Stewart faces crucial decision
By Brooke A. Masters
Washington Post
NEW YORK — Prosecutors rested their case against Martha Stewart yesterday, leaving her to spend the weekend pondering the most important decision she faces in her trial: whether to take the stand in her defense against charges of conspiracy and making false statements.
Associated Press
The potential rewards for Stewart, 62, and her co-defendant and former broker Peter Bacanovic, 41, are high, but so are the risks, lawyers unconnected to the case said.
Martha Stewart arrived in court yesterday for a session in which she heard the prosecution rest its case. She must decide this weekend whether it would be better or worse for her to testify in her own behalf next week.
Testifying would allow either or both of the defendants to tell the jury what they thought and did on Dec. 27, 2001, when Stewart unloaded her shares in ImClone Systems Inc. a day before that company announced bad news about its top cancer drug. They might also be able to convince the jury of the truth of their assertion that they had an agreement to sell the stock if it dropped to $60, as it did that day. Prosecutors say that claim is a lie and have made it the centerpiece of their case.
"If there is an interpretation of the facts, a clarification of the story that only they can tell, then you have to take that risk," said Georgetown University law professor Donald Langevoort.
The media-savvy Stewart may also think her public expects her to take the stand. Heeding that urge, however, would expose her to prosecutors' questions and the possibility of a public meltdown. And that could be fatal to her case, lawyers said.
"Cross-examination is not appearing in front of a board of directors. ... The questions are going to be tough. If there's even a flash of arrogance or anger, it will be devastating to her," said Alan Lieberman, a former federal prosecutor.
The defendants' decisions about taking the stand may be influenced by recent developments in the trial, including testimony yesterday from two friends of broker's assistant Douglas Faneuil backing up his testimony that he was told by Bacanovic, in violation of Merrill Lynch & Co. confidentiality policies, to tip Stewart that ImClone founder Samuel Waksal was dumping his shares.
Faneuil's college friend Zeva Bellel told the jury that Faneuil told her just days after the sale about tipping Stewart on Bacanovic's instructions. She also said Faneuil told her he had asked Bacanovic what he should tell federal investigators who were asking about the transaction. According to the freelance journalist, Faneuil said his boss had replied: "Listen, nothing happened. There was nothing wrong with this sale. This was how it happened."
But that answer left Faneuil "at a loss," Bellel said. "He felt abandoned and betrayed. The sequence Peter had just described was totally inaccurate."
The testimony from Faneuil's friends "will increase the pressure significantly" for Stewart or Bacanovic to testify, said Charna Sherman, a Chicago-based defense attorney, because those witnesses "shoot a big hole in what appears to be the defense's principal defense so far" — to try to discredit witnesses like Faneuil.
