Stewart Asks Panel For StatementAug 12, 2002 | AP Martha Stewart's lawyers in June asked a House committee to issue a statement supporting her, an aide to the panel said Monday.
"We were stunned" by Stewart's request, said Ken Johnson, spokesman for the House Energy and Commerce Committee, which could subpoena her to determine whether she engaged in insider trading when she sold her stock in biotech company ImClone Systems Inc.
He said the domestic design tycoon, through her attorneys, asked the panel "to issue a statement in effect clearing her."
Johnson was confirming a report in Time magazine. Stewart spokeswoman Allyn Magrino in New York didn't immediately return a telephone call seeking comment Monday.
Rep. Jim Greenwood, the panel's investigative subcommittee, said Sunday that Stewart probably will be subpoenaed.
"We can't sweep something like this under the rug because Martha Stewart is a celebrity, and so I think that we're probably going to have to subpoena her," Greenwood said.
Committee investigators have been trying to resolve discrepancies between Stewart's account of the sale of nearly 4,000 shares of ImClone on Dec. 27 and those of her now-suspended Merrill Lynch broker and his assistant. The next day, the Food and Drug Administration announced it would not approve ImClone's application for a highly touted colon cancer drug. Subsequently, ImClone shares plunged.
The committee has requested documents from Stewart, including e-mails, records from her business manager and telephone records. She has been given until Aug. 20 to provide the information voluntarily.
"We made it very clear that anything we don't get we'll subpoena," Johnson said.
Referring to Stewart and her attorneys, he said, "They're trying to drag this thing out as long as possible."
The investigators also have been seeking to interview Stewart, and members of the committee have discussed the possibility of issuing a subpoena to Stewart to compel her testimony if she does not voluntarily comply, according to Johnson.
Stewart, who commands a multimedia empire as chief executive of Martha Stewart Living Omnimedia Inc., has refused to meet with the investigators.
Stewart's friend, former ImClone CEO Samuel Waksal, pleaded innocent to insider trading and other charges Monday and defended his company and its cancer drug, Erbitux.
The plea was entered in federal court in Manhattan, where Waksal had been indicted on charges of inside trading and perjury. New charges of obstruction of justice and bank fraud were filed last week.
Waksal was arrested in June on charges he secretly advised family members to sell their ImClone stock on Dec. 27 after learning that the FDA had decided to reject Erbitux.
Stewart maintains she simply had put in a standing order to sell her ImClone stock when it fell below $60. But doubt has been cast on that assertion because she and her broker, Peter Bacanovic, differ on when the order was placed.
Bacanovic's assistant, Douglas Faneuil, originally said there was such an order but has since changed his story.