Mar 15, 2004
After the conviction of Martha Stewart and her Merrill Lynch broker, Peter Bacanovic, U.S. Attorney David Kelley declared, "Let this case send an important message: We will not tolerate any sort of corruption in an official proceeding.... We are going to go after you."
That is what the government wants people to believe. But the trial of Martha Stewart, along with a few other prosecutions of usually lower or middle level executives and a couple of CEO's, does not begin to touch even a small part of the loss of countless jobs, the extensive losses in millions of people's pension accounts, the huge skimming operations in the mutual fund industry, and so on. No, the government has not gone after the very well-connected Ken Lay of Enron, who is so very close to the Bush family, nor the executives who run the biggest banks and financial companies, like Citicorp, Merrill Lynch and Morgan Stanley, which are up to their necks in each and every one of these scandals to their own great profit.
The government has left these mammoth companies, run by the great captains of finance, free to continue as before – with the government studiously looking the other way.
The Martha Stewart trial was little more than a diversion, a diversion that the government went to great lengths to put together. For prosecutors never even charged Stewart with the underlying crime, insider trading. It only charged her with conspiracy and obstruction of justice – that is misleading and conspiring to mislead the government – when investigators interviewed her. In other words, according to the law, the government does not have to charge someone with an actual crime, but it can still charge that person with "obstruction" and "conspiracy," which can consist of a slip of the tongue in an informal interview, or merely protesting your innocence and defending yourself.
Of course, we shouldn't cry for Martha. First of all, she undoubtedly benefitted from her ties with very wealthy friends and associates. Second, she's not going to do hard time. But it is interesting to note that Stewart's conviction on such flimsy charges led many in the press to question whether this kind of prosecution was fair or just – which they happened to notice only because the government usually doesn't carry out those kinds of tactics against really privileged people like Stewart and her broker.
This just means that some in the news media were shocked that the government – using a few of its tactics that it often uses against Communists, trade unionists, black militants, or anti-war activists when it wants to get them – now used these tactics against one of their own.