Martha Stewart Verdict
[Sorry, the video for this story has expired, but you can still read the transcript below. ]
TERENCE SMITH: The six-week trial of Martha Stewart and her stock broker, Peter Bacanovic, came to an end today when the jury found her guilty on all counts. Prosecutors had charged Stewart and Bacanovic with conspiracy, making false statements, and obstruction of justice in the investigation of her sale of stock in biotech firm ImClone one day before the FDA denied approval of the company’s new cancer drug.
With me now is Constance Hays who has been covering the trial for The New York Times. She was in the Manhattan courtroom when the verdict was announced. Constance Hays, what was it like when the jury filed in after what, three days of deliberation?
CONSTANCE HAYS: What we first heard, there might be a verdict. We sat for an hour before anything was announced. The first guilty verdict against Martha was read by the judge and a gasp broke out from some of the spectators who were there to support Martha. And then one by one, the judge read off three more guilty verdicts against Martha, and then four against her codefendant Peter Bacanovic. It was very serious, very solemn and ended very quickly.
TERENCE SMITH: Could you tell from the jury’s body language when they came in what they were about to say?
CONSTANCE HAYS: They were very serious and that’s usually a sign they reached a guilty verdict, so, yes, you could.
TERENCE SMITH: The family and friends that have been there behind the defendants?
CONSTANCE HAYS: Well, Martha’s daughter, Alexis, who has been in the front row pretty much since it began, she kind of slumped and began to cry and one of Martha’s lawyer who is also married to Alexis, wiped a few tears away. For the most part, people were kind of stoic. I think a few friends of her cried a little bit. But Martha herself seemed to take it almost in stride.
TERENCE SMITH: Did you get the sense the defendants and their attorneys were surprised?
CONSTANCE HAYS: I did think so. And I think that the throwing out last Friday of the securities fraud charge against Martha Stewart had given them sort of renewed hope and confidence that this was going their way. My personal view is that it may have made it easier to convict her on the other charges because it was one of the more confusing charges and one of the more difficult to prove. So, without it, there was a clear path ahead for the jury.
TERENCE SMITH: Now, Martha Stewart immediately posted a statement on her Web site afterwards. Tell us about that.
CONSTANCE HAYS: Well, she said that she was obviously distressed with the verdict and that she felt that she still had done nothing wrong, which she has maintained all along. And then she said she has plans to appeal and I’m sure she will.
TERENCE SMITH: I noticed that subsequently on the Web site, she deleted that assertion that she had done nothing wrong. What was behind that?
CONSTANCE HAYS: I’m not sure. Maybe a lawyer did it. I don’t know. But maybe they’re trying to take a different tact next time around. I know they plan to ask for a new trial. Her lawyer said in court they would like 45 days or so to prepare the motion.
TERENCE SMITH: Were you able to talk to any of the jurors after the trial?
CONSTANCE HAYS: I was able to talk to one. A group of us were able to talk to one of the jurors, juror number eight. He was very specific about the things that influenced their position. He did say that Martha was actually the easiest person to get through on the charges. They did her first and spent longer time on Peter Bacanovic because he was charged with perjury which is more difficult to convict on.
One of the things he did say that was important I thought is that the testimony of Martha Stewart’s assistant, Ann Armstrong, was influential in determining what they thought. Another thing, several celebrities came is, probably at the invitation of Martha and her lawyers to court. One was Bill Cosby, one was Brian Dennehy, another Rosie O’Donnell. Mr. Hartridge said the presence of the celebrities didn’t matter much. But when pressed on it a little bit, said if anything, it was kind of an insult. For all Americans’ obsession with celebrity culture, here it didn’t work out very well.
TERENCE SMITH: He suggested there was some sort of implicit pressure in their presence?
CONSTANCE HAYS: Almost, or advertising or spinning or something. But it clearly didn’t carry well with the jury.
TERENCE SMITH: You mentioned that he cited the testimony of her assistant, Ann Armstrong. What was so damaging about that?
CONSTANCE HAYS: Well, Ann Armstrong had taken the message on Dec. 27, 2001, from Peter Bacanovic in which he said something to the effect he thinks ImClone is going to start trading downward. That’s the message she took town and testified she took it after talking to him about how to reach Martha that day flying in a plane to Mexico.
In court, the tape was played of Peter Bacanovic’s interview with the SEC in which he said slightly different, quite a bit different about a price he said he left a price and Ms. Armstrong said he did not leave a price. That made a difference for the jury. That’s one of the things they looked for in the perjury charge. Another thing about Anne Armstrong, people kind of left her alone. She cried on the first day, a gentle cross-examination by the defense lawyer and zeroed in on another witness, Doug Faneuil, who had been Peter Bacanovic’s assistant and handled the call that resulted ultimately in the trade. I think in some ways everybody’s focus was on Doug Faneuil when Ann Armstrong was influential and had a bigger role than people predicted.
TERENCE SMITH: Peter Bacanovic, what was he convicted on and what does he face?
CONSTANCE HAYS: Like Martha, he was convicted of conspiracy and obstruction of justice and false statements. He was clear on the charge of false documents, the notation on a stock worksheet made with a different color pen. I don’t think the jury bought the government’s argument that the pen came from different ink and was from a different time. He was convicted of perjury which is quite serious. Martha now has to await sentencing on four criminal charges.
TERENCE SMITH: That sentencing, June 17, any sense among court watchers what sentence might be handed down say in the case of Martha Stewart?
CONSTANCE HAYS: We really have no idea. It’s up to the judge; it’s up to a number of different factors, and anyone who tells you right now what she’ll get, it’s probably winging it, I’m afraid.
TERENCE SMITH: She could get up to 20 years but do people expect her to get 20 years?
CONSTANCE HAYS: I don’t think so. No, I think that’s extreme.
TERENCE SMITH: On the ground it’s a first offense.
CONSTANCE HAYS: I think first offense, and there’s a lot of other factors that go into it and there will be a big pre-sentencing report and there will be appeals and letters written by her friends and people who know her. It’s a process and it’s supposed to start on June 17 but they almost always get pushed back and I wouldn’t expect it to happen that day either.
TERENCE SMITH: What is the impact on her company, which has been so identified with her and her personality?
CONSTANCE HAYS: Yeah, that has been one of the tragedies of all this. The company, which is full of people who admire her and work for her and follow her have taken a beating over the last two years. And today they halted trading on the stock as news of the verdict reached the stock exchange. But they did reopen it and the stock fell, I think more than 22 percent. It fell more than $3 very quickly. And Monday will probably be more of the same.
TERENCE SMITH: All right. With an appeal to come, the story is obviously not over. Constance Hays, thanks very much.
CONSTANCE HAYS: Okay. Thank you.