Judge Turns Down Stewart Defense
Federal Guidelines Intact for Sentence
By Brooke A. Masters
Washington Post Staff Writer
Friday, July 16, 2004; Page E02
NEW YORK, July 15 -- A federal judge has refused to toss out the federal sentencing guidelines that call for Martha Stewart to get a 10- to 16-month prison term when she is sentenced Friday for obstructing a federal investigation into her personal stock sales.
U.S. District Judge Miriam Goldman Cedarbaum said in a one-paragraph order that she did not plan to declare the guidelines unconstitutional, as Stewart's lawyers had requested. The multimillionaire businesswoman's defense team had argued that a June U.S. Supreme Court decision called Blakely v. Washington undermined the guidelines' validity.
The ruling, which was handed down late Wednesday but not made public until Thursday, closes off one of Stewart's best avenues for avoiding prison.
However, Cedarbaum could still split the sentence she hands down and allow Stewart to serve up to half her time in home confinement.
Stewart's lawyers are also trying to convince Cedarbaum that Stewart's case is so unusual she should qualify for a "downward departure" from the guidelines and get probation and community service. They have argued in sealed papers that a prison term would do irreparable harm to Stewart's public company, Martha Stewart Living Omnimedia, and its hundreds of employees, according to two sources familiar with their contents, who spoke on condition of anonymity.
Both Stewart and her former broker Peter E. Bacanovic, who was convicted of conspiring with her, have also argued in their sealed motions that the judge should view their behavior during the investigation of Stewart's December 2001 sale of ImClone Systems Inc. stock as an aberration, the sources said.
Prosecutors said the pair tried to cover up the fact that Stewart unloaded 3,928 shares after Bacanovic's assistant improperly told her that ImClone founder Samuel D. Waksal was trying to dump his stock.
The U.S. attorney's office declined to comment on Cedarbaum's ruling and Stewart's spokesman did not return phone calls.
Legal analysts said Cedarbaum's decision was not surprising. The Blakely ruling held that it was unconstitutional for a judge to increase a defendant's sentence based on factors not considered by a jury. As Cedarbaum noted in her ruling, she has not been asked to do that in Stewart's case. "The sentencing guidelines applicable to this case do not require any enhancement by the judge," she wrote.
In addition, the U.S. Court of Appeals for the 2nd Circuit, which will hear Stewart's promised appeal, has declared itself unsure how to apply Blakely. Earlier this week, the court officially asked the Supreme Court for guidance.
© 2004 The Washington Post Company