Online Encyclopedia
Martha Stewart
Martha Stewart (born August 3, 1941) is a popular Polish-American television and magazine personality known for her cooking, gardening, etiquette, and arts and crafts projects, and as a general lifestyle guide and homemaker. Starting in 2002 her career was rocked by a scandal involving her sale of shares in a drug company days before its application for a new drug was denied. She was eventually convicted of lying to investigators and sentenced to prison in 2004.
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Early life
Born Martha Helen Kostyra in Jersey City, New Jersey, to Polish-American parents, she grew up in Nutley, New Jersey, with four brothers and sisters. A good student, she received a partial scholarship to Barnard College in New York City, where she worked part time as a model to help pay her expenses. She initially intended to major in chemistry but switched to art, European history, and architectural history. After graduation, she pursued her budding modeling career and starred in several television commercials. She stopped modelling in 1965 when she had a daughter, Alexis, with husband Andrew Stewart, a law student she met in college. After modelling, she began pursuing her second career as a stock broker. She continued in this profession until 1973 when recession hit Wall Street. She and her husband then moved to Westport, Connecticut and began restoration of an 1805 farmhouse which is occasionally seen in her television programs (though she uses a stage environment for many shots) and where she still lives today (until her 2004 incarceration). In later years, she began a successful catering business out of her home and began writing columns and articles on topics such as cooking, gardening, and home furnishing. During the 1980s, she was a contributing editor to Family Circle magazine and became a spokesperson for Kmart in 1987 and in 1990, she started her own magazine, Martha Stewart Living. That same year her husband filed for divorce on the same day that her book on Weddings came out.
Rise to fame
In 1993, she began hosting a half-hour syndicated television show by the same name. She soon introduced her own line of home products under the name "The Martha Stewart Everyday Collection." Stewart rose to national prominence with regular appearances on NBC's The Today Show. By 1997 she had launched her first of nine exclusive product lines. She also hosted a cooking show on the Food Network called From Martha's Kitchen and a gardening show on Home and Garden TV called From Martha's Garden. She also founded a website, [1] http://www.marthastewart.com , to promote her products.
In 1999, she founded the company Martha Stewart Living Omnimedia traded on the New York Stock Exchange to combine and control all her enterprises under one corporate entity. She became its chief executive officer and chairman until 2003. Stewart owns approximately 61% of the equity of the company and 94% of the voting power.
As she rose in stature, Stewart became an easy target for mockery and parody on late-night talk shows and Saturday Night Live. Comedians mocked her persona of perfection and her intense attention to the esoteric details of such typically uninteresting topics as ambrosia salad or leaf decorating ideas for tablecloths. She is often the subject of ridicule from late night comedians such as Jay Leno, David Letterman, Conan O'Brien, and Jimmy Kimmel.
Today, Stewart owns upscale homes in Westport, Connecticut; Seal Harbor, Maine; and The Hamptons, New York.
ImClone scandal
Federal indictments and trial
In 2002, Stewart was under investigation for alleged insider trading for selling 3,928 shares of ImClone Systems on December 27, 2001. On December 28, the Food and Drug Administration announced it would not review ImClone's application for Erbitux , which the company touted as a promising cancer drug. ImClone's stock plunged over 70% in the month after the news came out. Stewart has been a friend of ImClone founder Samuel Waksal, who has since pleaded guilty to six counts of wrongdoing related to insider trading before the announcement. On June 6, 2002, the U.S. House Energy and Commerce Committee, which was already investigating dubious ImClone trading, announced that it was probing Stewart's stock sale. On October 3, 2002, Stewart resigned from the board of directors of the New York Stock Exchange. Through all the investigation and allegation, Stewart kept her public persona intact, focusing on her homemaking specialties and downplaying or ignoring the increasing clamor for answers about her role in the scandal.
On June 4, 2003, a federal grand jury in Manhattan indicted Stewart and her former broker Peter Bacanovic on nine criminal counts from the Securities and Exchange Commission (SEC). By selling when she did, the government alleged Stewart avoided losses of $45,673. The charges included securities fraud, obstruction of justice, and conspiracy. Stewart was not indicted on the original charge of insider trading, but only for the coverup that ensued. Stewart maintained her innocence, pleading not guilty, saying she had a standing order with Bacanovic to sell her shares if ImClone stock fell below $60. Stewart resigned as CEO and chairman of Martha Stewart Living Omnimedia on the same day she was indicted, but remained on the company's board.
The day after her indictment, Stewart took out a full-page advertisement in USA Today and launched a website with an open letter of defense "to my friends and loyal supporters." She said, "I want you to know that I am innocent — and that I will fight to clear my name... The government's attempt to criminalize these actions makes no sense to me... I am confident I will be exonerated of these baseless charges."
The SEC later filed a related civil suit against Stewart with charges of insider trading. Stewart's trial was initially set for January 12, 2004, at the request of her lawyers who said they needed plenty of time to analyze the evidence. The trial eventually began on January 20 In New York City presided over by U.S. District Judge Miriam Goldman Cedarbaum. During the trial, Stewart maintained her innocence.
On February 27, 2004, Judge Cederbaum threw out the charge of securities fraud against Stewart. This was the most serious charge; it could have led to up to 10 years in prison with a million dollar fine. The judge called the charge "unfounded" and said that "no jury could feasibly find it to be accurate."
On March 5, 2004, Stewart was found guilty by a jury of eight women and four men on all four remaining counts against her: conspiracy, obstruction of justice, and two counts of making false statements. [2] http://money.cnn.com/2004/03/05/news/companies/martha_verdict/index.htm The maximum sentence for these convictions combined is 20 years in prison, though it is unlikely she will serve the maximum. The jury deliberated for three days following the five-week trial before reaching its verdict. Sentencing was set for June 17. Following Stewart's conviction, a message was posted on her website, reading, in part, "I am obviously distressed by the jury's verdict but I continue to take comfort in knowing that I have the confidence and enduring support of my family and friends. I will appeal the verdict and continue to fight to clear my name. I believe in the fairness of the judicial system and remain confident that I will ultimately prevail."
Fallout after conviction
On March 8, 2004, Viacom pulled Martha Stewart Living from its CBS and UPN affiliates, after having moved the show during Stewart's trial from prime daytime timeslots into less desirable early-morning slots (e.g., 2:05am in New York). [3] http://www.detnews.com/2004/entertainment/0403/09/f03-85522.htm On March 15, Martha Stewart resigned from the board of Martha Stewart Living Omnimedia as a result of the conviction. On May 18, MSO announced that the television show that had started the company, Martha Stewart Living, was going on hiatus, with no announced date of return.
In an unrelated matter, Stewart faced more legal trouble in February 2004 as her company, Martha Stewart Living Omnimedia, was sued by Kmart for allegedly "double-counting" royalty payments and advertising spending. The companies signed a seven-year deal in 2001 to market Martha Stewart Everyday brand home decorating, garden products, and housewares through Kmart stores. Kmart filed for bankruptcy protection seven months later and has since closed 600 of its 2,100 stores. On April 26, 2004, Kmart withdrew its lawsuit, having reached an agreement with Martha Stewart Living Omnimedia to amend the terms of the June 2001 contract and to extend it through 2009.
On May 21, 2004, Larry Stewart (no relation), a United States Secret Service lab director who testified for the government against Martha Stewart, was charged with two counts of perjury. Stock in Martha Stewart Living Omnimedia jumped as much as 23% on the news. Larry Stewart was an expert witness about the ink on a broker's worksheet, testifying that the note about selling Imclone shares when it dropped below $60 was different from the rest of the ink on the document. The charges arose when Susan Fortunato, a USSS coworker, complained that she had in fact done the analysis and that it had never been examined by Stewart. Although the jury at the perjury trial felt that Larry Stewart had taken unfair credit for the work done, it did not amount to perjury and he was found not guilty on October 5, 2004. The jury had trouble believing Fortunato, feeling that she had an axe to grind with Stewart.
Sentencing
On July 8, a motion for a new trial was denied, and sentencing was set for July 16. Martha Stewart and Peter Bacanovic were each sentenced to five months in prison, five months of home confinement, and two years probation, for lying about a stock sale, conspiracy and obstruction of justice. Stewart was ordered to pay a $30,000 fine, while Bacanovic was fined $4,000. The judge stayed the sentence (meaning they do not go to prison yet) while they prepared their appeals. [4] http://www.msnbc.msn.com/id/5444565
On September 15, 2004, accompanied by her lawyers and members of the board of directors of Martha Stewart Living Omnimedia, Martha Stewart held a press conference to announce her decision to begin serving her sentence as soon as possible while vowing to continue ahead with her appeal. On September 21, she was ordered by US District Judge Miriam Cedarbaum to surrender by October 8 to begin her sentence. This will allow Stewart to be released and begin her house arrest in time for spring planting season. On September 29, the Federal Bureau of Prisons announced that Stewart would serve her sentence at the federal prison camp in Alderson, West Virginia, denying her request to serve her sentence at the federal prison in Danbury, Connecticut. She reported to Alderson Federal Prison Camp early in the morning on October 8. Alderson is a minimum security prison, the lowest level of security in the Bureau of Prisons. There are no fences, and inmates are generally free to walk around the compound unescorted.
External links
- MarthaStewart.com http://www.marthastewart.com/
- MarthaTalks.com — An Open Letter from Martha Stewart http://www.marthatalks.com/letter/index.html
- Biography on Martha Stewart http://lala.essortment.com/biographyonmar_rino.htm
- Text of SEC Complaint Against Stewart, Broker http://www.newsday.com/business/printedition/ny-biz-sec-martha,0,6378126.story?c
oll=ny-business-print - Grand Jury Indicts Martha Stewart http://www.washingtonpost.com/wp-dyn/articles/A12725-2003Jun4.html — Washington Post, June 4, 2003
- Martha Stewart Guilty of All Counts http://www.miami.com/mld/miamiherald/news/8117703.htm — Associated Press, March 5, 2004
- Humourous "Free Martha" site http://freemartha.org/index.php
- SaveMartha.com http://www.savemartha.com/ — Fan site run by supporters of Martha Stewart
- BBC News Online - Commentary of her jailing http://news.bbc.co.uk/2/hi/business/3714004.stm
- BBC News Online - Martha Stewart lambasts jail food http://news.bbc.co.uk/1/hi/world/americas/4119501.stm