Martha's Dilemma

Martha Stewart and the markets AP / CBS

Martha Stewart made news Monday night when she told CNN's Larry King that she is considering serving her prison time either in lieu of an appeal or while she brings her case to the 2nd U.S. Circuit Court of Appeals. Her studied indecision about such a crucial topic is a dramatic change from her public posture on Friday, immediately after she was sentenced to five months in prison and five months home detention, when she defiantly extolled the virtues of her appellate team and the many issues they would raise.

Stewart's waffling ought to come as no surprise. She's trapped between two contradictory forces that are pulling her in opposite directions. If she listens to her legal advisers, she'll file her federal appeal, try to continue to do damage-control on the PR front, and hope for a good result sometime in 2005. But if she chooses this path she'll do so at a potentially catastrophic cost to her business, Martha Stewart Living Omnimedia, which craves now more than anything the certainty and finality of having this case over and done.

On the other hand, if she listens to her financial advisors, and serves her prison sentence now instead of filing her appeal, she'll never again have the opportunity to formally clear her name. And even if she serves her time while she appeals her conviction any favorable result from the 2nd Circuit will seem like a pyrrhic legal victory. She cannot do what's best for herself legally without further jeopardizing her financial position. And she cannot do what's best for herself and her company financially without limiting the effect of her legal options. She's caught between the counter and the kitchen knife.

So it's no wonder Stewart seem downright dazed and confused Monday while sparring with King. After watching the interview, and after reading the transcript, I still can't decide whether Stewart still is arrogant and defiant or whether she truly is oblivious to the perceptions she creates about herself. I still don't know whether I feel sorry for her or want her to slink away to oblivion. I still can't tell whether she just doesn't get it or whether the odd things she says and the odd way in which she says them are part of her charm. Maybe those ambiguities alone ought to convince Stewart that her best bet now is to shut her mouth, go to prison, serve her time, and then emerge subsequently to re-direct her company. The first act of her life now is over. Stewart should immediately proceed to the second act, the comeback, which, as everyone knows, is virtually a birthright for the rich and famous in America.

King had barely started the interview when Stewart tried to wrest control over it. "Are you an expert?" she snapped at King when he asked her if she knew she might only have to serve four months of the five-month term. "What would you do, Larry?" she blurted out after King asked her what she would do about the choice between an appeal or incarceration. I'm no expert in prison etiquette but I'm fairly certain that Stewart isn't going to make any friends among the guards and fellow inmates at the Danbury, Conn., prison if she answers a question with a question every time she is asked one. And the way she started the interview made it difficult to believe her later when she told King that she is a "softie," not a "meany."

When King asked her why she thought she had been investigated and then prosecuted, Stewart answered: "Many people have said that it is because I am a woman. Many people have said it is because I am a business person, a successful business person. But maybe so. I don't know for sure ... I don't know. I think it was a combination, and a coincidence." This is a remarkable thing to say for a woman who was prosecuted and convicted of lying repeatedly about the December 2001 sale of her ImClone stock. Indeed, prosecutors were able to effectively pin crimes on Stewart because they convinced jurors that Stewart failed or refused to take advantage of the many opportunities given to her to come clean about the sale. It's possible to argue that Stewart initially was targeted because of her symbolic value as a defendant. But given her felony convictions it's no longer viable to argue that she is an innocent pawn in all of this.

Which is why it's weird that there still are so many signs that she just doesn't get it. When King asked her to talk about what her ordeal had taught her, Stewart said: "It's taught me a lot of things. And I think I'll write a book. Because, I think it could be helpful to other people, just about ... just about what lawyer to choose, how to behave, how to attend an interview. I mean there's things that, you know, there's no how-to book about this." Is she kidding? A how-to book about obstructing justice? A how-to book about turning a molehill of a stock sale into a mountain of a prison sentence? A how-to book about getting trounced in court and in the court of public opinion?

The lesson Stewart should have gleaned from her investigation and trial is that either you should tell the truth to investigators when they ask you questions or you should hire a good attorney who will encourage you to exercise your 5th Amendment right to refuse to answer questions. What Stewart shouldn't include in her how-to book is advice for readers to do what she actually did, which was to hire attorneys who didn't protect her properly, to volunteer to talk with investigators when she didn't have to, and then to tell a story to the authorities that led to the judge calling the evidence of her guilt "overwhelming." Maybe the title of her book should be: "How To Get Nailed For Lying About Insider Trading When There Isn't Any Insider Trading."

A lot of people have asked me over the past few months why so many Americans are fascinated with the rise and fall of Martha Stewart. Monday's interview suggests an answer. Even as she was offering goofy responses, and giggly inappropriately, and telling the world that she "loves" Nelson Mandela, the callers to King's show were overwhelmingly supportive of her. Those supporters are likely to stick around long after Stewart serves her time and/or pursues her appeal. They are likely to continue to buy her products and support her ventures. And it's not like Americans haven't forgiven public figures before for a lot worse than what Stewart did. Monday night's performance tells me that it's time for Stewart's comeback. Only she has to go away first.

By Andrew Cohen
  • Lloyd Vries

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