Journalist James Stewart

Pulitzer Prize-winning journalist shares lessons learned from his investigation of some high-profile perjurers, which he writes about in his new text, Tangled Webs.

Pulitzer Prize-winning journalist James B. Stewart recently joined The New York Times as a financial columnist for its Business Day section. He's a former Page One editor at The Wall Street Journal and a regular contributor to The New Yorker and SmartMoney, which he helped launch. He's also the author of several best sellers, including Tangled Webs, an investigation into what he believes is the growing phenomenon of perjury. A lawyer by training, Stewart is a grad of DePauw and Harvard law school and teaches at the Columbia Journalism School.


Tavis: James Stewart is a Pulitzer Prize-winning journalist and best-selling author whose previous books include “Den of Thieves” and “Heart of a Soldier.” His latest text is called “Tangled Webs: How False Statements are Undermining America, from Martha Stewart to Bernie Madoff.” He was also recently named a columnist for the business day section of “The New York Times.” James Stewart, congrats on the new assignment and an honor to have you here.

James Stewart: Well, thank you. I’m delighted to be here.

Tavis: You doing all right?

Stewart: Very good, thanks.

Tavis: To the “Times” right quick, what do you hope to bring to your column, to this revered and widely read section of “The New York Times” every day?

Stewart: Well, I want to speak out for the individual, the individual shareholder, the individual consumer, because let’s face it, we live in a world where big business is dominated by the wealthy, the powerful, the big institutions, the insiders on Wall Street, and I think we need someone to stand up for everybody else.

Tavis: What’s your sense of what this new consumer protection agency will do in that regard?

Stewart: Well, let’s face it, there were tremendous excesses that led up to the financial crisis – people getting loans that never should have, interest rates that teased them in, got them out. We need someone to oversee this and make sure that both consumers are protected, and by the way, the institutions, because the banks ended up suffering as well from all this.

Tavis: Do you think that conversation can be had – that is to say, given the focus that is on Wall Street and the lessons that should have been learned that seem not to be learned, how do the people ever get traction on the issues that you attempt to raise or will raise in this column?

Stewart: Well to me, step one is getting the truth out there and getting people to focus on the facts. It’s not that controversial once you know what’s really happening. Operating in secret is what the big Wall Street firms have a wanted. They don’t want the derivatives trading to be put on the exchange. Disclosure, transparency to me is the beginning of reform.

Tavis: I’ll buy that. Congrats on the assignment.

Stewart: Well, thank you.

Tavis: Now to the book, “Tangled Webs.” The obvious question for me is what do Bernie Madoff, Barry Bonds, Scooter Libby and Martha Stewart have to do with me, or the everyday American, for that matter?

Stewart: Well, I chose these four stories in part because they’re very celebrated individuals, but because in fact they do, in different ways, reveal the consequences to all of us of what happens when perjury goes on in very high places, when false statements are being made in very high places. It’s not just the people who commit the lies.

In fact, in some ways that’s the least of it. You could argue that some of them, they’ve come out okay. They’re still rich, they’re still celebrities. But you look at the people drawn into the web around them, number one, people who were close to them, you look at people who relied on their false statements, investors who relied on it, voters who relied on it, sports fans who relied on – the damage to that.

You see the damage to the judicial system itself. The Barry Bonds case is a vivid example. He told those lies in front of the grand jury over eight years ago and many years and many millions of dollars later he finally came to trial a few weeks ago. Why is that? Because practically everyone in that investigation lied. That is, to use a bad sports metaphor, a world series of lying.

The Bernie Madoff case, investigators knew he was lying. He survived four SEC investigations and every time they knew he was committing perjury. They didn’t do anything about it. They just shrugged and said, “Oh, lying, what’s the big deal? A $65 billion Ponzi scheme was the big deal. People lost that much money. By the way, they weren’t just rich people in those hedge funds. There were middle class people, poor people, the elderly who lost everything.

Then finally, politics. We live in a democracy, and if we cannot rely on our elected officials not only to tell the truth generally but to tell the truth under oath, which is what they failed to do in the Bush administration, then how can we make intelligent decisions in the voting box? To me, the consequences are vast and they do affect each and every one of us.

Tavis: What does this book say, these cases in particular, James, say about the intersection of money and lying, money and perjury?

Stewart: Well, there’s a very close connection. It’s money and it’s power, and they go hand-in-hand in this world, we know that. One of the main reasons that people lie – it’s clear in this story – is out of some sense of loyalty, that there’s someone who asked them to lie for them. People who otherwise would never have considered lying under oath end up doing it. Why is that? Because someone has demanded that, has said show me the loyalty – Barry Bonds’ trainer being a vivid example.

But what happens, I’ve noticed, is the loyalty only runs in one direction. It runs from the less powerful and the less wealthy to the more powerful and the wealthier. They never show the loyalty in return. They’ll let people lie for them, they’ll let people go to jail for them, but they do not show them anything in return.

Why is that? Because people want to be close to them, they don’t want to jeopardize their livelihood, they don’t want to lose their jobs, they don’t want those fabulous investment returns to stop coming in and they get compromised by that. They lose sight of their legal obligations, their ethical obligations and they go along.

Tavis: I was giving a speech in Chicago the other day that really dovetails nicely with what your book is all about, at least as I read your book. At the center of these stories is really – my words, not yours – a battle that these persons and all the rest of us, for that matter, find ourselves in every day – a battle of truth versus power.

Are we going to be truth-tellers or power-grabbers? What’s happening in the world today that makes these people so often choose power over truth and moreover think they can getaway with it long-term?

Stewart: Well, I think you’re absolutely right about that, that power is trumping truth, that loyalty is trumping truth, and people are looking at the perceived short-term advantages of that and ignoring the longer-term consequences. Why are we in a society like this now? Because I think we are disproportionately valuing wealth, power, success and celebrity, to the exclusion of traditional values like honesty and integrity and generosity and kindness and concern about other people. Our value system has shifted.

Tavis: What’s driving that shift, do you know?

Stewart: Well, I think it’s a complicated factor. I think part of the problem with the perjury epidemic is that once people think everyone is doing it then it becomes self-perpetuating and that we get more and more of it. People see other people succeed who they believe have lied.

They see the class valedictorian walking across the stage who the other students think cheated and lied to get there. It becomes very pervasive in society, and we forget the consequences of that, which it’s so important, I think, for people to recognize that truth and the legal obligation to tell the truth has been a pillar of civilization since at least the Roman Empire.

It’s in the Ten Commandments, it was in medieval England. If we don’t honor that, if it becomes only the wealthy and the powerful who command the truth, who in fact determine what the truth is, then we are going to live in a society that’s essentially the law of the jungle, the code of organized crime and that’s why it is so important.

Tavis: You mentioned the Ten Commandments. I heard many years ago that the 11th commandment is “Thou shalt not get caught.” (Laughter) So I raise that to ask whether or not – and this is a philosophical question, obviously – whether or not it is lying, is it cheating, if you don’t get caught, because, to your point, so many folk are doing it?

Stewart: Well, let me just start by saying who knows in all these cases who was lying? The person telling the lie. You know. That’s a burden that you have to carry with you the rest of your life, and for some people, at least those who still have a conscience, that’s a very heavy burden to carry, and there are some characters in there who I think in a very poignant way come to terms with that and decide it’s more important to be honest and to live with yourself as an honest person than it is to get away with something by lying.

But nevertheless, obviously these main characters, why do they lie? They thought they were going to get away with it. If we want to do something about this problem, and I think it’s urgent that we do it, there has to be a message from the top, and I mean the president of the United States, that this is important. There has to be deterrents, there has to be prosecution, there have to be meaningful sentences.

At the other extreme each and every one of us I think has got to stop condoning this, sweeping it under the rug, looking the other way and reaffirming that success in this country, yes, it’s a great thing and it’s there for everyone, but it’s not going to exist, that opportunity is not going to be there, if people don’t play by the rules.

Tavis: You don’t think the examples of the last decade, even, where these names are concerned and others that didn’t make the cut, at least in terms of your book, but there are all kinds of high-profile people –

Stewart: Oh, there are plenty of them, plenty of them.

Tavis: Exactly, plenty of them. You don’t think those examples are sending the kind of message that needs to be sent, that you will get caught, that you will be prosecuted? One could argue – let me play devil’s advocate for a second.

Stewart: Mm-hmm.

Tavis: One could argue not only is the message being sent by these high-profile people being taken to task, but one could argue that they’re even piling on. Some believe they piled on Martha Stewart. Some believe they piled on Barry Bonds. So it’s not just a matter of sending the message; some would argue that they’re even piling on, so if you don’t get it now, then you’re really stuck on stupid.

Stewart: Well, to address that, each and every one of these characters made that argument. They said, “Oh, I’m just being persecuted because I’m a successful person.” Martha Stewart says, “I’m a successful woman, they’re out to get me.”

Tavis: “I’m a woman; they’re out to get me.”

Stewart: “I’m a woman; it’s sexism.”

Tavis: Yeah.

Stewart: I’m sorry, that’s just another lie. If anything, these people who are powerful and successful and celebrities got treated with kid gloves, and that is so clear in these stories when you see the prosecutor say, “My God, Martha Stewart? What’s in it for me? I don’t want to prosecute her.”

Barry Bonds had total immunity for every crime except for one thing, and that was not telling the truth before the grand jury. So these people got special treatment, really, because of who they were.

The problem is that yes, some of them got caught, but you see characters in the book who actually say, “Well, I saw Martha Stewart. She did a little brief stint in prison. That didn’t look so bad to me. She’s still a celebrity. I’m just going to go ahead and do this.”

Or a lawyer who lies in here – the lawyers take an oath to uphold the legal system and the guy says, “Well, President Bush commuted Libby’s sentence, so why doesn’t he commute mine? Why should I have to go to jail?” So really, the lack of meaningful punishment is, I’m afraid, encouraging people to do it.

Tavis: I’m glad you raised the commutation of Scooter Libby’s sentence, because what makes him uniquely different than the other persons you write about, other examples in this book, is that Scooter Libby took a dive or got caught and some folk much higher up got away.

Stewart: Right.

Tavis: Namely Dick Cheney, namely George Bush. In politics, it always seems to be the case that the guys at the top almost never get caught, but the aides, the advisers around them end up taking the fall, oftentime. I think of Oliver North during the Reagan administration. What is it about – is there something about politics versus business where these other people get caught and the higher-ups never do?

I’m asking that because if you want the president, whether it’s Obama or anybody else – you want the president to send a signal but the body politic is the worst example, where people at the top are ever held accountable, how does that happen?

Stewart: It is absolutely the worst example, and it’s probably the most vivid illustration where you see power and raw power trumping the legal obligation to tell the truth. It’s so serious, I think, because indeed, the president of the United States, the vice president of the United States, these are the two highest law enforcement officers in the country.

Now, what message you think it sent to law enforcement, to U.S. attorneys, to everyone involved in the legal system, not to mention society at large, when the president of the United States, after saying, “I won’t tolerate this, I’m not going to put up with it,” when confronted with it in his own administration looks the other way, commutes the sentence, doesn’t make him go to jail, is basically condoning this kind of behavior.

And it’s of course not unique to this. There has been a long and sorry tradition of lower aides in the White House lying to cover up for the misdeeds of the higher ups. Of all places, this is where it has got to stop. We know the practical reasons for this, and the power of the White House is such that when they say, “Lie to me,” or they’re essentially sending that message it takes a strong honest person to stand up to them.

But there are people like that, and we need more of them in the government, more in politics. I think Obama has a great opportunity here to strike a different message.

Tavis: It’s a book that a lot of folk are talking about. It’s by James B. Stewart, winner of the Pulitzer Prize. The book is called “Tangled Webs: How False Statements are Undermining America, from Martha Stewart to Bernie Madoff.” James, I enjoyed the book. Good to have you on.

Stewart: Thanks so much.

Tavis: It’s my pleasure.

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Last modified: May 25, 2011 at 3:40 pm