Martha Stewart Finds It's Lonely on the Way Down

March 11, 2004 -- As the saying goes, it's lonely at the top. And as Martha Stewart is finding out, it doesn't matter whether you're on your way up or — as the case is now — down.

Never a beloved figure in her town of Westport, Conn., ("She has zero friends here," says local resident Paula Conway), the domestic diva, just weeks before her conviction on obstruction of justice, making false statements and conspiracy charges, seemed especially alone on a mid-February outing when she hit a local movie theater late on a Tuesday night.

"She looked terrible," Conway says. "She had bags under her eyes."

While her mother, Martha Kostyra, 89, and daughter, Alexis, 38, have been by her side through her ordeal, others have stopped returning her calls. "In recent weeks, she was mostly unsettled by the lack of support from people who claimed to be her friends," says R. Couri Hay, society editor of Hamptons and Gotham magazines, who has known Stewart for 20 years. "[Her famous friends] have turned their backs on her." Losing Control Not ‘A Good Thing’

Indeed, for Stewart, a former stockbroker who launched a billion-dollar homemaking empire, life these days is not such "a good thing."

Stewart has been forced to give up control of her company, Martha Stewart Living Omnimedia Inc., lost hundreds of millions as her company's stock price plunged and become fodder for late-night comedians. It's all because the 62-year-old sold nearly 4,000 shares in pal Sam Waksal's company, ImClone Systems, on Dec. 27, 2001, then lied about receiving a tip that Waksal was about to sell his shares (he knew that the FDA wasn't going to approve ImClone's cancer drug).

The move saved her about $51,000 in losses, but may have cost Stewart her freedom. "I don't really think she was driven by greed," says Christopher Byron, author of the unauthorized Stewart biography, Martha Inc.

"I think it was more in the zone of excitement — wanting to be on the inside of information. There's a certain personality that wants to be at the center of attention in whatever your little community is."

Ironically, for Stewart, since her June indictment, that has become largely a community of one. Despite owning homes in Connecticut, Manhattan, Maine and East Hampton, N.Y., the entertaining guru has never been much of a party presence.

"She wasn't terribly social," Hamptons-based author Steven Gaines tells Us of Stewart in her heyday. "She wasn't into going to glitzy events."

In fact, Stewart's isolation may have contributed to her downfall. A classic do-it-herselfer, she launched a Web site (marthatalks.com) on which she mounted her own defense; at times, she treated her legal troubles like any other business situation that she could micromanage to completion. ‘Planning to Be Exonerated’

Only a few weeks ago, during a stop at her company's offices, an employee tells Us, "Martha said things like 'next month' and 'in a few months,' and she even said, 'When my schedule clears in a few weeks, we'll go over some things' — like she was planning to be exonerated."

Even the weekend after her conviction, it was business as usual at Stewart's Westport home. "She was talking about certain plants that were going to bloom in the spring," a friend tells Us. "She made shrimp with rice for dinner one night and Chinese food on another. She also hiked and worked out."

And on March 8, while dining with female friends at New York City's Scalinatella Restaurant, she hugged a man at a nearby table who offered his sympathy. And, according to a witness, when some patrons expressed support she responded, "You gotta do what you gotta do." Martha's Mean Streak? Single since Martha's divorce in the early '90s (her husband, Andy, left her for her assistant), Stewart, with a reputation for ill-tempered perfectionism, hasn't spent as much time cultivating her relationships as developing her businesses.

In June, after her indictment, her own brother, Frank Kostyra, told The National Enquirer, "Jail will be good for her because it will humble her." Her relationship with her daughter, Alexis, has reportedly been strained for years.

Mariana Pasternak, the friend with whom Stewart went on a $17,000 vacation in Las Ventanas, Mexico, after selling her shares, testified against her in court. During the trial, prosecution witness Douglas Faneuil, assistant to Stewart's stockbroker, Peter Bacanovic (also convicted), told how Stewart berated him over the phone.

And yet, despite Stewart's reported rudeness toward relatives and underlings, her employees were shocked and tearful after the verdict. Even now, some insist she is actually quite fair, generous and often funny.

Former Martha Stewart Living producer and director Brook Altman recalls how, during one business trip to Maine, her boss asked a clerk at the McDonald's drive-through, "'What's the fish of the day?' She was just joking with him."

It's that spirit that kept her in favor with business associates like Brent Newsom, a New York caterer. "We liked working with her," he tells Us. "But are there people dancing in the streets? Probably a few."

Domestic Diva Staying Strong

While Stewart showed little emotion upon hearing the verdict, neither did she display much anxiety in the months before. Earlier this year, when spotted shopping in Westport, "she had her public face on," an eyewitness recalls. "She had her head up."

But it will take more than a stiff upper lip to turn around the fortunes of the Martha Stewart brand. Still, "she has an extremely loyal fan base," marketing consultant Richard Yaffa tells Us. "The media is focusing on this a lot more than middle America."

Meanwhile, Stewart has vowed to appeal and will likely receive some prison time at her sentencing, which is scheduled for June 17. Although each guilty count carries a maximum five-year sentence, experts expect her to get between 10 and 16 months. While deciding, Judge Miriam Goldman Cedarbaum will consider Stewart's response to the verdict.

"Part of getting a lower sentence is admitting guilt, admitting wrongdoing," explains Court TV anchor Nancy Grace. But no one is holding out for Stewart's public mea culpa.

"She doesn't have it in her to say, 'Hey, I did it and I blew it,' " one Stewart pal says.

Odds are she'll be incarcerated at a shared-cell minimum security lockdown in either Danbury, Conn., or Anderson, W.Va.

"What's going to be toughest for her to deal with are the blows to her pride and ego," says Grace.

She won't be the first star to wear stripes.

"Don't count the days, count the weeks," advises rocker and ex-con Tommy Lee. "Jail is no fun."

Adds former Mayflower Madam Sydney Biddle Barrows, who was arrested in 1984: "Inmates are nice to people with money. Because she's famous, they'll be more fascinated than anything else."

Stewart will, no doubt, turn lemons into lemonade. "She is fit, grounded and indefatigable," the pal tells Us. "Martha will take makeup with her that matches her prison garb. She will make going to prison work for her."

Reporting by Rachel Paula Abrahamson, Zoë Alexander, Eric Andersson, Lara Cohen, Marc S. Malkin, Jennifer O'Neill, Ryan Pienciak & Alyssa Shelasky in NYC; Mark Cina & Shelley Reinstein in Westport, Conn.; Jill Ishkanian in L.A.; Linda Marx in Miami