Martha Stewart Focuses On Her Salad

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Martha Stewart said Tuesday she wants "to focus on my salad," but paused from cabbage-slicing to predict that the investigation of her stock dealings will be resolved and "I will be exonerated of any ridiculousness."

But it wasn't what she said that stood out, but how she said it. Agreeing to take questions only during her regular weekly appearance on the CBS News Early Show, Stewart made her first public comments about the ImClone scandal without once interrupting her cabbage chopping.

CBS host Jane Clayson introduced Stewart's weekly segment with a summary of events surrounding Stewart's sale of ImClone stock.

Allegations that she used inside information to sell her shares of ImClone before the stock nose-dived are "ridiculousness," Stewart said.

Stewart has parlayed the image of multi-tasking domestic diva into multi-millions. But perhaps today, she should not have tried to do two things at once.

"There is something silly, desperate, and pathetic about it," Eric Dezenhall, who manages corporate public relations crises, told CBS News Correspondent Jim Axelrod.

"There is a certain 'Saturday Night Live' backdrop to all this that will probably last in the public consciousness for awhile."

Stewart also said she was tired of the attention that the spreading stock scandal is attracting.

Seemingly contradictory accounts of Stewart's sale of ImClone stock and actions by a widening circle of her acquaintances are drawing the attention of congressional investigators.

Stewart sold shares of the biotech company shortly before the government announced it had rejected ImClone's approval application for the cancer drug Erbitux, sending the value of ImClone shares into a tailspin. There are allegations she was tipped off to the FDA decision.

Stewart is an Early Show contributor. Before her regularly scheduled morning segment, Stewart agreed to answer questions posed by CBS News Correspondent Jane Clayson in the show's kitchen area.

Stewart refused to answer many of the questions, citing the ongoing investigation. The Doyenne of Living Well seemed uncomfortable and eager to get on with presentation on creating a salad.

Stewart, who commands a multimedia empire and a profitable corporation, increasingly is under the glare of government scrutiny and tabloid attention.

"When I was a model — and I was all during high school and college — you always wanted to be on the cover of a magazine. That's how your success was judged. The more cover, the better," she told Clayson. "I am a CEO of a New York Stock Exchange-listed company and I don't want to be on any covers of any newspapers for a long, long time."

Whatever the public thinks, Stewart's appearance didn't hurt her with investors. After losing 1/3 of its stock value since the story broke, Stewart's company, Martha Stewart Living Omnimedia, picked up nearly a dollar a share today – a 13 percent gain.

Omnimedia stock is traded on the New York Stock Exchange, of which Stewart recently became a director.

In a separate development, about 80,000 ceramic potpourri simmering pots sold under the Martha Stewart Everyday brand are being recalled because they could burn consumers.

Cincinnati-based Candle-lite has received nine reports of tea lights inside the pots overheating, the Consumer Product Safety Commission said Tuesday. One consumer received minor burns while attempting to extinguish a tea light, the agency said.

The safety commission said consumers should stop using the pots and for information on refunds call Candle-lite at 1-800-718-7151 between 8:30 a.m. and 5:30 p.m. EDT Monday through Friday.

What Stewart, herself a former stock broker, and her now-suspended Merrill Lynch broker have said about the sale apparently clashes with the account of the broker's assistant.

The affair has supplanted Enron Corp. and other companies as the corporate scandal du jour:

  • Former ImClone chief executive Samuel Waksal, a friend of Stewart, was arrested June 12 by FBI agents at his New York City apartment on charges of securities fraud and conspiracy. Waksal invoked the Fifth Amendment the next day at a House hearing and refused to answer lawmakers' questions.

  • On Friday, Peter Bacanovic, the Merrill Lynch broker shared by Stewart, Waksal and Waksal's two daughters, and Bacanovic's assistant were suspended with pay by the brokerage firm for what it called "factual issues regarding a client transaction."

    Investigators with the House Energy and Commerce Committee are examining whether Stewart had inside information when she sold nearly 4,000 shares of ImClone on Dec. 27, a day before the announcement that the Food and Drug Administration had decided not to consider Erbitux, an experimental drug for combating colorectal cancer.

    Investigators say Stewart's telephone log shows Bacanovic called her on Dec. 27 and told her, according to her secretary's entry, that he "thinks ImClone is going to start trading downward."

    But Ken Johnson, a spokesman for the House panel, said the stock had been declining for several weeks. "Why did Mr. Bacanovic call her on that particular day?" he asked.

    Investigators want to know whether the call occurred before or after ImClone stock hit $60, the level at which Stewart has said she had a standing order with Bacanovic to sell her shares. Stewart also tried to reach Waksal that day.

    The investigators also want to look at Bacanovic's client list to see whether others dumped ImClone stock before the FDA rejection became publicly known.

    More broadly, federal prosecutors and the Securities and Exchange Commission have been investigating trading of ImClone stock by several people.

    Stewart has said repeatedly that her trade was legal and based on information available to the public at the time.

    Bacanovic's assistant at Merrill Lynch, Douglas Faneuil, who handled Stewart's ImClone sale, has given information to the company that appears to contradict what Stewart and Bacanovic maintain was the trigger for the sale.

    They have said the stock was sold because of a previously arranged order to dump the shares when ImClone fell below $60. Such a "stop-loss" order, a common practice, would back up Stewart's position that she didn't trade on inside information. But recent statements from Faneuil to Merrill Lynch legal officials have cast doubt on whether such an order existed, The Wall Street Journal reported Monday.

    There is another discrepancy: Bacanovic has said he and Stewart decided to put the stop-loss order in place on or after Dec. 10, while Stewart told the investigators it took effect in late November.

    It turns out Stewart was not alone on the private jet she took from Connecticut to San Jose del Cabo, Mexico, on Dec. 27, the day of her stock sale. With her was Mariana Pasternak, the ex-wife of Bart Pasternak, the doctor who sold 10,000 ImClone shares the following day, before the company announced the FDA rejection.

    Investigators have interviewed Pasternak and want to meet with Mariana Pasternak, Johnson said.

    Bart Pasternak told The Associated Press on Saturday that he, his ex-wife and Stewart have done nothing wrong.

    "We certainly did not do anything that is under investigation," he said. "Our friendship with Martha makes us the subject of questioning. I'm absolutely convinced she did nothing wrong."
    • Dan Collins

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