The National Ink Expert Joins Martha and Peter in the Stockade
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May 24 2004 4:26 PM

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Today's Martha Meter reading: 92 percent

Likelihood the conviction will stand
Monday, May 24, 2004: 92 percent
The indictment of a government witness for perjury modestly increases the possibility that Stewart will be granted a new trial or prevail on appeal. The meter drops to 92 percent. For now, the Stewart and Bacanovic sentencing is still scheduled for June 17.

The tragicomedy that is United States v. Martha Stewart and Peter Bacanovic took another bizarre turn on Friday, when Larry Stewart, the "national ink expert" and head of the Secret Service lab that performed forensic tests on an allegedly altered worksheet, was charged with perjury. Because Stewart's alleged lies concerned not the accuracy of the tests but the scope of his participation in them (and, even less relevantly, his familiarity with a book proposal), the government and some legal experts doubt that the indictment will threaten the Martha Stewart and Peter Bacanovic convictions. Still, the arrest heaps more controversy and irony on the case, and both defense teams will surely use it as grounds for appeal.

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As described here, the cross examination of Larry (not Martha) Stewart was one of the more entertaining moments of the trial. Peter Bacanovic's attorney, Richard Strassberg, tried to dent Stewart's credibility by alluding to secrets revealed by the defense's own ink analyses, but Stewart parried this thrust by making Strassberg's methods sound like quackery. Strassberg recovered, however, and led Stewart through a line of questioning that seemed to suggest that Stewart's celebrated ink team had screwed up by failing to test a small dash on the worksheet and then claiming to have tested every "entry" on the page. Stewart insisted that he had made a conscious decision not to test the dash and that the report was accurate because the dash did not constitute an "entry," but Strassberg created the desired impression: Stewart had blown it. And now it appears that Stewart did blow it, and not just in the way that Strassberg suggested at the trial.

Larry Stewart testified that he "observed, participated [in], and reviewed," the ink tests, which were conducted "together" with a 15-year lab veteran named Susan Fortunato. When pressed about this—Larry Stewart, national ink expert and supervisor of 120 employees, took the time to perform mundane chromatography analyses?—Stewart answered in the affirmative. Describing the tests for the jury, furthermore, Stewart used the first-person: So I took a small amount of that AVEA ink and I turned it liquid again and I put it on this plate. I then did the same thing for the @60 ink. And that's the blue dot that is on the right side of the plate.

According to the government,the inspection division of the Secret Service learned recently that Stewart's testimony might have been inaccurate and launched an investigation. "Employee-1," Susan Fortunato, apparently told investigators that Larry Stewart had not, in fact, participated in the tests. "Employee-2," the supervisor who signed off on Fortunato's report, corroborated her assertion, and "Employee-3" and "Employee-4" stated that, in January, 2004, just before testifying at the trial, Stewart told colleagues that he disagreed with the phrasing of Fortunato's report (presumably, the part that said that every entry had been tested). A fifth lab employee apparently told others that Stewart said Fortunato had "fucked up" the worksheet analysis, and, lastly, an FBI agent on the trial team stated that, about 10 days ago, two months after the Stewart/Bacanovic verdicts, he or she encountered Stewart at an airport in California, where Stewart mentioned that he had been informed of the perjury allegation and was trying to think of what the basis for it might be. According to the agent, Stewart apparently further stated, in substance, that if this is related to that dash, I was covering for Employee-1.

So, there you have it. If the allegations are proven, Larry Stewart will probably join Martha Stewart and Peter Bacanovic in the federal penitentiary system, having detonated his reputation and career (and, possibly, the Stewart and Bacanovic convictions). And to what end? Perhaps to avoid a minor moment of embarrassment. Had Larry Stewart said, instead, that he hadn't participated in the tests, he probably would have had to admit that, yes, a subordinate, Susan Fortunato, had likely overlooked the dash in the first round of tests (verdict: the government isn't perfect). What he wouldn't have had to have done was retract the primary conclusions of the test: The "@60" mark and dash were made in different inks than the other marks on the page. So if the allegations in United States v. Larry F. Stewart are true, either Larry Stewart's ego got the better of him ("My lab make a mistake? Inconceivable!") or, more diabolically, he figured that, under these circumstances, the government had to be perfect.

Having watched Stewart on the witness stand, my bet would be the former (Stewart was—with the emphasis on was—at the top of his field, and his ego seemed to reflect this). Because a chorus of onlookers viewed the Martha Stewart verdict as revenge upon greedy corporate bigwigs who considered themselves above the law—a chorus that included Chappell Hartridge, the juror who the defense recently suggested (convincingly, I thought) might have some honesty issues of his own—it bears noting that Larry Stewart is not a corporate bigwig and that his alleged lies had nothing to do with money and were even less significant than Martha's (her crimes, remember, essentially amounted to not volunteering that she had received some information that might have caused her to sell some ImClone stock).

So, as we wait for the defense motions, which will likely argue that, even though Peter Bacanovic was acquitted of the document-fabrication charge, Larry Stewart's credibility helped persuade the jury to convict him and Martha Stewart on other charges (the defense might also argue that the government knew or should have known that Larry Stewart had perjured himself, thereby undermining the integrity of the entire prosecution), we can only attempt, as usual, to extract morals from this sad story—a story that, it must be said, only gets sadder as time goes on. They might include:

1. If these are the worst lies that our bigwigs—corporate and government—are telling, this country is in great shape. (Oh, that it were so.)

2. Instead of a right to avoid incriminating oneself, the Fifth Amendment should be reclassified as a right to avoid being stupid, short-sighted, and/or vain (aka human).

3. Greed is apparently not the only motive for bigwig dishonesty.

4. Pride (sometimes) does go before a fall.

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

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