robbery conviction for his son, and the decision to not prosecute.
The perjury by Larry Stewart, the Secret Service national ink expert, and the defense assertion that he is a member of the prosecution and that at least five other persons in the Secret Service knew of the perjury. Additionally, the defense asserts that it would have been reasonable for the government to have known of the risk of prejudicial testimony well before the end of trial, if not before the testimony was given.
In the government opening argument the assertion of an “insider tip” came up 17 times, yet the judge had ruled that the defense could not address the issue of insider trading before the jury. Dellinger is expected to state that when the prosecution talked about secret tips, they were using code for insider trading which the jury would understand.
That testimony by Stewart’s best friend Mariana Pasternak that asserted Stewart knew when to sell her stock was allowed to stand, with no instruction to the jury, despite the fact that later Pasternak said she might have “imagined” the critical conversation.
That Martha Stewart’s constitutional right to confront witnesses against her was violated when the prosecution introduced statements her co-defendant Peter Baconovic made to investigators, in which he said that he had never had a conversation with Martha’s business adviser in which they agreed to sell her shares of ImClone if the price fell below $60.
That the judge did not order a hearing to determine if the prosecution was aware of Larry Stewart’s perjured testimony.
That the inclusion of the securities fraud charge unfairly prejudiced the jury. [ABC News]