Martha Stewart engaged in financial shenanigans that were arguably criminal and incontestably sleazy. She then lied to federal agents about them and obstructed justice. Today, Judge Miriam Goldman Cedarbaum in Manhattan imposed on Stewart the minimum sentence permissible under the federal guidelines. Justice was done.
Much noise has been generated by fans and detractors of this case, most of it beside the point. Rabid supporters urged that the government was star searching and groused, in the now-tired refrain, that “there’s no there there”–that Stewart’s stock dumping may not technically have established the crime of securities fraud, so what’s the big deal if she lied to cover it up? Sour critics scathed her personally, as if the humbling of a self-made, accomplished, powerful woman somehow made their little lives bigger and better. All of it was hot air, obscuring or eliding truths that were very simple.
They were these: Stewart’s machinations were unquestionably worthy of a criminal investigation. Entirely independent of whether she personally was guilty of securities fraud (more on that momentarily), Sam Waksal was certainly guilty of it–indeed, he has pled guilty. No competent investigation of Waksal’s stock dumping would have overlooked Stewart’s.
Lying to police is always serious business, but particularly if one accepts the premise that Waksal’s financial fraud was worth probing, there can be no serious doubt that making false statements to the investigators should have been treated as a felony. Not the crime of the century. Perhaps not as serious as selling a thimble full of crack–for which federal law mandates five years in prison if the thimble contains as little as five grams. But a crime nevertheless.
More importantly, Stewart–a very smart woman with access to top-shelf legal help–had a choice. She did not have to speak with the agents. In the United States, a witness has the right to decline to be interviewed. If she colorably believes she may have criminal exposure, she can even refuse to testify before the grand jury unless the government gives her immunity from prosecution. That’s the power of the Fifth Amendment. The privilege, however, comes with responsibility: Since one is not obliged to speak at all, the public is entitled to insist that those who opt to speak are truthful.
False statements to agents cause the public lots of problems–problems about which there has been lots of high dudgeon in recent months. Lies result in intelligence being wrong. Intelligence is what policymakers act on–not just in national security, but in all aspects of public life. When intelligence is wrong that can lead to expensive mistakes–including innocent people being prosecuted or real criminals escaping justice. Lies also result in agents being misdirected in the middle of important investigations, which wastes scads of the public’s money. We cannot carry on about what catastrophes intelligence failure and public waste are if we treat a key ingredient of those catastrophes as much ado about nothing.
Further, even if one accepted for argument’s sake the loony premise that, unless you are personally guilty of some crime, you may lie to police with impunity, that would not help Stewart much. The fact that she was not ultimately charged with insider trading in connection with the Imclone stock she dumped does not mean she didn’t commit that offense. She either did or did not do it as a matter of objective fact. If an allegation by the government were dispositive, you’d have to conclude she did do it since the government has charged her civilly. Here, moreover, the U.S. Attorney’s decision to forebear from indicting on an equivocal securities fraud charge and focus on strong charges of subverting the legal process was laudable–underscoring that the government was not ga-ga to persecute a celebrity at all costs. None of us wants to live in a world where every crime gets charged; some are worth the effort and some not.
Under the statutes of conviction, Stewart could have been sentenced to many, many years in prison. Whether she was looking at five or fifty or more statutory years, though, an actual sentence of close to a year in confinement–which is what she got–would have been about right. Being charged with securities fraud would not have changed the evidence the jury heard, nor would being convicted or acquitted of it have materially altered the aptness of the sentence Judge Cedarbaum imposed. Serial lying plus minimal additional damage equals a ten-month sentence (including five at home). That is abundantly reasonable.
A couple of other points bear mention. One attests additionally to the overall fairness of the process. Stewart was sentenced under the U.S. sentencing guidelines, the continuing viability of which are in doubt as a result of the Supreme Court’s decision in Blakely v. Washington in late June. The guidelines have some problems that are worth taking up another day, but as relevant here their purpose is to ensure that similarly situated defendants are treated uniformly–to avoid the scandal of wildly different sentences for defendants who have committed more or less the same crimes.
The guidelines told the judge that Stewart should receive somewhere between 10 and 16 months in jail. Under their formula, Stewart’s conduct and criminal history were evaluated not based on what they’re saying on Oprah or in the tabloids, but rather on the more meaningful criterion of how first offenders throughout the United States who obstruct justice are generally treated.
Those guidelines do not punish a defendant for being rich or reward her for being 62 years old. They are a pretty reasonable measure of where Stewart stacks up against the only peers who should matter–other defendants who engage in analogous conduct. The judge looked at those guidelines and then further mitigated by imposing sentence at the very bottom of the range, even splitting those 10 months between jail and home. If you want to say Stewart was railroaded, your position suffered a severe setback from this sentence and its rationale.
The second point concerns Stewart’s legal team, which has come in for some savaging, especially for not presenting a robust defense case at trial, with Martha as the star witness. This conventional wisdom has always seemed inane, and today proved that point.
Stewart would have been a disastrous witness. As she demonstrated on the courthouse steps after Friday morning’s proceeding was over, she still has not come clean with herself. To her, the lying to federal agents and obstruction of legal proceedings was a “small, personal matter” that others had “blown out of all proportion.” It wasn’t. It was a serious crime that others valued at a little less than a year’s confinement. She turned it into a three-ring circus by choosing to spend a zillion dollars fighting it to the bitter end–on both the legal and public-relations fronts. That was, of course, her right. But let’s not pretend that the lack of proportion is everybody else’s fault. If she had simply admitted guilt, this could have been over long ago with far less fanfare.
More to the point, a person who has not come to terms with her own wrongdoing always makes an awful witness. Jurors, untrained in the law, are not there because they grasp abstruse federal securities regulations. They are there because a group of regular people is as good as anyone at sizing up who’s being straight and who’s not. Martha still hasn’t let go of the laughable story that her stock sale had nothing to do with Waksal’s. On cross-examination, the government would have taken her through every inexplicable inch of this tale.
And Stewart is not contrite. She said several times today that she was sorry, but it’s slick sorry. She’s not sorry that she did anything; she’s sorry that others blew “small, personal” things out of proportion. (Remember how we all scoffed at “Mistakes were made”?) Arrogance and self-delusion are generally not the makings of compelling testimony. She’d have left the stand as domestic diva pulp.
Why does that matter? Because of those aforementioned sentencing guidelines. They direct a judge to enhance a sentence if the defendant perjures herself at trial. In this case, that probably would have meant a sentence of between 15 and 21 months–with nearly all of it served in prison, rather than half in cushy home detention.
By keeping her off the stand, Martha Stewart’s lawyers probably gave her back about a year of her life. They won’t get much credit for it, but they probably couldn’t have served her any better.
Andrew C. McCarthy, who led the 1995 terrorism prosecution against Sheik Omar Abdel Rahman and eleven others, is an NRO contributor. McCarthy is reachable through www.benadorassociates.com.