Henry Blodget, a former securities analyst, lives in New York City. Read his full-disclosure statement about his potential conflicts of interest in covering the Martha Stewart trial here. For a complete listing of Blodget's dispatches, see Slate's Guide to the Martha Stewart Trial, which also has links to related Slate articles.

Covering up old wallpaper was never so problematicOn Feb. 14, Valentine's Day, Merrill Lynch handed over a batch of documents to the SEC, including the allegedly altered worksheet. Three weeks later, on Mar. 7, Douglas Faneuil was again interviewed by SEC attorneys, and, again, he allegedly didn't "truthfully reveal all he knew." Six months later, when Faneuil changed his story, perhaps in exchange for a lesser charge (a misdemeanor, despite having allegedly lied and/or withheld information twice), he would say that he was unaware of any $60 agreement (he reportedly didn't say such an agreement didn't exist—just that he was unaware of it; because he was reportedly on vacation when Bacanovic and Stewart arrived at the agreement, it is not clear why his being unaware of it would reduce the likelihood that it existed). Faneuil would also say that, sometime in January, Bacanovic had encouraged him to "refrain from disclosing" that Stewart had been informed about the Waksal sales. Third, he would say that, in exchange for keeping his mouth shut, Bacanovic had offered to arrange an extra week of vacation for him and to pay for his plane ticket. (In Faneuil's indictment, it is not alleged that he actually received these bribes; it is instead alleged that Bacanovic "continued to pay" Faneuil an incentive bonus based on Bacanovic's commissions, the same way Bacanovic had always paid him; it is not explained why Bacanovic's continuing to pay him the way he always had would make this hush money.)

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On April 10, 2002, Martha Stewart had her second, and final, interview with the SEC, FBI, and U.S. attorney, this time by telephone. As in the first interview, Stewart was not placed under oath, and no formal record or transcript was made. In this interview, Stewart allegedly made the following false statements (Count 4: "False Statements By Martha Stewart"):

1. She did not recall whether she and Bacanovic discussed Sam Waksal on Dec. 27, nor did she recall being told (by Bacanovic, according to the FBI agent's notes) that any of the Waksals were selling stock.
   
2. Sometime in November or December, she and Bacanovic decided that she would sell if ImClone went to $60.
   
3. On Dec. 27, at approximately 1:30, she spoke to Bacanovic who told her that ImClone was trading below $60 and recommended she sell.

The first statement is, again, of the "do not recall" species (and it would have been really hard for Stewart to recall discussing Waksal or the Waksal sales with Bacanovic on Dec. 27, seeing as how she apparently didn't speak to him). In Stewart's motion to dismiss, in fact, Stewart's attorneys argued that this specification should be stricken from the indictment on the grounds that, according to the government's theory (she spoke to Faneuil), it was literally true. Judge Miriam Cedarbaum denied the motion. The two other statements are consistent with the statements Stewart made in her first interview. They are also consistent with Bacanovic's version of events, with the exception of the assertion that she spoke directly to him on the 27^th (which, again, in my mind, suggests that the two weren't conspiring—or, at least, had long since stopped).

Thus endeth the alleged private cover-up and obstruction of justice portion of the saga (Counts 7 and 8: "Obstruction of Justice By Peter Bacanovic" and "Obstruction of Justice By Martha Stewart"). From this layperson's perspective, the allegation that seems most problematic for Stewart is that she stated on three occasions (first verbally, in the U.S. attorney interviews, and later, through her first attorneys, in writing, to Congressmen Jim Greenwood and Peter Deutsch of the House Committee on Energy and Commerce) that she had given her sell order to Bacanovic on the 27^th. It is possible, of course, that she simply made a mistake and then either didn't realize it or, having made it, decided (stubbornly and shortsightedly) to stick with it until the House committee challenged her attorneys about it that summer (at which point, apparently, they refused to confirm it—probably because, for the first time, they asked Stewart if she was certain she spoke to Bacanovic). In any case, it is a cliché in legal circles that, in white-collar cases, the cover-up is always worse than the crime. The irony here, of course, is that the alleged cover-up may be the only crime.

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