Martha Stewart: Punishing the Innocent, Excusing the Guilty
by Paul Craig Roberts
 
 

Martha Stewart has been sentenced to 5 months in prison and two years of supervised release for not telling the truth about a legal stock tip. The only thing she has been found guilty of is lying about a noncrime. 

Mrs. Stewart was neither charged with, nor found guilty of, insider trading. Neither she nor her broker had inside information that ImClone’s anti-cancer drug was turned down by federal regulators. They only knew that ImClone’s founder was selling stock. 

Savvy investors often sell when executives sell, because they see stock sales by a company’s management as signs of management’s lack of confidence in the company’s future. If the company’s founder didn’t want ImClone’s stock, Martha Stewart didn’t want it herself. She sold. 

Neither Mrs. Stewart nor her broker knew ImClone’s founder was selling on the basis of inside information. When news of an investigation came to light, Mrs. Stewart and her broker were unsure of how her sale would be interpreted by prosecutors. The Securities and Exchange Commission has refused to define "insider trading" on the grounds that a vague offense surrounded by uncertainty makes it easier to convict defendants who are accused. 

Faced with the possibility of being accused of a vague and undefined crime, Mrs. Stewart and her broker stated that they had an agreement to sell when an agreed price was reached. The statement was not made under oath and if false does not constitute perjury. 

Prosecutors claim the statement was a stratagem to cover up a stock tip, the legality of which was unclear to Stewart and her broker, and constituted a false statement that "obstructed" the investigation. Thus, even though prosecutors uncovered no evidence that Mrs. Stewart had committed a crime, they indicted her for "obstructing justice" by not telling them what they say is the truth about the stock sale – even though what the prosecutors say is the truth about the sale does not constitute a crime. 

No one knows whether Martha Stewart and her broker told the truth or not, but jurors naïvely believed the prosecutors. No one – not jury, judge, nor prosecutor – had enough sense or decency to know that it made no difference one way or the other. No one can be guilty of covering up a noncrime. 

Meanwhile the Senate Select Committee on Intelligence has released its report, which states that the information used by President Bush, Vice President Cheney, Defense Secretary Rumsfeld, and Secretary of State Powell to justify the invasion of Iraq was incorrect. Everything Powell told the UN and Bush told the American people was wrong. A war with tens of thousands of casualties was started, if not on the basis of massive outright lies, on the basis of massive orchestrated misinformation. 

The deception was so successful that 45% of Americans purport to still believe that Saddam Hussein had weapons of mass destruction and links to Osama bin Laden. 

The senators say the invasion was unjustified, but no person is to blame – only "the process." The intelligence information was not correctly collected, analyzed, processed, or reported. Thus, everything got fuddled up and our incompetent government confused myth with reality. 

The buck stops nowhere. No one is to be held accountable for a disastrous blunder that has destroyed tens of thousands of people and a half century of US foreign policy, wasted $200 billion dollars, and made Americans unsafe for decades to come. 

If we apply the "process is guilty" standard to Mrs. Stewart that is applied to our government leaders, even if she told a lie the fault lies in the vagueness of the insider trading offense. Not knowing what the offense is, people try to defend against being accused of it. Mrs. Stewart is not guilty. The process of the law is guilty for not defining the offense known as insider trading. Judges and jurors are guilty for allowing prosecutors to use vague laws and regulations to indict people. 

Meanwhile, the Bush administration refuses to allow contracts that it handed out to cronies to be audited, while imprisoning corporate executives for far less accounting sins. 

Meanwhile, the Bush administration has ordered Japan to detain and extradite former world chess champion Bobby Fischer for playing in a 1992 chess match in Yugoslavia. By playing a chess match, the US government claims that Mr. Fischer violated UN sanctions against Yugoslavia, a country charged with provoking warfare because it tried to prevent secession just as Abe Lincoln did. 

Are the American people going to reelect a government that prosecutes citizens for noncrimes while excusing itself of war crimes?

July 17, 2004

Dr. Roberts [send him mail] is John M. Olin Fellow at the Institute for Political Economy and Research Fellow at the Independent Institute. He is a former associate editor of the Wall Street Journal and a former assistant secretary of the U.S. Treasury. He is the co-author of The Tyranny of Good Intentions. 

Copyright © 2004 Creators Syndicate

 http://www.buffalonews.com/editorial/20040719/1024892.asp

Wealthy get help dealing with prison 
By BEN WHITE and CARRIE JOHNSON 
Washington Post
7/19/2004 
 

Martha Stewart is coached about incarceration.
 

WASHINGTON - Before reporting to prison, every smart white-
collar criminal knows what to do: Hire a consultant. 
So many details must be worked out - being sent to the cushiest possible jail, handing over control of personal finances, coping with the psychic shock sure to set in when the cell door bangs shut. 

Martha Stewart, sentenced on Friday to five months in prison for lying to federal agents about a stock sale, has Herbert J. Hoelter, one of the best-known prison consultants. 

Hoelter, who has helped such people as financier Michael Milken and Sotheby's Chairman A. Alfred Taubman adjust to prison life, said in an interview that the biggest challenge often is making formerly powerful clients understand that U.S. Bureau of Prisons rules do not allow them to conduct business from prison and that their contact with the outside world will be severely restricted. 

The message does not always get through. 

Hoelter said a client in California recently was placed in solitary confinement after guards caught him trying to sign some closing papers that he had been sent for a real estate sale. Another lawyer said one of his Wall Street clients demanded to know what his e-mail address would be in jail. Inmates cannot use e-mail. 

"The transition from being outside to being an inmate is a dramatic one," said Hoelter, who runs the National Center on Institutions and Alternatives in Baltimore. 

Stewart already has taken care of a major real estate deal, selling a luxury apartment in Manhattan. Over the past few weeks, she also has sold several million dollars worth of stock in Martha Stewart Living Omnimedia, the company she founded. But as other white-collar criminals have found, other matters also must be considered. 

In 2002, weeks before he was set to report to a federal prison camp in Florida to serve a 41-month sentence for fraud, shoe designer Steve Madden decided to take care of a few painful loose ends: his teeth. 

Beyond personal and financial matters, consultants and lawyers strongly recommend that prison-bound former executives prepare themselves psychologically. 

Sentencing consultant David Novak, who served a year in prison on a mail-fraud charge, said that applies to Stewart despite her tough talk Friday outside the courthouse about not being afraid. "Of course she's afraid," he said. "Any human being would be." 

Veteran Washington defense lawyer Henry W. Asbill said the attitude adjustment can be very difficult for those accustomed to giving orders, not taking them. 

"You want to be showing up there primed to not be a problem, to not be unusual, to not think you are still in control," Asbill said. 

Stewart will have plenty of time to prepare. 

U.S. District Judge Miriam Goldman Cedarbaum granted a stay of Stewart's sentence while an appeal proceeds, which could take more than a year. If and when Stewart does go to prison, Cedarbaum recommended that she be sent to Danbury Federal Correction Institute in Connecticut, a women's prison that has a minimum-security camp. 

Inmates at such facilities do not have access to e-mail or computer modems, their regular mail is closely monitored, and they are limited to 300 minutes a month in phone calls, according to Dan Dunne, a spokesman for the Bureau of Prisons, the federal agency that determines where convicts serve their time. Visitors are limited to those on an approved list. 

Prisoners in the federal system must work 71/2 hours a day unless they have medical excuses, and they are paid less than $1 an hour. The jobs are typically in the food service, grounds crew or sanitation areas. Inmates wear khaki outfits with steel-toed black shoes during work hours. Sweat suits are allowed during non-working hours. 

This story is taken from Opinions at sacbee.com.

 http://www.sacbee.com/24hour/opinions/story/2201662p-10316981c.html 

DALE McFEATTERS: Martha on parole

Scripps Howard News Service
Published 1:15 pm PST Friday, March 4, 2005

(SH) - America's most famous felon, Martha Stewart, has a lot ahead of her now that she's out of jail - getting her company back into the black, launching two TV shows and re-establishing herself as the credible voice of domestic perfection.
Her five months in a minimum-security women's prison - dubbed by some "Camp Cupcake" - was hardly "The Shawshank Redemption," but during that time she became a convert to the cause of prison and sentencing reform.

That's according to Laurie Cohen of The Wall Street Journal, who corresponded with Stewart during her time in prison.

Stewart objected to cutbacks in the quality and quantity of food for budgetary reasons; the indifferent medical care; the lack of educational opportunities; and the harshness of federal sentencing guidelines, especially for first-time, nonviolent offenders.

These are all worthwhile reforms, but improving prison conditions and the chances of rehabilitation don't engender a lot of public sympathy or legislative support. A high-profile spokeswoman like Martha Stewart could change that.

The timing is unusually opportune because in January the Supreme Court overturned the current system of mandatory sentencing guidelines. It presents a chance to weed out unnecessarily harsh sentences.

However, Cohen reports, Stewart's image advisers are urging that she forget prison advocacy because it will only remind the buying public that she's a convicted felon. And she naturally might want to put her prison experience behind her.

But out of her personal calamity has come an opportunity to do some real good. Let's hope she ignores her advisers.