No Need to Fall
By disconnecting herself from their reality, Martha Stewart fell from power. She had no need to fall. All that she needed to do was to understand their reality and embrace it. But for a long time she could not. When she finally did become sensitive to their reality, when she was no longer disconnected from their reality, she was ready to rise again. Martha: On Trial, in Jail, and on a Comeback looks at her fall and her mission to rise again in the first book-length, in-depth examination of the greatest crisis in Martha Stewart’s life and career.
It all came to a head for her in the early afternoon of December 27, 2001, when she committed a minor offense, and her world fell apart.
She committed the offense in the spur of the moment on a remote, noisy, busy airport tarmac while on a cell phone, not even certain to whom she was speaking. She did not initiate the alleged crime; the person on the other end of the phone and that person’s boss did that. She did not stand to gain a huge amount of money; all she did was avoid losing what amounted to pocket change for her. At first glance, she seemed to be committing the crime of insider trading; but when she was probed the evidence just was not there for an insider trading charge.
And yet this one minor transgression threatened to put an end to all that she had built.
Her critical misstep came about after she learned that a close friend, the co-founder of a major biotech company called ImClone, had been trying to unload his company shares; she then sold all of her stock in that company.
Others had sold stock in that company at the same time as Martha Stewart, but she became the focus of a major investigation undertaken by the Federal Bureau of Investigation, the Securities and Exchange Commission, and the United States Attorney’s Office. A Congressional probe went on in parallel with the federal investigation.
Why, if what Martha Stewart had done was indeed minor, had she come under such official scrutiny?
After all, she had not killed anyone. She had not stolen money from a pension fund. She had not put personal items on the company’s expense account. Indeed, by acting on a hot stock tip from a stockbroker with connections to the company of the stock, she had done nothing different from what many on Wall Street were doing hour after hour.
Why had the feds singled her out?
True, she had sold her ImClone stock on the eve of an unfavorable FDA decision on the company’s highly touted cancer drug called Erbitux; but she was not a senior executive at ImClone, nor did she know that an unfavorable FDA decision was in the offing.
But she was no serial murderer, no child abuser. What had she done to agitate the feds to such a degree?
It was, as it turned out, not what she had done—but what she was.
Martha Stewart was an icon.
She was someone the feds could collar and hold up to public ridicule and put away in jail—and be assured that the entire nation would know of their noble deeds. By taking that stock tip when she did, Martha Stewart provided the feds with a villain at a time when real, honest-to-God corporate villains were roaming the streets free. Ken Lay of Enron and Dennis Koslovsky of Tyco had practically dropped a nuclear weapon on their companies, but their encounter with the criminal justice system was a long way off.
Not only was Martha Stewart iconic, she was available. She was a tantalizing example who could be put under the public spotlight immediately. Unlike the complicated, arcane corporate shenanigans of others, Stewart’s tiny little indiscretion could be served up to the media and the public with the kind of immediacy and a panache that could only thrill the feds.
Does the phrase "Kafkaesque" come to mind? You bet it does.
Though far more victim than villain, Stewart fit neatly into the surrealistic world of the feds who cared little about how much actual harm she had done. What they cared about was their resumes.