Martha Stewart, media victim
Media imagination ran riot from the day she was sentenced. What escaped the media in its frenzy was the issue of proportionality.
Dasu Krishnamoorty
Martha Stewart, owner of a lifestyle empire which has made her a household name in the United States, went to jail last week for what many legal experts think is a borderline offence?lying to investigators about the sale of ImClone Systems stock in 2001. The first to laugh at Martha¿s fall were the media who were also the first to install her on a pedestal. It is unfortunate that her case came in the wake of a hostile regulatory atmosphere that followed the Enron scandal and the WorldCom collapse. In punishing her, both media and the state converged with uninhibited glee. Martha became a household word because of the nature of the goods and services she sold. She is a media star and 62-year-old billionaire businesswoman who built hearth and home into a financial empire on Wall Street, considered the monopoly of successful and aggressive males. She is now a victim of her own success, her own celebrity and her own image.
But Martha is a woman of great courage and nonchalance, qualities that make a male-dominated world uneasy. She sold a ridiculously small number of her company Martha Omnimedia¿s shares in ImClone, a biopharma firm, the day before they crashed. This won her a harsh jail term because, many people believe, she is a woman and she is rich. Prosecutors wanted to make an example of her for refusing to play the traditional gender role her own marketing implied. The moment this technical mistake hit the radars of media, they went to town tom-toming the news with savage fury. ?Martha Stewart Living has become Martha Stewart Dying,? said MediaChannel.Org.
Overzealous prosecutors
Martha bore the brunt of a two-pronged attack: the state and the media. What escaped the mainline media in their preoccupation with sensation is the issue of proportionality. Martha is suffering not for what she did but for what she is. Respectable culprits are roaming free. For example, Bush¿s friend Kenneth Kay of Enron sold $ 80m. of his stock even as he told others to buy. When he was its CEO, Vice President Dick Cheney boosted on paper the profits of Halliburton by $ 120m. and sold his stock in 2000 making $ 18m. He faces only a civil suit.
In the eyes of Frances McMorris, commentator for WeNews, Martha is the victim of an overzealous prosecution team out to put rather a large collective feather in its cap. Martha was charged with conspiracy, obstruction of justice, making false statements, tampering with evidence and securities fraud. According to McMorris, all these are charges in connection with the sale of her firm¿s shares in ImClone. The biopharma company¿s chief executive Sam Waksal came to know before official announcement that the Federal Drugs Authority had failed to clear a drug the company wanted to make. Waksal asked Douglas Fanueil, an assistant of Peter Becanovic, a broker common to Martha and Waksal, to sell his shares valued at more than $ 7 million. Fanueil, who became government¿s star witness, sent this message to Martha: ?Peter thinks ImClone is going to start trading downward.?
McMorris says this by no means is insider trading. Of course, Martha has not even been charged with insider trading. Even before all this, Martha asked Becanovic to sell her company¿s shares if their value slumped to $60 mark. The prosecutors contended that there was never such an agreement and that the pact was ¿concocted¿ to cover up the insider trading. The pact was an afterthought. Martha was charged, therefore, not for insider trading but with covering up the conduct of ImClone shares.
Has there been a securities fraud? Martha¿s lawyer Robert Morvillo says that it is the most bizarre charge in the case. He told the jury that Martha had no motive to lie to investigators. His client was the victim of overzealous prosecutors who assumed that Stewart lied when she said she had planned to sell the shares all along. But prosecutors ignored this aspect and stuck tenaciously to the fact of her friendship with Waksal. The government alleged that when Ms. Stewart went on television and was quoted in the newspapers as saying she was innocent of all charges, she was committing fraud with the intent to pump up the stock price of Martha Stewart Omnimedia. ?Excuse me? You`ve got to be kidding me. You`re charged with a crime, and when you assert your innocence, that somehow amounts to stock manipulation, fraud and conspiracy? Top legal experts around the country have admitted puzzlement at that bizarre interpretation of the law,? says Caitlyn Rhodes writing for the Media Cynic.
According to Warren Dennis and Bruce Boyden of the Washington Legal Foundation, ?Rather, Stewart merely responded to allegations in the press in June 2002 that she had engaged in insider trading in ImClone stock. Stewart buttressed her denials with modest factual claims that she had a pre-existing agreement with her broker; that she did not have any inside information about ImClone and, that she had co-operated with the investigators. In short, Stewart stands accused of fraud for defending herself against allegations against securities fraud. Notably, the stock that is accused of manipulating isn¿t even the stock she sold, supposedly on the basis of ?inside? information, but the stock of her own Martha Stewart Living Omnimedia. This theory that Stewart committed a crime by publicly proclaiming her innocence surprised many. Prosecutors claimed that her statements were intended to keep the stock of her own company artificially high by misleading investors. The case against Martha is one of very technical readings of federal criminal law.
Media Coverage
Now, the media attack. Media imagination ran riot from the day she was sentenced. The New York Times led other newspapers in carrying a report picturising the hell she will have to inhabit for five months of her jail term, the clothes she has to wear, the company she has to keep, and the humiliation and loss of control she has to suffer. CNEWS reveled in describing the conditions of living in the jail as, ?They sleep in bunk beds in one of nine large dormitory-style rooms that house between 26 and 90 inmates per room. There are no individual cells. Lights out is about 8.45 p.m. on week days, later on weekends, said Dunne, a federal prisons spokesman.? Martha, however, refused to succumb to self-pity and immediately chose to do the jail term even as the appeals process moves forward.
William Anderson, who teaches at the Frostberg State University, says, ?The first warning that the mainstream media was not going to be a constructive entity was the frenzied coverage of Stewart¿s arrival at the federal courthouse in Manhattan. According to the news accounts I have read, the most important thing was ? the color of her umbrella. Yes, here was a very successful businesswoman literally fighting for her freedom against what can only be described as questionable charges and the journalists were fixated on the fact that she was using an umbrella that matched the color of her clothes. The coverage of the hearing itself revealed more press fixation with this ?Miss Perfect? theme, that being Stewart¿s demeanor and the tone of her voice when declaring herself ?not guilty.? Journalists also have failed to look behind the ?obstruction of justice? charges. From the New York Times to the Washington Post to USA Today, the coverage of the Stewart case could have been written by U.S. Department of Justice employees themselves.?
The New York Post announced the start of the countdown to jail by devoting a whole page of color pictures and story with the headings: 4 DAYS ¿TIL JAIL: Martha¿s Agony. The story opens with this taunt: ?With her final moments of freedom ticking away, Martha Stewart looked downright downtrodden yesterday as she made her last splash in the Bahamian surf.? Follow dismal phrases like ?her days of privilege were numbered,? ?it was her last Sunday without restraints,? ?appearing as if she were a broken woman,? ?Stewart has even reviewed typical prison diets.? Then comes the scare scenario, ?Some of the female prisoners at Alderson are muttering they may cause ?problems? if Stewart is given special treatment.? The sources for this report are ?said one man,? ?said another man? and ?according to men whose wives are incarcerated there.? Most media coverage has been ruthlessly (and surprisingly so, given the sycophantic vigour with which each celebrity movement is treated in the news these days) unsympathetic, wrote Ben Rayner in Toronto Star.
But Martha adroitly eluded the media on the day she reported at the Alderson prison in West Virginia by leaving the following message on her website marthatalks.com: ?By the time you read this, I will have reported to a minimum security prison in Alderson, W.Va., to begin serving my five-month sentence.? However, both Fox and CNN showed her entering with great poise the prison where Alderson officials received her with a degree of deference denied generally to others. How was the first day in prison? The Daily News reported, ?Martha Stewart took prison life in her stride yesterday, taking a solo walk round the grounds of her new home and receiving two visitors. It almost looked like she could have been out for a leisurely walk at her sprawling upstate Bedford estate.? The paper covered the entire front page with a color picture of Martha taking a walk on the lawns of the Alderson campus.
Nobody argues that Martha has not made a mistake. But there is little doubt that her own status, the media coverage and the society¿s distrust of Wall Street trading combined to target her.
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