Originally created 08/13/02

Humiliating Martha



There's no better example of government abusing its power than the way the U.S. House is investigating - or perhaps more accurately, persecuting - Martha Stewart.

Admittedly, we've all had a good laugh imagining the decorating maven sprucing up her jail cell, and many people find her arrogant aura of homemaking perfectionism hard to take, but that shouldn't entitle Congress to set out to humiliate her.

Let's remember what Congress' oversight role is. It's to gather information to write new laws or to update old ones.

It's not to look into criminal activity - that's law-enforcement's job - much less to try to establish guilt or innocence.

The House Commerce Committee has ample cause to investigate the collapse of ImClone, but why the need to investigate Stewart? She was an investor, not a company executive.

ImClone was headed up by Stewart's good friend Sam Waksal who was indicted last week on assorted insider trading, fraud and forgery charges, for allegedly alerting family members that the FDA was about to announce serious bad news for the company.

What House probers want to know is, did Waksal also alert Stewart and, if he did, did she realize she was the recipient of an inside tip that allowed her to profit by $227,000 before the stock collapsed? She claims she wasn't tipped off - that she had a standing order to sell her ImClone stock if it dipped below 60. So far, no one has found a record of the sell order, and accounts differ as to whether one ever did exist.

But why is this Congress' business? How is knowing about Stewart's stock sale going to help the House write better laws? It won't, yet House Commerce Committee Chairman James Greenwood, R-Pa., says, "We can't sweep something like this under the rug because Martha Stewart is a celebrity."

Actually it appears he wants to question her precisely because she is a celebrity. If she were just another investor who made a suspicious profit on her stock, would Congress still be so interested in her? Not likely. However, the Securities and Exchange Commission would be, as well it should. It's that agency's job to investigate insider trading and to level fines when appropriate.

If Stewart also obstructed justice by lying to investigators, then that evidence should be turned over to the Justice Department for prosecution.

Stewart's formerly high-flying firm has taken a fearsome beating as a result of all the bad publicity. Indeed, the $227,000 profit she made on ImClone is dwarfed by the millions she's lost in her own company's stock.

No matter how the SEC investigation of her ImClone trade turns out, Stewart's reputation has been terribly damaged, perhaps irreparably. Further humiliation of her by Congress - members hope to force her to take the Fifth Amendment against self-incrimination - amounts to piling on. It's mean-spirited and unnecessary.