Replies

From today's NYT:

STEWART'S FOLLY

There's a Reason Your Mother Told You Not to Lie

By ALEX BERENSON

Published: March 7, 2004

IN the end, the case turned out to be a slam dunk.

After months of debate about whether prosecutors made Martha Stewart a target because of her fame and after an apparently serious setback to the government's case only a few days earlier, jurors on Friday convicted Ms. Stewart of four counts of conspiracy and obstruction of justice. They had begun deliberating only two days earlier.

The quick conviction may not settle the public debate over whether Ms. Stewart was treated fairly. But defense lawyers for white-collar criminal cases say the focus on Ms. Stewart's celebrity misses the point. The real lesson of the case, they say, is that it once again proves the potency of a little-known federal law that has become a crucial weapon for prosecutors.

The law, which lawyers usually call 1001, for the section of the federal code that contains it, prohibits lying to any federal agent, even by a person who is not under oath and even by a person who has committed no other crime. Ms. Stewart's case illustrates the breadth of the law, legal experts say.

Ms. Stewart was convicted of obstruction of justice and making false statements to F.B.I. agents and investigators from the Securities and Exchange Commission who were investigating her for insider trading. (Her former broker, Peter E. Bacanovic, was convicted of four out of five counts of conspiracy and obstruction of justice.)

But Ms. Stewart was never charged with criminal insider trading, suggesting that if she had simply told investigators the truth she would not have faced criminal charges. The only counts the jury considered related to her behavior during the investigation.

"This was a classic case of the cover-up being worse than the crime," said Seth Taube, a white-collar defense lawyer at McCarter & English, a law firm in Newark. "It's an easy case to prove a lie."

That disturbs civil libertarians, who say that 1001 charges typically criminalize behavior that most people would not recognize as illegal.

"This 1001 law is really a remarkable trap," said Harvey Silverglate, a criminal defense lawyer in Boston.

People lie all the time to colleagues, friends and family, Mr. Silverglate said, and unless they are legal experts they probably do not know that lying to any federal investigator is illegal even if they are not under oath.

And F.B.I. agents and other investigators usually do not tape-record their conversations, so people can be convicted of making false statements based only on an investigator's notes, which may not exactly reflect what was said.

"Any casual conversation between a citizen and a person of the executive branch is fraught with the possibility that you can be convicted of lying," Mr. Silverglate said. If the government wants to make sure it is being told the truth, he added, it should put people under oath. "That's why we have perjury laws - because we tell people this time you're under a special formal obligation to tell the truth," he said. "And by the way, you'll notice it doesn't run in both directions, so a federal agent can lie to you, can trick you, in order to get information."

But prosecutors, and even some defense lawyers, say that 1001 charges are an essential tool that allow the government to punish witnesses or defendants who mislead investigators. Even if the prosecutors eventually decide not to bring criminal charges for the actions that initially prompted their investigation, lying should be taken seriously, Mr. Taube said.

"The fact that lying to the government can be a crime when the government doesn't charge the underlying offense doesn't bother me," he said. "You have an absolute right in this republic not to talk to the government, but it makes sense if you open your mouth that you should choose your words wisely."

Mr. Taube said Ms. Stewart's conviction offered an important lesson to anyone being interviewed by the F.B.I. or other federal agencies. "Fundamentally, if they make an appointment with you and sit down, you've got to know you're on the record," he said. "With the government, you're always on the record."