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June 11 2004 11:46 AM

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Today's Martha Meter reading: 80 percent

Likelihood the conviction will stand
Friday, June 11, 2004: 80 percent
The defense argues that the prosecution should have known about a witness's perjury, which would lower the hurdle for a new trial. The chance that Martha Stewart's conviction will stand drops to 80 percent.

As expected, Martha Stewart and Peter Bacanovic filed motions for a retrial based on the indictment of government witness Larry F. Stewart (no relation) for perjury. Stewart, the (former) national ink expert and head of the Secret Service's forensic lab, allegedly lied on the stand about having personally conducted ink tests on a worksheet of Bacanovic's. The alleged perjury did not concern the heart of Stewart's testimony—that the "@60" mark on the worksheet was made in a different ink than the rest of the entries—and Bacanovic was not convicted of fabricating the mark. Nevertheless, Larry Stewart's alleged perjury bolstered his credibility on the key question (if he didn't conduct the tests, how did he know they were accurate?), and for this reason and others, Martha Stewart and Peter Bacanovic are requesting new trials.

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The hurdle for a retrial based on witness perjury depends on whether the prosecution was aware of the perjury at the trial or discovered it afterwards. Specifically, according to the motions, if the defense can convince Judge Miriam Cedarbaum that the government's trial team "knew or should have known" about the false testimony, then the only remaining hurdle is to show "a reasonable likelihood that [the perjury] could have affected the judgment of the jury." If, on the other hand, the prosecution neither knew nor should have known, then the hurdle is higher: The defense has to prove that the perjury affected the verdict. For obvious reasons, the defense is eager to demonstrate that the prosecution knew or should have known about Larry Stewart's alleged lies.

The defense isn't suggesting that the assistant U.S. attorneys who tried the case—Karen Seymour, Michael Schachter, and William Burck—knew about the perjury, so the easiest way to prove that the "prosecution" knew about it is to argue that Larry Stewart was part of the prosecution. A neutral attorney said that "the prosecution" means "the trial team," but the defense cites cases suggesting that a government employee acting as an "arm" of the prosecution can be imputed to be a member of the team—and, therefore, that Stewart's knowledge of his own (alleged) perjury was prosecution knowledge.

Lest mere ink analysis (or, rather, claimed participation in ink analysis) fail to make him a member of the prosecution, the defense argued that Stewart strategized with the prosecutors before and during the trial, chaperoned the defense's ink testing efforts, and, from the back of the courtroom during the cross-examination of the defense's ink expert, passed notes forward to Assistant U.S. Attorney Burck containing suggestions on how to grill him. (The defense didn't make this argument, but it seems to me that Stewart's alleged perjury might, in and of itself, be evidence that he at least considered himself a member of the team, one of the plausible motives for his alleged lies being that he wanted to win).

If Judge Cedarbaum doesn't buy that Larry Stewart was the prosecution, she will contend with the defense's second argument—that the prosecutors "should have known" about his alleged perjury. Here, the defense has exhumed tidbits that, with twenty-twenty hindsight, appear to support the contention that the prosecutors missed "red flags" about the accuracy of Stewart's account because their behavior was "ostrich-like" (a favorite descriptor in both motions).


To wit:

  • The lab technician who actually conducted some of the ink tests that Stewart claimed to have conducted told the government that she had conducted them.

  • No records, reports, or equipment logs confirmed that Stewart conducted the tests—which they apparently would have, if he had conducted them.

  • Stewart apparently made statements to the prosecution in preparation for his trial testimony that were inconsistent with his trial testimony.

And the kicker—the "doh!" assertion that, if true, has probably triggered screams of agony within the U.S. attorney's office:

  • Larry Stewart, ostensibly the most awesomely credentialed witness in the entire Stewart/Bacanovic trial, has, for many years, been banned from testifying in Canada, apparently for overstating evidence in a case.

In the prosecution's defense, the facts above (except the last) are tangential to the key concept the ink tests revealed and the prosecution needed Stewart to convey: that the inks were different. This, however, only intensifies the irony: The lies/omissions that Martha Stewart and Peter Bacanovic were convicted of, after all, were also tangential—to the government's original theory of the case (which was that they had been tipped off about the FDA's rejection of ImClone's Erbitux application). No one is suggesting that Stewart and Bacanovic lied about this anymore (indeed, most people have forgotten that, for six months, this was the crime they were thought to have committed), but they're still probably going to jail for ancillary lies. As is, possibly, Larry Stewart.

If Judge Cedarbaum agrees with the "knew" or "should have known" arguments, the defense will still have to convince her that the perjury might have affected the verdict. Here, the argument is that, although Bacanovic was acquitted of the document fabrication charge, the idea that the $60 agreement was concocted was so central to the government's case that any evidence or testimony in support of it, proven or not, "could have affected" the verdict. Having sat through the trial, I would agree. If the hurdle is truly this low—and Judge Cedarbaum buys either of the first two conditions—the motion might have legs.

For good measure, Martha Stewart's defense team threw in another argument about why her conviction should be vacated: Martha Stewart did not have a chance to "confront" a witness against her. Since Larry Stewart did not actually conduct ink tests he claimed to have conducted, this theory goes, Martha Stewart's defense team didn't get to cross-examine the person who actually conducted them. Larry Stewart's statements, therefore—even the apparently truthful ones—should not have been admitted, and the remedy should be a new trial.

One attorney I talked to, after cackling, deemed this last argument a product of "too many late nights in the law library." Another, however, observed (as the defense did) that the Supreme Court recently emphasized the confrontation point. Co-opting recent Supreme Court arguments, he added, isn't usually the dumbest tactic around.

Henry Blodget is the founder, editor, and CEO of Business Insider. Follow him on Twitter.