Martha Stewart will have to live in suspense until Tuesday. That’s when the House Energy and Commerce Committee, which has been investigating the suspicious timing of her sale of ImClone stock last December, will decide whether to subpoena her to appear before Congress.
”We have reached the end of the road with respect to Martha Stewart,” says committee spokesman Ken Johnson. ”We have given Ms. Stewart every opportunity to meet with our investigators voluntarily, and she has refused all of our overtures. As a result, we are left with few choices.”
Johnson says committee Chairman Billy Tauzin, R-La., has made his decision on what course of action to take, but due to legal technicalities, he won’t announce that decision until Tuesday. His options:
Drop the investigation. This scenario is unlikely. Johnson says committee members believe that someone has been lying to them about why Stewart sold her ImClone stock on Dec. 27, the day before the Food and Drug Administration issued a negative ruling that sent the stock plunging.
File a report to the Justice Department documenting everything the committee knows about Stewart’s sale of ImClone stock and let prosecutors decide what to do.
Make a specific criminal referral to the Justice Department, recommending that prosecutors go after Stewart either on charges of inside trading or for giving a false statement.
Subpoena Stewart, compelling her to appear before Congress.
To some legal observers, the last scenario is most likely. Earlier hearings into accounting scandals at Enron and WorldCom have allowed committee members to appear on TV in the role of dogged investigators, working to expose corporate wrongdoers.
”In this climate, members of Congress are champing at the bit to make a criminal referral,” says Jacob Frenkel, a former federal prosecutor. ”But they’re not on the clock to make a criminal referral. They can issue a subpoena, and if they remain unsatisfied, then they can make their referral.”