Martha Stewart's trial starts today in New York

She's reportedly eager to defend self on stand

January 20, 2004|By KNIGHT RIDDER/TRIBUNE

NEW YORK - The Martha Stewart show opens today in federal court in Manhattan, with the domestic goddess ready to take off the kitchen mitts and fight back on the witness stand.

Stewart has been undergoing mock cross-examinations and is eager to testify at her trial on conspiracy, securities fraud and obstruction of justice charges, say her lawyers and others familiar with her thinking.

"Of course the defendant wants to testify," said co-counsel Robert Morvillo, who declined to discuss specifics of her pretrial preparation.

Morvillo emphasized that while his famous client is ready to take the stand, he will not advise her on whether that's a good idea until the prosecution rests.

He conceded, though, that her image as the princess of perfection may work against her.

"You've got the Kathie Lee Gifford syndrome here," he said. "The image that's been projected is she gets on TV and says, `I'm trying to make the perfect apple pie.' The public has come away with the perception that she has tried to portray herself as a perfect human being. And now that perfect human being has stubbed her toe."

Stewart, 62, and her ex-stockbroker, Peter E. Bacanovic, 41, are set to appear at Courtroom 110 in the Foley Square Courthouse. That's the site of some of the nation's most memorable prosecutions, from the 1951 Julius and Ethel Rosenberg spy case to the 1993 World Trade Center bombers' trial.

The circus atmosphere is building, with Stewart fans vowing to wear chefs hats and aprons while forming a "human billboard" outside the courthouse.

The trial before Manhattan Federal Judge Miriam Goldman Cedarbaum is expected to last six weeks, starting with jury selection this week. Stewart faces up to 10 years in prison if she is convicted.

To prepare for her close-up, Stewart completed a kind of boot camp for criminal defendants, according to people familiar with her pretrial prep work.

She has immersed herself in the details of her case, reviewing stacks of transcripts and documents, and she has submitted to mock cross-examinations in her lawyers' Fifth Avenue offices.

That way, her lawyers hope, she will be ready if she takes the stand for what would be expected to be aggressive cross-examination by Karen Patton Seymour, head of the Manhattan U.S. attorney's criminal division.

"She's very anxious to go in there and explain her side of the story," said a source close to the Stewart camp.

Morvillo said Stewart wants to tell her version of events to clear her name, but has come to understand that courtroom rules limit what a person can say and how she can say it.

Taking the stand has its risks; the Stewart indictment charges she repeatedly lied to investigators looking into her now infamous sale of ImClone Systems stock on Dec. 27, 2001.

Stewart insists there was a prearranged agreement with her broker, Bacanovic, to sell ImClone if it dipped below $60 a share. But Douglas Faneuil, the broker's assistant who handled the transaction, says he knew of no such arrangement.

He also says he gave Stewart what prosecutors say is important information not available to the public: that ImClone's founder, Stewart friend Samuel D. Waksal, was trying desperately to dump a good chunk of his and his family's stock.

When Stewart was questioned by prosecutors on April 10, 2002, she said she "did not recall" whether the Waksals' stock sales were mentioned that day, the indictment charges.

Prosecutors say Stewart also told the Securities and Exchange Commission that she couldn't remember if there was a message from Bacanovic about ImClone in her message log. But four days before saying that, she had tried to delete that precise message, they allege.

Stewart also contends she did not talk with Bacanovic about his SEC testimony, but records show there's a cell phone call from her to him the morning he went in.

There's also the matter of differing ink. The notation "60" on a ledger of Martha's tax losses is written in ink that's different from what is found on the rest of the page. Prosecutors say that's proof the $60 stop-loss story is a cover-up.

Meanwhile, Stewart's lawyers have noted that Faneuil, the government's key witness, has not said Bacanovic told him to lie about the $60 stop-loss order.

The charges

Conspiracy: Alleges Stewart and co-defendant Peter E. Bacanovic, her stockbroker, "willfully and knowingly" worked together to obstruct justice and make false statements.

False statements: Alleges Stewart lied that she had pre-arranged to sell ImClone when it fell below $60 per share.

False statements: Alleges Stewart lied when she said she did not recall being told on Dec. 27, 2001, that the Waksal family was selling ImClone stock.

Obstruction of justice: Alleges that, from January to April 2002, Stewart "willfully and knowingly" tried to hamper the SEC investigation by providing misleading information.

Securities fraud: Alleges Stewart made misleading public statements in June 2002, after news of her ImClone sale broke, and intended to "defraud and deceive" investors in Martha Stewart Living Omnimedia.

Associated Press

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