Return to Transcripts main page

CNN Live Today

Martha Stewart Faces Document Deadline

Aired August 20, 2002 - 12:16   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

CAROL LIN, CNN ANCHOR: This is the deadline for Martha Stewart to hand over papers concerning her sale of ImClone stock. Lawmakers want to know if Stewart was tipped off to bad news about the company.
CNN's Tim O'Brien joins us from Washington with the latest on that.

Is she going to have to testify -- Tim?

TIM O'BRIEN, CNN CORRESPONDENT: She may. It's a very close question. I think that the likelihood is that she will.

She has already turned over many telephone and other records to the House Energy and Commerce Committee. That's the committee looking into her sale of ImClone stock and the sale of stock by the company's former CEO, Sam Waksal. It, of course, all happened just before the stock took a huge nose dive last December.

The committee is interested in learning not only whether Ms. Stewart had insider information, but also whether she may have made material misrepresentations about what she knew about the stock and when she knew it.

The committee expects that Ms. Stewart will comply with this order to produce the remaining documents by today's deadline. As of this morning, she has not.

But even if she does, that's not likely to be the end of it. She, her broker and her broker's assistant appear to have conflicting accounts of the timing of the stock sales. As a result, the committee may subpoena her to testify personally.

A senior member of the committee, Representative James Greenwood, interviewed on CNN this morning, says Ms. Stewart's lawyers have resisted committee invitations to have her testify voluntarily.

(BEGIN VIDEO CLIP)

REP. JAMES GREENWOOD (R), PENNSYLVANIA: She is entitled to the presumption of innocence. The thing that I have a difficult time reconciling is if, in fact, she is as innocent as she has claimed in June, why on earth would she go through all of this, having her company lose two-thirds of its value, her personal fortune being diminished significantly, when all she needs to do is come forward and explain what happened?

(END VIDEO CLIP) O'BRIEN: Now, if subpoenaed, Ms. Stewart could still assert her Fifth Amendment right against self-incrimination and not testify, although that could be even more damaging to the stock price of her already-hurting company.

The committee is also turning up the heat on Ms. Stewart's friend, former ImClone CEO, Sam Waksal. The committee has sent a letter to Waksal's brother, Harland, the current CEO, wanting assurances that no records of information concerning committee requests were destroyed. Sam Waksal already has been indicted on charges of securities fraud, bank fraud and perjury.

The committee in this letter said it had grave concerns that Mr. Waksal and others at the company acted to thwart their investigation and misled committee investigators. The committee spokesman, Ken Johnson, tells CNN the committee expects to ask the Justice Department to charge Waksal with yet another count of perjury for allegedly lying to Congress -- Carol.

LIN: All right, thank you very much, Tim O'Brien.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.