The Story of E

Government golden boy high as a kite! Lawyer hated by all! "Conflate my ubiqitosity," star witness enuncificates


These are Elizabeth Koch's notes on the Martha Stewart trial.

Today started off with a bang. Before the jury was called in, Cedarbaum allowed the defense to question prosecution witness Douglas Faneuil's drug use. He lied in the first 10 minutes. First he copped to only smoking marijuana at Merrill—and infrequently at that; but when Morvillo presented F. with transcripts of a Jan, '03 meeting between him and the SEC, the witness changed his tune. "I took ecstasy once."

When Apfel, Bacanovic's number two lawyer, tried to question F. about the perjury, the judge told him to save it. "I'm sure there will be other inconsistencies you can point out."

Jury called in. Lead prosecutor Seymour discusses F's various interactions with Martha on Dec 27.

"I told her Peter wanted her to know that Sam was selling."

"She asked, all of his shares?"

"I told her all of them at Merrill."

Martha apparently asked for a price quote before selling.

F. alleges that he then asked Martha if he should e-mail Heidi, Martha's secretary/accountant about the exchange. He characterizes Martha as getting hysterical, literally pitching his voice higher and imitating her, "Absolutely not! You are never allowed to discuss my [personal finances] with anyone! Under any circumstances!" Several jury members' eyes widen. Faneuil, as we'll see, is a big fan of these sorts of reenactments.

He portrays himself as an apologetic, docile little creature, which no doubt is the case when he's confronted by his superiors. He seems very earnest to be liked, valued, and congratulated. In short, a kiss ass.

The jury, the bulk of them at least, seem to like Faneuil. During several of the defense's objections (to Seymour's leading the witness), they attempt to argue points, which obviously infuriates Cedarbaum. "No speaking objections!" she shouts at one point, inducing a princessy smirk out of Seymour. Juror # 11 and an alternate squint and purse their lips, as if to say, "shut up and sit down, you fool." They seem to accept Faneuil's hyperbolic mimicry at face value.

He does it again, this time impersonating Bacanovic. He says that when he spoke to Peter on the phone on Dec 31 about his upcoming meeting with Judy, the Merrill Lynch administrator, about the events of Dec 27, his boss screamed, "Tax-loss selling! That's what you tell them! That's Martha's reason for selling, tax-loss!" pitching his voice like a lunatic. F. claims he tried to argue that tax-loss selling was impossible since Martha sold at a gain, but Peter wouldn't let him speak. He has his boss in similar hysterics later on in the week, after Heidi called F. to ask about the Imclone sale and to complain it completely screwed up Martha's tax-loss plan. When F. called to ask Peter about it, his boss apparently shouted, "No! Stop-loss order! That's her reason for selling! Okay? Okay?" I catch Bacanovic shaking his head. The jury looks concerned, possibly persuaded at this point. Meanwhile, F is portraying himself as a reluctant participant: "I knew in my heart what I was doing was wrong. But I was afraid." Some members, especially # 10 and #11, look sympathetic. Others are unreadable.

Seymour asks a barrage of questions that insinuate Bac was trying to bribe F.—extra time off, a free ticket to Argentina—Faneuil says he refused the plane ticket and only took one week off, the amount of time Judy had suggested.

Finally, when Bacanovic arrives back, Faneuil claims he said, "Listen, I've spoken to Martha, and everyone's telling the same story. We're all on the same page. It was a stop-loss order at $60, okay? Okay?" He says Bacanovic repeatedly reminded him of the story during the time frame of the various SEC interviews (Jan '01—Jun '02), the ones before F. finally came forward. He struck a deal with the SEC in Jun '03, pleading guilty to informing one client about another's trades.

Cross did not go well, especially at first. Apfel comes in like a steamroller, aggressively attacking F in both tone and word choice, not so much asking questions as asserting statements: "Martha only sold after you quoted ImClone's price, right? Right? Isn't that true, sir?" He shoots questions so quickly F. doesn't have time to think, let alone answer. The jury looks upset, like moms watching a coach humiliate their child in the big game. Many—# 10, 11, 2, 8—refuse to look at Apfel at all.

"No one told you to lie, correct?"

"You ignored our attempts to contact you, isn't that true, sir?"

"You believed you were bound to the terms of the co-op agreement, right?"

F. stutters and stumbles a bit, but doesn't get defensive; he remains polite and tries to answer. Apfel was just nasty. The whole thing was embarrassing to watch, even for me, and I'm clearly biased.

In addition to the four jury members who averted their eyes, three alternates glare, literally glare, at Apfel. Out of the entire jury, only four seem sincerely open-minded and focused, genuinely interested in discovering the truth; numbers 1, 3, 4, and 9.

The judge is just as put-off as the rest of us. After repeatedly—I mean, five or six times in one hour—ordering Apfel to move on, she finally barks, "I think if you ask less powerful, loaded, and direct questions, you might get better answers." I.e., stop attacking the kid.

Apfel tries to establish two things: 1) Faneuil lies so frequently about so many things, to Merrill Lynch officers and the SEC about drugs and conversations, that we shouldn't listen to him now, and 2) F. was attempting to curry favor with the government by testifying according to their plan, that he "rehearsed" his statements. Apfel goes so far as to ask, "Did you also take acting lessons to prepare for your testimony?" Cheap shot, Apfel. Some jury members look confused, others smirk.

Seymour's objections are often sustained; occasionally she makes cute little jokes that make juror # 4turn bright red and laugh. ONLY He smiles at her. I think he has a crush.


Apfel continues to badger F. about all the occasions, all the SEC meetings, he promised to tell "the truth, the whole truth, and nothing but the truth," and failed to do so, even after they reached a plea bargain. "Why today do you recollect that Bacanovic told you he couldn't speak to Martha on Dec 27 for reasons that 'had something to do with a boat' when you've never mentioned that before? In the meeting with the SEC, why didn't you tell them Bac had told you he'd be unavailable to do a trade with Martha that day?" He's basically asking whether F. was lying then or now. Faneuil says he only recollected the boat bit recently. A few of the jurors finally look curious and pondering, if not altogether skeptical, namely #1, 7, and 9.

Defense's last push of the day was to barrage F. with questions about the plea bargain, about the leverage it provides him, about the favors it offers him, about what punishment he could avoid if he plays his cards right. Essentially saying it makes sense that F. would lie to avoid jail, to protect his liberty. "So we should believe that Bac intimidated you more than the idea of going to jail? That's why it took you so long to come forward?"

"Yeah, actually." And I believe that.

"This is getting repetitive, Mr. Apfel. Let's move on," Cedarbaum said, for the eleventh time that day.

The jury seems spit between those who are now considering Apfel's argument and those who STILL refuse to look at him (except for the occasional eye roll or raised eyebrow). Faneuil handed himself well: He admitted to lying, but refused to concede that he felt "protected" from being punished for crimes (like drug use) that had nothing to do with the case. "My hope is that they don't charge me for something I did in the past."

"Just like they didn't charge you with lies you told in the past…"

"Yes, but only so long as I don't tell any more lies." He likes using 20-cent words, literary and academic words, like "conflated" and "ubiquity." But his pretensions don't seem to bother the jury nearly as much as Apfel's tactics.