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Congress To Martha: Let's Talk

House investigators sent a letter to Martha Stewart's lawyer asking again for the opportunity to question Stewart on her possible involvement in an insider trading scandal at ImClone Systems.

The House Energy and Commerce Committee requested additional documents from Stewart on Tuesday - including e-mails and records from her business manager - as they widened the probe into her sale of ImClone shares a day before they plummeted.

In a letter to Stewart's lawyer, the committee chairman, Rep. Billy Tauzin, R-La., and Rep. James D. Greenwood, R-Pa., chairman of the subcommittee on oversight and investigations, requested an interview with Stewart to clear up discrepancies between her account of the sale and that of her broker and his assistant. [Stewart is a contributor to CBS News' The Early Show.]

Stewart, chief executive of Martha Stewart Living Omnimedia Inc., has declined to meet with investigators, saying it's premature. However, her lawyer said they would do everything they could to comply with the committee's request for documents.

Stewart disposed of nearly 4,000 shares on Dec. 27, a day before ImClone stock tanked on the news that the Food and Drug Administration refused to accept the biotech company's application to review its highly touted cancer drug.

Stewart maintains she simply had an order to sell her stock when it went below $60. But doubt has been cast on that assertion because she and her Merrill Lynch broker, Peter Bacanovic, differ on when the order was placed.

Bacanovic's assistant, Douglas Faneuil, originally said there was such an order but has since changed his story.

Tuesday's New York Times and Wall Street Journal reported that Faneuil told investigators that Bacanovic ordered him to call Stewart to advise her to sell her shares because ImClone's founder and members of his family were dumping their shares. Phone records obtained by the House committee show no record of such a call, said Ken Johnson, a spokesman for the panel.

They do have a record of Bacanovic calling Stewart that afternoon, shortly after which she sold her shares.

Furthermore, a statement given under oath by Stewart's assistant, Ann Armstrong, said that Bacanovic called Stewart on the morning of Dec. 27. There is no record of that call.

"Clearly someone is lying to us and we want to find out who it is," Johnson said. "If Ms. Stewart has been truthful as her lawyers have said why shouldn't she tell her story to us under oath?"

Johnson also noted that a June 12 letter from Stewart's lawyer to the committee said she had no inside knowledge about any actions the FDA was taking about ImClone. But it doesn't address if she knew that her friend, former ImClone CEO Samuel Waksal, was trying to sell shares and that his daughter had dumped a large block of stock.

Waksal was arrested in June on insider trading charges for allegedly tipping off members of his family to sell ImClone shares. Waksal has not been indicted. Plea negotiations were under way.

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