Martha Stewart: 'I Am Innocent'
Nov. 7, 2003 -- In a male-dominated business world Martha Stewart became a self-made corporate titan by being the most intimidating homemaker on Earth, but her empire has taken a tumble because the U.S. government is calling her a criminal and a liar.
Stewart, 62, will stand trial in January 2004, on charges of conspiracy, securities fraud, obstruction of justice, and making false statements. If convicted of all charges, she could face a maximum of 30 years in prison.
Stewart's legal troubles began in December 2001 when Sam Waksal, the founder of ImClone, a biotechnology company, learned that the government was about to reject the application of ImClone's promising cancer drug. Before that information became public, Waksal tried to unload millions of dollars worth of his own shares and tipped off some of his family to sell too. Those illegal stock sales set in motion an insider-trading scandal that enveloped Stewart.
Stewart's case grabbed headlines as Americans saw a parade of business executives fired, fined or jailed for financial misdeeds costing their stockholders billions of dollars. Stewart bristles at the thought of being viewed as a corporate criminal, and having her business lumped in with such companies as Enron and WorldCom. "I certainly don't belong in that category," she tells Walters in an interview airing Friday on ABCNEWS' 20/20.
The day she was indicted, she stepped down as chairman and CEO of her company. She says she felt it was the right thing to do for the business. "We're a public company," she said, "there are very strict rules of corporate governance that have to be adhered to. That I stepped down voluntarily from the position of CEO was the right thing to do at that time."
Ink-Free Fingerprinting — It's a Good Thing
A week after she was indicted in June 2003 Stewart appeared at FBI headquarters in New York, where she had her mugshot taken and was fingerprinted. It was a humiliating experience for a woman Time magazine once named one of America's 25 most influential people.
"You see those kind of things happen in the movies and television, never expecting that you're going to be mugshot, you're going to be fingerprinted," she tells Walters, adding, "It hurt. All I can say is all of this is almost incomprehensible to me."
In line with her famous — or infamous — fastidiousness, Stewart noted the electronic fingerprinting machine authorities used to take her prints. "It's a new machine. … You don't have to get that ink all over your fingers," she said.
Stewart's lawyers contend the government is making an example of her because she's a powerful woman in a man's world. "I certainly have become a well-known and visible symbol of a successful woman. That I am being persecuted, prosecuted for being such, I don't know if I could really say that, but I think that we are in a difficult time in corporate America where the business is under a great scrutiny and that something involving my personal life has become a focus of my corporate life is wrong and unfair and hurtful," she said.
Save Martha Dot-Com
It hasn't been all bad news for Martha Stewart. In the midst of the scandal, she was recently honored by her hometown of Nutley, N.J. Even some editorial writers, not necessarily her supporters in the past, have criticized the government's case against her. They join a chorus of loyal fans.
While Stewart has a fair number of detractors, there are also thousands of people who feel just the opposite. Stewart says she has received — and read and replied to — 65,000 e-mails sent to her Web site.
Stewart says she's received, "Wonderful e-mails from concerned and lovely people who write me heartfelt messages, of support, and I've read all of them. … And I thank each and every one of those people for their concern and their support."
In addition to her own Web site, her supporters have set up their own site called SaveMartha.com.
Through the site they sell a variety of Save Martha T-shirts, hats, mugs and aprons.
Separating the Brand from the Name?
Not only does Stewart need the support, so does her company. In the scandal's wake, it has taken a serious blow. Magazine ad sales and circulation have fallen and ratings of her television show are down. Stewart remains the chief creative officer but there are signs the company is beginning to separate itself from its creator.
The most recent issue of her magazine Everyday Food is the first issue that doesn't bear Stewart's name in large type on the cover. Stewart acknowledges that this is no accident. "It is a strategic business move on the part of our company," she said.
Stewart thinks her company will survive the trial and its outcome. "First of all, I don't think I'll be found guilty. I think we have a strong company, a viable company. … I think I will win this case and be proven innocent of any wrongdoing."