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Martha: She Made the Mistake of Being a Self-Made Billionaire
Ludwig von Mises Institute ^ | Posted March 6, 2004 | William L. Anderson and Candice E. Jackson

Posted on 03/09/2004 10:50:23 AM PST by g_f_axelsen

The Martha verdict appears quite popular with the political classes and the vaunted "man on the street," not to mention the nation's mainstream journalists.  The post-trial comments of one juror, Chappell Hartridge (Juror Number Eight), say it all: "Maybe this is a victory for the little guys who lose money thanks to these kinds of transactions. Maybe it's a message to the big wigs."

Remember that this was not a trial about "insider trading."  The judge said so, the prosecutors said so, the pundits said so.  Even the New York Times declared that it was not an "insider trading" charge.  Crowed the Gray Lady's March 6 lead editorial:

Absent a straightforward insider-trading charge, the jury was left to determine that there had been an illegal cover-up — and on that, the evidence was compelling — without defining the underlying impropriety. Still, the narrative that emerged at the trial justified the government's determination.

Juror Number Eight even admitted as such, answering a reporter's question with: "Well, as I understood it we weren't supposed to consider insider trading."  So there we have it; it was a trial about "cover-ups" and changed stories and a conspiracy to tell the government investigators something that the government did not want to hear.

Yet, in reality, it was a trial about "insider trading."  If we dig even deeper, we find that underlying the entire event was the theme that Stewart's station in life somehow was illegitimate, or at least she had no right to the alleged position of privilege that her money brings her.  Should Juror Number Eight's words, as well as those of the editorial board of the New York Times mean anything, Martha Stewart ultimately was convicted of being "wealthy beyond a reasonable doubt."

Consider the following statement in the Times' editorial: "The trial depicted a cozy world where insiders routinely use their wealth and connections to benefit from insider information."  Having followed the trial in some detail, I cannot recall such a scenario.  In the aftermath (and even before the trial began), people were aware that ImClone CEO Sam Waksal sold his stock upon learning that the Food and Drug Administration had given a thumbs down on its drug Erbitux (a decision that the FDA later reversed, yet another sordid episode to this story of government overreaching).

According to the government's charges, Stewart's stockbroker, Peter Bacanovic, was also Waksal's broker, and he got a message to Stewart that his client was dumping his ImClone stock and that she should do the same.  As James Ostrowski has pointed out, that is not insider trading.  If Baconovic tipped off Stewart to Waksal's actions – as the jury apparently believed – at worst he was guilty of violating Merrill Lynch's policies of confidentiality and he deserved whatever punishment his employer would mete upon him.

Furthermore, according to the record, Stewart unsuccessfully tried to reach Waksal herself, another example of what the Times calls the "cozy world."  So, according to the Gray Lady's editorial board, if well-known corporate CEOs talk to one another (or at least have the phone numbers to the executive suites), that constitutes an "unfair advantage" that permits such people "to benefit from insider information," a state of affairs that meets with the Times' sternest disapproval.

However, let us put the shoe on a different foot.  One of us worked as a newspaper journalist and at times had direct contact with reporters from the New York Times.  Indeed, as those on the "outside" soon discovered, there was a "cozy relationship" between people in political power and journalists from the Times, Washington Post, and the national network news outlets like ABC and CBS.  Such relationships permitted reporters from those news organizations to gain access to people who would not give the time of day to the rest of us.

No doubt, such access to newsmakers gives journalists from the Times and other elite organizations a real advantage, not only in gaining prestige but also wealth.  In other words, according to the editors of the Times, there is nothing wrong with journalists from the Times having access to top people – often at the expense of the "little guys" slugging it out at smaller newspapers – but it is immoral for Martha Stewart to have access to the offices of a Sam Waksal.  To put it another way, it depends upon the "cozy world" of which one speaks.

According to our vaunted "Juror Number Eight," Stewart and her co-defendant were "arrogant."  He cited their not appearing on the witness stand somehow as proof of their arrogance – for which conviction apparently was a remedy.  His statements to the press express that sense of entitlement: "It bothered me that they only put one witness on the stand. It's like they were saying, 'I don't need to defend myself. I don't need to persuade the jury. We know we'll get off.'"

Moreover, Stewart's privileges as a CEO further stoked his fire.  Consider this exchange between Mr. Number Eight and Andrea Peyser of the New York Post, a reporter who wrote shrill anti-Stewart screeds, and whose editors obviously wanted Stewart "taken down a notch".  (The following comes from Elizabeth Koch's dispatch in Reason Magazine's website, March 5.)

(Hartridge)  It was kind of…"

"Arrogant?" Andrea Peyser asks hopefully.

(Hartridge)  "Yeah," he says. "Judging by some of the things they did, I'd say they thought they were special. I wasn't comfortable with the tone of [Peter Bacanovic's taped SEC testimony]. He sounded kind of…"

"Arrogant?" Andrea asks, nodding emphatically. "What about the fact that Martha charges her vacations to the company? Did that play into your decision?" What, Andrea, do you want him to admit the conviction was motivated less by evidence than character assassination and vengeance?  (Koch's comments)

"Yeah. She takes vacations and doesn't pay for them—it's like she thinks she's better than everyone else. But, I mean...the vacations didn't factor into our decision."

         "What are you thinking of in terms of insider trading?" someone asks.

"Well, as I understood it we weren't supposed to consider insider trading. But as far as not talking to the authorities and not cooperating, yes, she sounded like she thought she was better than everyone else."

These words speak to the duplicity of the government's case against Stewart – and the dishonesty of the jurors, judge, and prosecutors alike.  Keep in mind that Martha Stewart now faces a lengthy stay in prison because jurors decided that the original activity – the alleged "insider trading" that never occurred – was a "bad act" that triggered their viewpoints about everything else that happened afterward.  Moreover, the jurors apparently remained convinced that Stewart had engaged in the "crime" of "insider trading," or at least something similar, since they believed she was trying to cover up something illegal.  They could not have reached their decision otherwise, as it would have been a logical absurdity.

To make matters worse, even before Stewart was able to unload her ImClone stock, numerous other nameless investors – many who most likely fell into the "little guy" category – already had sold their ImClone shares.  Stewart's actions impoverished no one, nor did she gain an "illegal" or even "unfair" advantage.  By the time she acted, the market already had spoken.

In one of its news dispatches following the trial, CNN declared that the Stewart case was part of the government's "crackdown on corporate corruption."  This is ridiculous.  Stewart was not a "corrupt" executive, nor did she break the law when she sold her shares of the temporarily doomed ImClone stock.

No, Stewart apparently committed the "crime" of being wealthy and well-connected.  Furthermore, she sometimes was short and impatient with people, which is a trait that one of us in his brief career as a news reporter found to be endemic in people who were associated with the New York Times and other "elite" news outlets. 

Had she instead been a journalist or a politician, she would have had a chorus of supporters among the political classes.  Instead, she made the mistake of being a self-made billionaire, and now the journalists and the political classes are making sure that she is railroaded into a prison cell.


TOPICS: Culture/Society
KEYWORDS: ahole; anticapitalist; heretodaygonetoday; looser; marthastewart; moby; mobydick; mobytroll; strikeupthebanned; thisaccountisbanned; vikingkitties; vkpac; zot
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She made the mistake of being a self-made billionaire, and now the journalists and the political classes are making sure that she is railroaded into a prison cell.
1 posted on 03/09/2004 10:50:23 AM PST by g_f_axelsen
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To: g_f_axelsen
She made the mistake of being a self-made billionaire, and now the journalists and the political classes are making sure that she is railroaded into a prison cell.

She laid the tracks to the prison cell with her lies.


Show 'em my motto!

2 posted on 03/09/2004 10:51:49 AM PST by rdb3 (The Servant of Jehovah is the Christ of Calvary and of the empty tomb. <><)
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To: g_f_axelsen

3 posted on 03/09/2004 10:52:01 AM PST by billorites (freepo ergo sum)
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To: g_f_axelsen
She should have stuck with cattle futures...oh, wait, that was somebody else...
4 posted on 03/09/2004 10:53:28 AM PST by Spok
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To: rdb3
"She laid the tracks to the prison cell with her lies."

When will those tracks make their way through DC?
5 posted on 03/09/2004 10:53:35 AM PST by Stew Padasso (There is rampant corruption and downright theft going on with government on a daily basis, yuet)
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To: Stew Padasso
When will those tracks make their way through DC?

That's outside the purview of her case and you know it.


Show 'em my motto!

6 posted on 03/09/2004 10:55:09 AM PST by rdb3 (The Servant of Jehovah is the Christ of Calvary and of the empty tomb. <><)
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To: g_f_axelsen
Martha Stewart made the mistake of behaving like a good old fashion aristocrat, who thought she could get away with anything. I don't see how being a self-made person got her into the mess she is in. In fact I don't think the nature of how she rose to the top has anything remotely to do with her problems. Although it might sound like a nice romantic self-made person gets hosed by the establishment story, it is hardly reality.
7 posted on 03/09/2004 10:58:05 AM PST by miloklancy (The biggest problem with the Democrats is that they are in office.)
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To: g_f_axelsen
"She made the mistake of being a self-made billionaire..."

No, she made the mistake of breaking the law...MUD

8 posted on 03/09/2004 11:00:48 AM PST by Mudboy Slim (RE-IMPEACH Osama bil Clinton!!)
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To: billorites
What a prophetic cover for this case. If Martha Stewart ever gets locked up, she will come to grievous bodily harm or worse. The "little people" in prison will give her special attention o show her that she is not better than them.
9 posted on 03/09/2004 11:00:53 AM PST by Truth29
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To: rdb3
She was convicted to keep the truth that politicians, board of directors, stock board members all use insider trading, but don't want the public to know, nor how much 'better' of a profit ratio those people make off their investments, as then they would lose the suckers that invest with no inside knowledge, as they are what makes it possible for the 'insiders' to make such huge profits.

They 'knew' this case could lead to the center of their spider den, and they didn't want that.

So, sacrifice the lamb.
10 posted on 03/09/2004 11:02:25 AM PST by UCANSEE2 (The LINE has been drawn. While the narrow minded see a line, the rest see a circle.)
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To: rdb3
All for a measly $50k. I hate pettiness.
11 posted on 03/09/2004 11:03:39 AM PST by BrooklynGOP (www.logicandsanity.com)
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To: UCANSEE2
She was convicted to keep the truth that politicians, board of directors, stock board members all use insider trading ...

Oh - so now she's gonna keep her mouth shut?

Sorry, but your statement would seem to defy logic ...

12 posted on 03/09/2004 11:05:56 AM PST by _Jim ( <--- Ann C. and Rush L. speak on gutless Liberals (RealAudio files))
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To: g_f_axelsen
Welcome
13 posted on 03/09/2004 11:10:12 AM PST by HEY4QDEMS (Always remember to consider the facetiously challenged and use your /sarcasm tag.)
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To: g_f_axelsen
Class envy is a nasty thing, and does no one any kind of good.

14 posted on 03/09/2004 11:10:22 AM PST by Agnes Heep
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To: rdb3
Oh please Bill Gates is a self made billionaire. There are plenty of self made millionaires and billionaires who don't do what Martha did. She lied, and lied for a paltry $50,000 compared to BILLIONS she had already. I felt sorry for her at first but the longer people talk about this the less sorry I feel for her.
15 posted on 03/09/2004 11:12:55 AM PST by cyborg (In die begin het God die hemel en die aarde geskape.)
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To: g_f_axelsen
She made the mistake of turning her company public. By doing so, all her actions came under heavier scrutiny. If she stayed private and sold the imClone stock even with insider knowledge, Feds couldn't touch her.
16 posted on 03/09/2004 11:13:36 AM PST by MrsEmmaPeel
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To: g_f_axelsen
What a load of BS, and the same goes for Rush's similar ridiculous moaning today.

This is primarily all about the powerful and connected obeying the same law as anyone else, not class envy. If so many of the rich, famous, and powerfully connected were not routinely succeeding in their high price lawyers getting them off for what most people would go to jail for, the reaction would have been far more muted. Its no different than the reaction when OJ got hit with the civil judgement after walking on the murder case.
17 posted on 03/09/2004 11:14:22 AM PST by Diddle E. Squat ("I'm Diddle E. Squat, and I approved this tagline")
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To: g_f_axelsen
The laws under which she was convicted are bad laws and should be repealed, but they are the laws now.

The primary reason Martha was prosecuted is because the SEC cannot afford to have the example of a member of the board of directors of the NYSE getting a pass for any infraction.

The people who have responsibility for running the nations markets must be above reproach or eventually people will lose faith in the whole arangement.

So9

18 posted on 03/09/2004 11:14:30 AM PST by Servant of the 9 (Goldwater Republican)
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To: g_f_axelsen
g_f_axelsen
Since Mar 9, 2004

Welcome.

She made the mistake of lying, repeatedly, about a federal crime. She also, based on her position as a broker and as a board member, knew better. She knew the rules, and didn't follow them. She was given ample chance to ammend her statements, and then she was given several chances to plead out. This is no ones fault but Martha's. Sometimes people have to stand up and accept accountability for their actions. I, for one, am tired of people making excuses for celebrities they admire.
19 posted on 03/09/2004 11:26:16 AM PST by BlueNgold (Feed the Tree .....)
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To: Servant of the 9
The fact that Martha is a big CEO and NYSE icon rightfully makes her a bigger target than the average guy.

But where Martha Stewart really went wrong was when she lied and conspired against the feds. Lie to them, and they take it personally. Federal prosecutors always roll hard on someone that they can prove is lying to them.

If Martha Stewart was not a celebrity, but just another well-connected CEO, the exact same thing would have happened...But we wouldn't hear people crying about it.

The defenders of Martha are star struck and aghast that a celbrity could go to jail over something as trivial as lying to federal prosecutors and conspiring to obstruct their inevestigation.

But None of Martha's defenders would be crying about a well-connected non-celebrity male who was sent to the pen under identical circumstances.
20 posted on 03/09/2004 11:26:32 AM PST by Chameleon
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