Like Martha Stewart, when I was first caught by the Securities and Exchange Commission, in a highly publicized insider-trading scandal 20 years ago while a columnist for The Wall Street Journal, I lied.

With five minutes' notice, I found myself in a phone interview with a federal investigator, my boss listening on the other line, being asked questions about my relationship with a stockbroker that I didn't want to answer. So, I lied.

Unlike Stewart, within weeks I decided to tell all, surrendering my phone and bank records, publicly apologizing for my bad judgment. I was prepared to take my punishment, which turned out to be nine months in Danbury (Connecticut) Federal Prison Camp.

Stewart's conviction brings into sharp focus two essential elements of the social contract in our culture:

• Without trust, that contract is broken.

• We are a people who look for opportunities to forgive.

What we can't forgive is unrepented lying, nor should we. There are no clearer examples of this than the decidedly different outcomes of the public missteps of Stewart - who lied, and California Gov. Arnold Schwarzenegger - who confessed.

Lying about important things is dangerous and degrades the human spirit. It clouds the conscience and distorts decisionmaking. Martin Luther, the 15th-century monk who risked his life to challenge a corrupt Catholic Church, wrote extensively about conscience, including one of my favorite quotes: "A bad conscience can only make men cowardly and fearful."

Lying causes needless grief, as Stewart has discovered and will spend the rest of her life regretting.

Caught dumping stock of drugmaker ImClone ahead of bad news, Stewart concocted a cover story. She lied to investigators. She tried to weasel her way through it. She insulted the US attorney and the SEC, and they slammed her.

Suppose, when the SEC first came snooping around, she had clapped a hand over her mouth and cried, "Oh, my God! What was I thinking?" Suppose she had agreed to undo the transaction, or pay a fine, or donate to a charity the $46,000 she saved by selling her stock before it lost 18 percent of its value. Suppose she had issued a press release explaining and apologizing to her shareholders?

The whole episode might well have blown over in a few weeks. She'd have been seen as just another victim of Imclone CEO Sam Waksal. She might have saved herself half a billion dollars in net worth, millions in legal fees, and her position as chairman and CEO of her company. She might even have enhanced her credibility.

When the Los Angeles Times exposed Arnold Schwarzenegger as a serial groper - a far worse offense, bordering on sexual assault - did he realize what he was doing by confessing and apologizing? Or was it just a good instinct? The stunned media hardly knew how to report the story. Political pundits congratulated him for his refreshing candor but predicted it would damage his chances of winning the California governorship. They were wrong. Voters rushed to the polls to forgive him.

The defining moment of that scandal came shortly after the election, when Mr. Schwarzenegger, concluding a press conference, was asked about the allegations of womanizing. The question was shouted as he headed for the door, and without breaking stride, he called back over his shoulder, "Old news."

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