The building pressure on Stewart to testify
As the prosecution wraps up its case, defense lawyers are laying out their strategy for refuting damaging testimony.
NEW YORK — Clerk: "State your full name for the record."
Witness: "Martha Stewart."
This could well be one of the most anticipated moments in courtroom drama since O.J. Simpson took the stand. Although it's not certain yet whether Ms. Stewart will testify, her lawyers will decide soon as the prosecution wraps up its case.
If the blond celebrity does take the oath, she will try to convince the jury that the whole affair can be explained. She would try to turn on her charm and show she's just an ordinary person - well, with a few extra recipes for duck pâté in her pocketbook.
With her defense about to begin, lawyers who have been watching the case believe she may have to testify to avoid losing - especially when it comes to the charge of misleading the government in its investigation of ImClone stock trades. That's because the government, which said it would rest its case Thursday, has been effective at painting a picture that only Stewart herself can explain.
For one of America's most famous businesswomen and cultural icons, taking the witness stand would present both the chance to win over the jury and the risk of being trapped by a nimble prosecutor. It is a decision her lawyer is likely to make in the coming days and weeks as he tries to gauge how badly she has been damaged by the evidence. One of the key factors he is likely to weigh: Many jurors will probably want to hear her side of the story.
"There is a much greater pressure than most criminal trials to put her on the stand," says Kirby Behre, a partner at Paul, Hastings, Janofsky & Walker in Washington. "You would have a fear of a backlash if she does not testify."
If she does take the stand, trial lawyers believe these are some of the key areas she'll have to address:
• The message change. Her assistant Ann Armstrong has testified that Stewart changed a phone message from Peter Bacanovic, her stockbroker, only days after she was told she was under investigation. The original message read, "Peter Bacanovic thinks ImClone is going to start trading downward." She changed that to "Peter Bacanovic re imclone," but then wanted it changed back again. Four days later she allegedly told the government "she didn't know" if there was a written record of his message.
"That is a powerful piece of evidence," says Mr. Behre, a former federal prosecutor. "It is the most damaging testimony."
It is also an area the prosecutor would most likely focus on during any cross-examination of Stewart. "I think the jury is very curious about why she changed the message," says Eugene Goldman, a former senior attorney with the Securities and Exchange Commission (SEC). "Why would she sit down at her secretary's chair and use the mouse on her computer and erase a message and type something else in?" asks Mr. Goldman, now a partner at McDermott, Will & Emery in Washington.
If he were still a government lawyer, Goldman says he would ask Stewart, "Why did you panic?"
• The government's notes. Stewart's lawyer, Robert Morvillo, has tried to raise questions about the accuracy of an FBI agent's handwritten notes. Behre says "that's the traditional attack on an agent's notes."
But Steve Thel, a law professor at Fordham University in New York, believes Stewart will have to refute the notes directly. "If her lawyer's defense is that she never lied, it is a hard argument to make without her version of the story," says Mr. Thel, a former SEC attorney.
• Stewart's version of the story. Stewart and Mr. Bacanovic maintain that they had a prior agreement to sell ImClone stock at $60 a share. On Dec. 27, 2001, the day that Stewart sold her shares, Sam Waksal, the head of ImClone, was desperately trying to sell his own shares. He knew that the next day the Food and Drug Administration was not going to approve ImClone's cancer-fighting drug. Bacanovic's assistant, Douglas Faneuil, has already testified that he told Stewart that Mr. Waksal was selling his shares.
Goldman says Stewart would probably face intense questioning about this issue. "I would want to ask, 'Do you deny that you heard that Sam was selling? When did you first hear it, and what was your source?' "
Stanley Twardy, a former US attorney for the District of Connecticut, notes that at least publicly, her story is so far consistent. "She's not telling three or four different stories," says Mr. Twardy, now a partner at Day, Berry & Howard LLP in Stamford.
Still, it is not a given that Stewart or her codefendant will testify. Mr. Morvillo said on Wednesday that he would present a list of possible defense witnesses late in the week, after he argues for a dismissal of the charges.
Lawyers say one additional reason he may decide to keep his clients off the witness stand is that the government can argue that the defendants committed perjury if they are convicted. This can be considered in the sentencing phase.
If the defendants choose not to testify, the judge will caution the jury not to hold that against them. But in reality, says Behre, "when the defense does not testify, you flaunt it."