These are Elizabeth Koch's notes on the Martha Stewart trial.
Judge Miriam Goldman Cedarbaum spent the bulk of today indulging circular arguments. Before trial began, lead prosecutor Karen Seymour asked for permission to take the jury through phone records made between Peter and Martha from December '00 to Feb 4, '01. The judge said she is allowed to summarize voluminous records, but that she cannot pick a particular day or a specific phone number and infer meaning or context. That's her ruling, she repeated herself three or four times, but for some reason allowed Seymour to drag her into a cyclical debate. I say Seymour because on the occasions Apfel leapt up to contribute his two cents, Cedarbaum promptly ordered him down. For a while it seemed the judge wanted Seymour to change her mind, to convince her speculation's quite appropriate. If so, Seymour failed her. Cedarbaum reiterated, "I'll permit prosecution to submit records that show Martha and Peter spoke more frequently on a particular month, but you're not allowed to urge the jury to infer 'conspiracy' from the number of calls they exchanged on any one day."
"But judge," Seymour said, leaning forward from the waist, as if inclined to grab Cedarbaum's shoulders. "I'm trying to prove that Bacanovic and Stewart did speak before Feb 4 [the date of Martha's first SEC interview].
"Morvillo—in his opening arguments—said, 'How'd they conspire? By means of osmosis?'" she mimicked, sneering and tossing her head from side to side like a schoolgirl. "But the records clearly show that they did in fact speak, on more than one occasion."
"But you cannot infer what they discussed." Cedarbaum smiled slightly, seeming amused by Seymour's passionate display.
Apfel, no doubt sickened, burst through their bond to speak for Morvillo, "Your honor, the dates Mr. Morvillo referred to in his opening arguments were from Dec 28 to Jan 7, not all the way through Feb 4." In fact, he argued, the two spoke so frequently that any discussion of phone records is irrelevant and can only leads to conjectures. "Mr. Apfel, are you going to argue to the jury that Bacanovic and Stewart made lots and lots of calls to each other in the month of January? Enough!" She shouted, cutting him off. "We'll discuss this further at the next break." She paused, then added, "I have enormous confidence in juries. They follow my instructions very conscientiously." How dare he suggest otherwise.
Witness: FBI phone record analyst, Agent Ryan
This guy could've been plucked from the set of Law and Order. His features were fairly nondescript—blond, close-cut hair; frat-boy face (arrogant but otherwise ordinary)—but his expression and attitude an utter stereotype. Shachter asked Ryan what role he was assigned in the ImClone trade case. "I was asked to isolate phone calls made between the parties who performed suspicious trades on December 27." His voice sounded funny, like he was forcing it an octave deeper than natural; his head tilted downward, his eyes peered upward; one eyebrow remained raised. His look said, "Come on, fella. Get with the program."
And with good reason. Cedarbaum scolded Shachter four times in ten minutes, cutting him off at each instant:
"Speak into the microphone, Mr. Schachter."
"You instructions to the jury are too confusing."
"Do you want to enter the document into evidence (or what)?"
"Wait until I find where you are!"
Shachter took Ryan through each call made on the morning of Dec. 27, a mind-numbingly long list, with the seeming objective of verifying Faneuil's assertions. But as Cedarbaum repeatedly stated, a phone call alone—no matter when it was made—proves nothing about content. To my mind, Faneuil's flawless memory of Dec 27 only really confirms he was well-coached by the prosecution.
I should add here something about the jurors: they quite clearly adore the judge, and she dotes on them. She steam-rollered over Shachter today, taking it upon herself to explain the phone log notebook he put together, to announce the page numbers when Shachter failed to, and to require the witness to clarify the layout of his phone chart. Each time Cedarbaum addressed the jurors, they broke into a group grin; never did they turn a page or move a muscle until Cedarbaum instructed them to do so. She respects them, looks after them, reminds them how important their jobs are. I cannot overstate: They love her.
Shachter asked Ryan about a fax someone from Peter's office sent Heidi deLuca on Dec 27, a worksheet dated December 13 listing Martha's stock portfolio. There was no "@ 60" notation next to ImClone. The next worksheet he entered into evidence was an e-mail from Peter to Martha dated December 20, which did have the "@ 60" ink mark next to ImClone. Discrepancy? Sure. A third document completed the picture: a second e-mail from Peter to Martha, dated Dec 21, which detailed the transactions executed on Stewart's tax-loss sale list for '00. ImClone was not included. I'm not sure the evidence is damning as Shachter would like—the tax-loss transaction list would have only included those stocks sold at a loss, right? And since ImClone was sold at a gain, it naturally wouldn't appear. We'll see.
During lunch break, Seymour requested permission to isolate phone calls apparently made between Peter and Martha on Jan 7 (the day Martha arrived back from Panama; also the date of Peter's SEC interview) and Feb 4 (Martha's SEC interview.) Cedarbaum says no: Not only is there no proof Martha ever arrived to her Connecticut office on Jan 7, but the phone records do not specify which of the 38 phone lines were used. "You just want to prevent Mr. Morvillo from saying there was no communication between Stewart and Bacanovic on Jan 7." Seymour protested—shrieked, really—that considering the timing and "other evidence," one can infer that they spoke" (and no doubt, in her mind, what they spoke about.
Morvillo stood and made his only observation of the day, "Let me put Ms. Seymour's mind to rest, since she seems sensitive on this issue. I will not argue that the two didn't speak on Jan 7."
Cedarbaum laughed while Seymour bit back a tantrum. "Neither of you can speculate whether the defendants did or did not speak on Jan 7." In other words, the call has no relevance and will not be admitted.
But what about the call Peter made to Martha's private line on Feb 4 at 7 a.m., Seymour wanted to know. The call in fact was a voice mail no one retrieved until after Martha's SEC interview. "It's the timing of the call your honor," she says, her voice lurching, her arms swinging wildly. "It was highly unusual for Peter to call Martha at 7 a.m., and considering her SEC interview."
"But since he did not succeed in speaking to her, you cannot charge he was trying to commit an overt act," Cederbaum said. "An overt act is not a state of mind—it's an act. That's why it's called 'overt.'"
The judge explained her concerns that directing attention to the call—the unretrieved voice-mail message—would confuse the jury, that Rule 403 stipulates she cannot allow into evidence anything that carries greater emotional than factual weight, Seymour exploded. "That's not fair!" she shouted. I'm paraphrasing, but she basically said, 'We've done all this work and you're declaring it all irrelevant! We just want this one little thing and you won't let us have it!!" And the sorry thing is, instead of getting angry the way she would at Strassberg or Apfel or even Shachter, Cedarbaum actually gave in. Somewhat. "Okay, all right, I see. You can discuss the phone calls but you cannot make a point about the date." Cedarbaum's gone soft on Seymour.
I wasn't the only one who noticed.
After lunch, Shachter continued to ask mundane questions. He requested that Ryan read from Peter's notes dating back to '97, a log that spells out the order types he made with some? most? of his clients. Cedarbaum didn't give Shachter a chance to make a point or even establish a pattern: she sustained almost every objection. Several jurors rolled their eyes. Shachter's a weird, robotic little man—he didn't flinch at one sustained objection. He just moved on.
During cross, Martha's number two, John Tigue, established that the government subpoenaed Ryan to weed through over one billion phone calls and seize only the ones with suspicious timing. Interpretation: of course you can find something suspicious when you're drawing from such an enormous pool. You could prove about anything you wanted. "So for every notation you made on the Dec 27 chart, there were a dozen you left out, right?" Ryan refused to speculate on numbers, but he did concede to "many." Tigue challenged Ryan to claim anything worthwhile could be derived from a phone record: Who was on either line? No. What they discussed? Of course not. And in the case of cell phones, you can't even tell what number placed the call, can you? No, you can't.
Tigue firmly established that Martha put her call in to Sam after selling her ImClone stock, not before; a nice reminder for the jury. Unfortunately, Tigue does not enunciate well, nor are his questions phrased clearly. Cedarbaum ordered him to rephrase the question several times "so we can understand you." But, all in all, he dismantled the government's insinuations fairly rapidly.
Then came the big blow for Martha. Cedarbaum announced she'll allow the testimony of two good friends of Faneuil, friends he apparently confided in six months before confessing his lies to the government. In January '01, Faneuil apparently told them that on Dec 27, he passed along information he shouldn't have, and was ordered to do so.