I reecntly got back from the First Annual Big Ten UnTENured Conference, generously hosted by the Indiana University law school. It was wildly hot and humid in Bloomington, IN, but the facilities were nice, the Bloomington campus was beautiful (it reminded me of the Berkeley campus -- high praise!), and best of all, the other junior law profs were terrific fun.
Anyway, Martha Stewart was a recurring topic of conversation, as it turned out. First, on the drive from Iowa City to Bloomington, my friend and colleague Ethan Stone and I had a good debate about the propriety of prosecuting Stewart for, essentially, lying and covering up a non-crime. Second, at the Big Ten conference, Conglomerate blogger Christine Hurt presented a paper on the "undercivilization of corporate law" in which she also touched upon the same question.
Personally, I do not have much sympathy for Martha Stewart. 18 USC s 1001, the false statement statute, is quite strict in application, and I have no doubt that the government could easily prosecute any number of people who are waylaid into lying to the government through panic. I'm most bothered by the cases where the government knows the facts and asks the defendant something anyway -- hoping for a false response so that it can bring a 1001 charge. But in Stewart's case, she had access to legal counsel, and not just any legal counsel, but Wachtell Lipton, one of the most prestigious firms in the country.
So, for me, the persuasive narrative in this case is a superrich executive who figured it was acceptable for her to lie to SEC lawyers and FBI agents -- with her own lawyers present -- because that was the most expedient thing for her.
However, that's not the only narrative that could be told in this case. Could it be that prosecutors, having already stated that they were going to bust Stewart for corporate crimes, had to come up with something to convict her of when the dubious securities fraud charge fell apart?
Unfortunately for Stewart, the second narrative was not one that could be offered to the jury, and hence the jury readily accepted the first narrative and convicted her. Nonetheless, the second narrative is an undeniably powerful one, and I wouldn't be surprised if it did explain to some degree the prosecution's decision to go after Stewart with such zeal. The debate between the pro- and anti-Stewart camps is ultimately, in some ways, an assessment of the relative likelihood of each of the narratives.