Man Without Qualities

Friday, February 20, 2004

The Strange Case Of Reasonable Doubt v. Marthahate II

Well, yesterday it was all up for Martha Stewart. Done. All-but-convicted. Mariana Pasternak, Martha's close "friend" of twenty years - a "friend" who at the critical time had been busy consuming a considerable number of Martha's good things whilst vacationing with her in Mexico on her private jet - testified that Martha had confessed to the crime. And not just to crime with which Martha is charged (obstruction of justice) - but actual insider trading, with which she is not criminally charged. And just for good measure, Ms. Pasternak says that her "friend" incriminated Mr. Baconivic, too. Perhaps Ms. Stewart had been tippling too much in those hotel margaritas and just decided in a stray, inebriated, uncompensated moment to hand her entire life and that of her broker over to Ms. Pasternak in this fashion. Specifically:

Mariana Pasternak, who was on vacation with Stewart in Mexico in December 2001, told a hushed court that the conversation occurred when the two were seated on the terrace of a hotel discussing friends' plans for the end of the year.

She said they began to talk about Sam Waksal, one of their friends and the founder of ImClone.

Pasternak, who has been a close friend of Stewart's for more than 20 years, said she recalled Stewart saying of Waksal "that he was selling or trying to sell his stock and his daughter was selling or trying to sell her stock."

She said Stewart continued by saying, "His stock is going down, or went down, and I sold mine."

Pasternak, who testified that she had socialized with both Stewart and her stockbroker Peter Bacanovic, then quoted the trendsetter as saying, "Isn't it nice to have a broker who tells you those things?"

Pasternak said she remembered the evening because she and Stewart had been out hiking and were too tired to go down to dinner. She said the conversation occurred before the end of December 2001. Prosecutors then showed a hotel bill for a guided hike that occurred on Dec. 30.

The testimony has been described by various televised talking heads and self proclaimed trial "experts" as the most damaging evidence yet adduced against Ms. Stewart at her trial - and that might be true, depending on how it is construed.

But especially without the little gratuitous tag line "Isn't it nice to have a broker who tells you those things?" this testimony appears to be completely consistent with the Stewart version: Yes, Waksal's stock was then going down, or had gone down. Obviously, Ms. Stewart and the public knew about the stock price plunge by the time she made her statement to Ms. Pasternak (assuming any such statement was made). And, yes, Ms. Stewart had sold her stock. But Stewart says she sold pursuant to her "stop loss" order - and nothing in the Pasternak testimony says otherwise.

So what about that little gratuitous tag line? Well, Ms. Stewart's "friend" now says that she may have confabulated it:

At issue is testimony the friend offered in which she said Stewart boasted "Isn't it nice to have brokers who tell you those things" during a vacation in Mexico just after the trendsetter dumped her shares of ImClone Systems Inc. Stewart's attorney pressed the witness about that statement on Friday, asking whether that conversation had actually taken place or if it was all in her head. "I do not know if the statement was made by Martha or if it was thought in my mind," Pasternak said. She also said she previously told prosecutors that she was not sure about that recollection.

It's hard to know how a jury will take this testimony. But a sound jury would completely discount any testimony shrouded, as Ms. Pasternak's is, by protestations that it may have been invented - and go on to seriously and reasonably doubt the accuracy of all of Ms. Pasternak's testimony. And, for the record, "Isn't it nice to have brokers who tell you those things" seems more like the kind of thing someone who really isn't Ms. Stewart's "friend" would think? Doesn't it seem like a rather nasty thought about Ms. Stewart?

Yes, indeed, friends like this one are enough to make one swear off "friends" entirely in favor of paid sycophants.

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