Wednesday, February 25, 2004

Stewart won't take the stand; defense case could take 1 day



The Associated Press

NEW YORK - Martha Stewart will not take the stand in her own defense, her lawyer said Tuesday, gambling that jurors will not need her testimony to acquit the homemaking icon of lying about a stock sale.

Lawyer Robert Morvillo said Stewart's defense team would call no more than two witnesses - a former lawyer who represented Stewart when she first met with government investigators and, if the judge allows it, a memory expert.

In either case, the Stewart defense is expected to start and end its case today. Closing arguments could begin as early as Thursday, although the judge said she might delay them until next week.

Morvillo made his announcement after jurors were excused from the 16th day of testimony at the trial. Stewart and broker Peter Bacanovic are accused of lying about why Stewart sold ImClone Systems stock Dec. 27, 2001.

Stewart and Bacanovic say they had prearranged to sell her shares when the price fell to $60. The government claims Stewart was tipped that ImClone founder Sam Waksal was frantically trying to sell his shares that day.

Rather than asking jurors to decide between the government's version of the story and Stewart's, Morvillo will simply argue prosecutors have failed to prove the case beyond a reasonable doubt.

Legal experts say putting Stewart on the stand would have raised a host of concerns for her defense team, including having her explain inconsistencies in her statements and exposing her to risky cross-examination by the government.

Other testimony at the trial has already shown Stewart's quick temper, and she could have damaged her case by appearing hostile or combative.

Stewart and Bacanovic have told investigators slightly different versions of what happened after the stock sale, although they both maintain the central element - that they had a plan to sell the stock at $60 per share.

Bacanovic's lawyers called just five witnesses, and expect to rest their case Wednesday morning. Lawyers for the broker decided he would not take the stand because "the government hasn't made its case," spokesman Lou Colasuonno said.

The star witness for the government was Douglas Faneuil, the young Merrill Lynch & Co. assistant who claims he passed the tip about the Waksal selling from Bacanovic to Stewart.

The day after Stewart sold, ImClone announced the government had declined to review its application for an experimental cancer drug. The stock sharply declined in the next trading day.

In front of the jury Tuesday, a business manager for Stewart testified that Stewart billed her company for the luxurious vacation she took just after selling her ImClone Systems stock in 2001.

Heidi DeLuca, who handles finances for Martha Stewart Living Omnimedia and for Stewart personally, testified she was instructed to submit the $17,000 vacation at the lush Las Ventanas resort in Mexico for reimbursement as a business expense.

Stewart is not charged with any crime in connection with her expense practices.

Prosecutors aggressively attacked the credibility of DeLuca, who helped the defense on Monday when she said Stewart's broker had mentioned a desire to unload Stewart's ImClone shares at $60 or $61.

DeLuca placed the conversation on Nov. 8, 2001, about seven weeks before Stewart sold 3,928 shares of ImClone Systems stock.

Questioning DeLuca, prosecutor Michael Schachter tried to suggest that her conversation with Bacanovic had actually taken place in October and that the $60 or $61 instead referred to shares Stewart held in a pension account.

Schachter showed her a document dated Oct. 24, 2001, on which she had written an ImClone stock quote - $61.52 - while she was on the phone with Bacanovic.

DeLuca insisted that her memory was clear and that there had been more than one conversation.




BUSINESS HEADLINES
Cintas Corp. files defamation suit against UNITE
52-week high for Federated
Spinoff sales mounting
Roto-Rooter completes acquisition
Former Enquirer publisher to head Salt Lake agency
Greenspan: Mortgage giants' debt could threaten system
Job worries drop index in Feb.
Stewart won't take the stand; defense case could take 1 day
Gates unveils Microsoft's newest security features
France plans to sell Snecma by July
4th-quarter profits static for Clear Channel
Tristate summary
Business Digest