A Sept. 16 article misquoted one of Martha Stewart's attorneys on the legal impact of her decision to go straight to prison. When asked whether the decision would affect Stewart's appeal chances, Walter Dellinger did not say "it might"; rather, he began to say "in my opinion" but stopped at "in my." He called it a "very strong appeal." (Published 9/17/04)
Saying she wants to put her long-running legal troubles behind her, Martha Stewart asked a federal judge Wednesday to send her to prison to begin serving her five-month sentence immediately instead of waiting until a higher court rules on her appeal.
Standing on a podium in the Manhattan offices of the multimedia empire she founded, Stewart spoke -- sometimes tearfully -- of her decision as both a personal choice and a business decision designed to protect Martha Stewart Living Omnimedia Inc.
"I suppose the best word to use for this very harsh and difficult decision is finality and my intense desire and need to put this nightmare behind me both personally and professionally," said Stewart, 63, who built a hugely successful business around the image of an idealized domestic life. "I must reclaim my good life. I must return to my good works."
Stewart's lawyers delivered the highly unusual request in a letter to U.S. District Judge Miriam Goldman Cedarbaum, who presided over Stewart's trial on charges of obstruction and lying and ruled in June that she could stay free on appeal.
Even as she announced that she is ready to go to prison, Stewart continued to say she expects to win her appeal.
"I cannot bear any longer the prolonged suffering while I and my legal team await vindication. . . . It is time to get it all behind us, behind me, so we can all move forward," she said.
Even if Stewart were to win a reversal, the U.S. attorney's office in Manhattan might retry her, which could take six months or more. The U.S. attorney's office declined to comment on her decision.
"This is a very strong appeal . . . [but] any victory that comes more than a year after the conclusion of her trial doesn't work for her, her family and her company," said Stewart's appeals attorney, Walter Dellinger of O'Melveny & Myers LLP.
Two board members of Stewart's company and Sharon L. Patrick, who took over as chief executive after Stewart was indicted, attended the news conference and expressed support for Stewart's decision. "Thank you, Martha. We are all very proud of you as you take this difficult step," said Chairman Thomas C. Siekman.
Stewart is the company's largest shareholder, and Siekman and the other officials emphasized that the decision to go directly to prison was hers alone.
The company's magazines have suffered major advertising declines, and its main television show is on hiatus because of Stewart's troubles. Patrick has been blunt in recent months, saying that a full recovery was unlikely until Stewart's legal situation was fully resolved.
The company's stock price jumped immediately to $12.50 around the time of the announcement but dropped again to close at $11.26, up 12 cents. The company's stock price was about $19 a share before word leaked in June 2002 that Stewart's sale of ImClone Systems Inc. stock was the subject of an insider trading investigation.
Stewart and three of her appeals lawyers who attended the news conference said the court's decision this week to give her co-defendant and former broker Peter E. Bacanovic until mid-October to file his part of the appeal means that the case cannot be resolved before the middle of next year.
Most defendants -- including former investment banker Frank P. Quattrone just last week -- are required to start serving their sentences while they appeal. Some drop their appeals voluntarily to save money or because they think they won't win.
But Stewart's decision to start serving time voluntarily while still pursuing an appeal "is virtually unheard of," said Kirby D. Behre, a Washington defense lawyer who has written about the sentencing process. "This says loud and clear that she is putting her company's interests ahead of her personal interests."
Dellinger said Stewart's decision to go to prison immediately might hurt her chances of winning on appeal, and some lawyers not connected to the case agreed.
The 2nd Circuit judges "read newspapers like everyone else," said defense lawyer Charna E. Sherman, who is not involved in the case. Going to prison makes the appeal weaker because it "relegates an already uphill battle that was once about the most compelling issue of all -- liberty -- to one now merely about personal vindication."
But other analysts said Stewart has legitimate appeal issues. Not only were some of Cedarbaum's evidentiary decisions fairly close legal calls, but allegations also arose after the trial that both a juror and government witness may have lied under oath, they said.
"I wouldn't expect her decision [to serve her sentence] to have any impact on how the 2nd Circuit views the legal issues in the case," said Barry D. Boss, a D.C. defense lawyer.
Stewart is likely to serve time in a low-security women's institution where many inmates serve time for drug-related offenses, prison officials said.
A Bureau of Prisons spokeswoman said that once the judge consigns Stewart to its custody, the housewares entrepreneur will probably learn within a few weeks where she will be sent. Stewart said during her news conference that she hoped to be assigned to a minimum-security camp in Danbury, Conn., because it would make it easier for relatives to visit. But her lawyers said prison officials have told them that Danbury is full. Her second choice is a prison camp in Coleman, Fla.
Danbury houses about 1,200 inmates. Two hundred more serve time in the adjacent camp. Inmates in the camp are often housed in rooms of four to six people and sleep in bunk beds. Medically fit inmates must work in jobs such as groundskeeping or food service, and the prison also offers educational classes including crafts.
Stewart said "I have a very difficult five months ahead of me" and that she was sad she would be missing Halloween, Thanksgiving and Christmas. "I will miss my pets. . . . It's odd what becomes important when one realizes one's freedom is about to be curtailed," she said.
"I would like to be back as early in March as possible in order to plant the new spring garden," she said.
Cedarbaum has also sentenced Stewart to serve a five months of home confinement at her estate in Bedford, N.Y. Stewart will be permitted to work outside the home for 48 hours a week, said board member Charles A. Koppelman.
Patrick said she hopes Stewart will resume taping her television show as soon as next year. The company recently renewed its arrangement to sell domestic products at Kmart stores through 2009.
The company's recovery is by no means assured. The Securities and Exchange Commission has filed civil insider trading charges against Stewart, alleging she was improperly tipped that ImClone founder Samuel D. Waksal was unloading his shares in the company. If the SEC wins, it could ask a federal judge to bar Stewart from being an officer of a public company, though SEC officials have said previously they are mindful of Stewart's unique role.
Most stock analysts who follow the firm rate it a strong sell, and advertisers may not coming rushing back after Stewart gets out of prison.
"They've got other places they can advertise, Real Simple and the Oprah spinoff. Advertisers are going to want a deal and I don't know if Martha Stewart will give it to them," said Dennis McAlpine, an independent analyst who follows the company.
Stewart, though, remained focused on the future as she plugged the company and its products, and thanked advertisers, fans and customers for their support.
She choked up as she addressed her hundreds of employees. "I really will miss all of you and I can't wait to return," she said. "I firmly believe in the future of this company and I have great faith that its best days are ahead of it."