system.
In fact, the Stewart case is a textbook example of
all that’s wrong with the system. As a civil
litigation attorney in Columbus, Ohio, and federal
inmate No. 65078-061, my criminal legal odyssey, which
ended in 1999 with a 38-month federal prison sentence,
began much like Stewart’s — when a “target letter” from an
assistant U.S. attorney was delivered to my Ohio home
via the U.S. Postal Service.
By looking at the six-week Stewart trial, the verdict on Friday
and the June sentencing — with their collateral
consequences ? the inherent problems of “The War on
White Collars,” waged by the U.S. Justice Department
under Attorney General John Ashcroft, become apparent.
Beginning the moment the FBI called in Stewart for a
meeting, her chances of not ending up in prison
dropped to 5 percent. According to the 2001 Compendium
of Federal Justice Statistics by the Justice
Department, 95 percent of all federal charges end in a
conviction — whether through a plea bargain or guilty
verdict at trial.
With only a 5 percent chance of securing an acquittal,
most white-collar federal defendants opt for a guilty
plea to minimize their risks of a long prison
sentence. Samuel D. Waksal and Andrew S. Fastow and
his wife, Lea Fastow, of Enron Corp. fame are prime
examples of this phenomenon.
Waksal, the jet-setting scientist and entrepreneur who
founded ImClone Systems Inc., is serving a prison term
of more than seven years after pleading guilty to
securities fraud charges related to his sale of 4,000
shares in December 2001. In his plea, Waksal did not
implicate his friend Stewart.
Andrew Fastow, Enron’s former chief financial officer,
is serving a 10-year prison term after pleading guilty
last month to charges related to the energy-trader’s
debacle. His wife has been sentenced to five months in
prison and a year of supervised release on charges
stemming from filing false tax returns from 1997 to
2000. She was Enron’s assistant treasurer.
As a former stockbroker and one of the nation’s
most-successful entrepreneurs, Stewart’s first mistake
was putting her fate in the hands of a lawyer. If
Stewart was going to go to trial, she should have
taken control of her own defense just has she has
controlled her company, Martha Stewart Omnimedia Inc.
No one knows their case better than the defendant.
A failed strategy
It was clear from the start that things were not at
all copasetic in the Stewart camp. Her attorney,
Robert Morvillo, may be the best white-collar defense
lawyer money can buy, but this case wasn’t about the
law: It was about America’s criminalization of moral
and ethical issues.
Stewart’s best chance at winning over the jury of
eight women and four men was lost when she walked into
U.S. District Court in Manhattan carrying Hermes
Berkin bag instead of a Kmart Corp. Accessory Works
bag. Clearly, if stupidity were a crime under
America’s conspiracy laws, her image consultants would
be facing a 20-year prison sentence, too.
On one hand, you had Morvillo telling the jury that
they should trust his client, and on the other hand
not a single juror qualified as one of Stewart’s
peers. While the U.S. Constitution guarantees each
American charged with a crime a jury of her peers, the
reality is that the possibility of finding enough
millionaires to create a jury pool is virtually zero.
Instead of Morvillo focusing the jury’s attention on
what they had in common with Stewart, his questions
pointed out a stark contrast in the wealth disparity
between Stewart and the “jury of her peers.”
For instance, in his closing argument last week
Morvillo implored the jury to let Stewart go free such
that she might get back to her life saying, “? and
that would be a good thing.”
In doing this, Morvillo alienated jurors by inferring
that even if Stewart had made a mistake, it did not
matter because it would benefit all Americans if his
client could return to her privileged life as
America’s domestic doyenne in order to perpetuate a
lifestyle that they, the jury, then could emulate.
Stewart should have put on a Jaclyn Smith suit from
Kmart and testified in her own defense. Even though
some would argue that Morvillo was right to keep her
off the stand, Martha Stewart clearly knows how to
package and sell Martha Stewart to the America that
comprises the “jury of her peers.”
The human factor
Federal defense attorneys, for the most part, simply
do not understand the federal prison reality. What
they do understand, however, is collecting their huge
fees upfront, because there is a 95 percent chance
their client is headed to prison. Even those federal
defense attorneys like Morvillo who clearly understand
the law do not understand the role human
dynamics plays in jury decisions.
Morvillo ignored the fact that Stewart, regardless of
whether she is guilty or not, is a human commodity.
His decision to not let her testify disconnects her
from the typical consumer of her products, who also
were the “jury of her peers.” At no time was Martha
Stewart, the person, allowed to connect ? on any level
— with her jury.
The only person telling Stewart’s side of the story
was Morvillo — and he’s not Martha Stewart. While
some jurors admitted that hearing from Stewart would
have made no difference in their decision after three
days of testimony, Morvillo passed up the opportunity
to have his client speak to the jurors as one person
to another.
In doing so, the jury could have related to the pain,
as well as the problems, that resulted from Stewart’s
decision to sell her ImClone shares.
Opting for plea deal
Unlike Stewart, many white-collar professionals, like
myself, choose a plea deal over a trial even if they
truly believe they are not guilty simply because they
cannot afford the astronomical costs to conduct a
federal criminal trial.
In my case, I faced as many as 30 counts of interstate
securities fraud but agreed to plead to a single
count. A trial would have cost about $250,000. Many of
those convicted of white-collar offenses feel that a
shorter sentence, in exchange for a guilty plea, is
safer than risking 20 years, which is what Stewart
faces.
In addition, what now is known as the Feeney
amendment, passed by Congress last year, radically
limits judicial discretion in federal sentencing.
Introduced by U.S. Rep. Tom Feeney (R-Fla.), the
legislation essentially places virtually all
sentencing discretion in the hands of federal
prosecutors, thereby limiting Judge Miriam Goldman Cedarbaum’s flexibility in determining how much time
Stewart should serve.
Most likely, Cedarbaum will sentence the domestic
maven by the book in June, guaranteeing some prison
time for Stewart.
Sizing up the jury
Reading the comments in the transcripts that were
released to the media at the end of each day of the
closed jury-selection process, it increasingly became
clear that Morvillo’s strategy was to focus the jury’s
attention on ignoring his client’s celebrity instead
of using it to draw parallels between their lives and
Stewart’s.
The defense needed white-collar professionals who
harbor no ill will toward Stewart for her decorating
tastes; prosecutors needed blue-collar workers who
harbor ill will against incredibly successful, wealthy
white-collar females who can afford to carry Hermes
Birkin bags that cost more than they make in one year.
And while the Stewart jury contained eight women, an
all-male jury might have worked better for the
home-decorating diva. It has been my experience that
many women dislike highly successful women like
Stewart because many believe that we think we are
perfect. In reality, women like Stewart are, in fact,
so terrified of making mistakes that they
overcompensate at the risk of appearing compulsive
obsessive.
Complicated case
With all of the pre-trial hoopla, the trial itself
was anticlimactic. Stewart’s very talented defense
team faced an uphill battle once the trial began in
earnest because of the complex nature of the charges
against her. It’s one thing to understand the legal
concepts involved in the case; it is an entirely
different matter when one has to educate the jury
about the vagaries involved.
In addition, Morvillo did not appear to be
aggressively cross-examining the prosecution’s
witnesses, particularly the government’s star witness,
Douglas Fanueil, the Merrill Lynch & Co. trader who
tipped Stewart that Waksal was dumping his ImClone
shares.
Morvillo, furthermore, admitted in his closing
argument that Stewart “lied” but that she didn’t mean
to. Either you did or you did not. The attorney left
more than one juror wondering whether, in fact, he
himself had tried to reconcile Stewart’s behavior with
the legal standards applicable to the case on all the
charges.
Last bid for mercy
From the moment the guilty verdicts were read Friday,
Stewart’s life, as she once knew it, was over.
Reporting to the U.S. Probation Office as early as
Monday, her life will be subjected to microscopic
inspection and will be detailed in a presentencing
report to be given to Cedarbaum along with a
sentencing recommendation. Stewart’s last chance to
mitigate the damage done by not taking the stand will
come at this time.
If Stewart can connect, on a human level, with the
probation officer assigned to her case, she may be
able to convince that person that she is, in fact,
just an average American.
While I don’t see that happening, for Stewart’s sake,
I hope she dons a pair of Route 66 jeans and a Joe
Boxer shirt from Kmart when she shows up for her
appointment. She could alienate the person who will
paint a literary portrait of her life that will
determine how long Stewart will have to serve in the
“War on White Collars.”
Karen S. Bond is a former federal prisoner and civil litigation attorney. She served a 38-month federal prison sentence for interstate securities fraud and
now is director of government affairs for the Federal
Prison Policy Project, a nonprofit
organization working for federal criminal justice
reform and based in Columbus, Ohio.
