As U.S. District Judge Miriam Goldman Cedarbaum prepares to sentence Martha Stewart on Friday for obstructing a federal investigation, the judge will have to consider a constitutional challenge to the federal sentencing system, the potential effect of a prison sentence on the multimedia company Stewart founded and more than 1,000 letters from the general public pleading for leniency.
"Martha has been a hard-working citizen and provided jobs for hundreds of people. Her record has been spotless," wrote Della Sharp, 45, an administrative assistant from Chino Valley, Ariz., who described herself in an interview as an occasional watcher of Stewart's television show. "Justice would be better served by giving her community service and probation."
Jesse Aguirre, 45, told the judge how Stewart's visit 12 years ago gave his then-struggling Houston antiques store a valuable boost. "Placing Martha Stewart in any jail cell for even one day would just be wrong," he wrote.
The letters have been flowing into the Manhattan federal courthouse for months, ever since Stewart, 62, and her former broker Peter E. Bacanovic, 42, were convicted in March of conspiracy, obstruction and lying to federal investors about her December 2001 sale of ImClone Systems Inc. stock.
More than 1,000 writers sent copies of their letters to Stewart's defense team, her spokeswoman said. Men and women, lawyers, homemakers, retired policemen and even the cooking staff of an Illinois middle school have all put pen to paper in support of a woman most of them have never met. Stewart's lawyers made some their letters available to reporters.
Letters sent only to the judge remain private. There is no public way to judge the total volume or overall tone of the correspondence.
"I did it on the spur of the moment. I thought it would be a terrible waste of beautiful talent to put her in jail," said Eleanor Flomenhaft, 70, a New York art historian, who wrote to the judge suggesting that Stewart instead be required to volunteer weekly at a women's prison for two years. "This woman was to homemakers what Einstein was to science and Freud was to psychiatry," she wrote.
Under the federal guidelines, Stewart and Bacanovic are likely to receive sentences of 10 to 16 months, but each defense team has submitted a private legal memorandum to Cedarbaum urging her to give them probation and community service. Each cites supportive comments from friends and business associates (separate from the letters publicly released) and argues that the four-month period in 2002 when the ImClone sale was under investigation should be viewed as an aberration.
The defendants also have submitted elaborate plans for community service that they say would do more to repay society than serving time in prison. Stewart's lead lawyer, Robert G. Morvillo, is also arguing that sending Stewart to jail would do irreparable damage to Martha Stewart Living Omnimedia, the public company that she founded and headed until her indictment, said sources familiar with the arguments, who spoke on condition of anonymity.
The U.S. attorney's office in Manhattan, meanwhile, has submitted its own sentencing memorandum. Spokesmen for the prosecutors and the defense teams declined to discuss their private sentencing memos for this article.
But last week, Stewart's legal team filed a public motion asking Cedarbaum to declare the entire federal sentencing process unconstitutional because of the U.S. Supreme Court's June ruling in Blakely v. Washington. That case held that Washington state judges may not use facts that were not considered by a jury to increase a defendant's sentence, but several judges have already ruled that it invalidates the federal guidelines. The U.S. Court of Appeals for the 2nd Circuit, which will get Stewart's case on appeal, formally asked the high court this week to explain how the case applies to federal sentences.
If Cedarbaum rules that the guidelines are unconstitutional, she could then sentence Stewart and Bacanovic to anything from probation to five years, the statutory maximum for the charges they were convicted of.
Stewart appears "willing to gamble that the judge will give her less than 10 months," said Frank Bowman, an Indiana University law professor who writes about the federal guidelines.
But American University law professor David Zlotnick said Cedarbaum may not be interested in giving Stewart less prison time. "The trend right now is to send white-collar defendants to prison," he said. "Judges also hate it when people lie and they hate it when defendants obstruct justice."
However, the Blakely issue could help persuade the judge to let Stewart stay out of prison while her appeal is pending, legal analysts said. So far, Cedarbaum has rejected two Stewart motions asking for a new trial, but the judge may be more open to keeping Stewart out on bond until the sentencing rules are clearer, the analysts said.
That may be a personal victory for Stewart, but it could spell bad news for her multimedia and home products empire because it would prolong the legal battle and the constant negative news, said Professor Paul A. Argenti of the Tuck School of Business at Dartmouth College. "It's bad for her. It's bad for the company that she's continuing this fight," said Argenti, who worked with Stewart on licensing deals in the early 1990s. "The company has to start moving on without her."
The company is beginning that process. Columns once authored by Stewart are now personality-less. For the September issue of Martha Stewart Living, the typefaces have been changed to reduce "Martha Stewart" and emphasize "Living." Stewart has even disappeared from the catalogue -- not pictured once in a recent mailing.
The magazine's distribution guaranteed to advertisers -- 1.8 million -- has remained steady, but advertising has declined rapidly, analysts said. "Having expected a terrible 2004, we are surprised by how much worse it likely will be," wrote Alissa Goldwasser, an analyst with William Blair & Co. in a May report. A Martha Stewart Living Omnimedia spokeswoman declined to comment.
T.K. MacKay, an analyst with Morningstar, said the company still could make a comeback, in part because its merchandizing contract with Kmart, which he said is the "real bread and butter," was extended and the magazine continues to introduce the brand to new customers. But for now, he is advising investors to stay away.
"Long-term investors are not interested in doing business with damaged business models," he said.
Staff writer Lauren Bayne Anderson contributed to this report.