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Martha's Broker Sentencing to Begin; Defense Secretary Curiously Silent

Aired July 16, 2004 - 14:28   ET

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

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


CAROL LIN, CNN ANCHOR: Now in the news: Martha Stewart's former stockbroker, Peter Bacanovic, has arrived in federal court. His sentencing is due to start right now. Now, he was convicted along with Martha Stewart on four felony counts about lying and obstructing justice related to why she sold her ImClone stock. We're going to bring you a sentence as soon as it comes down.
Martha Stewart, though, may be swapping designer clothes for prison khakis. The celebrity homemaker was sentenced to five months in prison and five months home confinement for lying about that stock sale. The sentence was stayed, pending an appeal. We're going to have reaction from her hometown in about three minutes.

And Armstrong on the attack. Five-time Tour de France winner Lance Armstrong made the move today that he hopes will lead him to a record sixth win. Now, in the first of the critical mountain stages of the race, Armstrong finished second to Italian Ivan Basso in the Pyrenees. That also moves him to second in the overall standings.

Keeping you informed, CNN, the most trusted name in news.

BETTY NGUYEN, CNN ANCHOR: As we mentioned, Martha Stewart's former stockbroker, Peter Bacanovic, is in New York at a courtroom there for sentencing, which is underway at this hour. Mary Snow is standing by outside the courthouse with the latest.

Mary, what are you hearing at this point?

MARY SNOW, CNN FINANCIAL CORRESPONDENT: Well, Betty, as you just mentioned, sentencing has just gotten underway for Peter Bacanovic. He is the former stockbroker for Martha Stewart. He, too, will be sentenced by judge Miriam Cedarbaum, and his judges are very similar to Martha Stewart: obstruction of justice, conspiracy. There's one charge against him, though, that was not leveled against Martha Stewart, is perjury.

Under the federal sentencing guideline, Bacanovic also faces 10 to 16 months, the same sentencing guidelines as Martha Stewart. And it was just a couple of days ago, actually, that the judge granted a request that Bacanovic be sentenced separately from Martha Stewart. His team had always tried to separate Bacanovic from Stewart, feeling that he was cast in her shadow and was unable to get a fair trail.

The judge had obviously rejected the request for two different trials, but on Tuesday she did grant Bacanovic this separate sentencing. So, we are expecting word, and of course, it comes just hours after Martha Stewart's sentencing takes place. And the guidelines are very similar, so it could be a similar sentence of five months in prison and five months of home confinement.

Martha Stewart's sentence, that home confinement, she would have to wear an electronic surveillance bracelet while she serves that term. She was also sentenced to two years probation and a $30,000 fine, calling this a shameful day.

And this comes on the much-anticipated sentencing for her. Her attorneys have said that they will appeal. Bacanovic's attorneys had also said after the trial and the convictions that they had planned to appeal. So, perhaps we could see a similar scenario taking place.

Betty?

NGUYEN: Mary, as we wait for this sentence, you know, when Martha went into hers earlier today, there was word that somewhere between 10 and 16 months. She came out with five months. What are you hearing in this case?

SNOW: Betty, it seems -- legal experts believe that it could be a very similar sentence, where it could be a split. Because underneath the guidelines, there is that option of house arrest and probation. So, a number of legal experts are expecting a very similar sentence.

Jeffrey Toobin, our legal analyst, was saying that perhaps it could be a little more, because Bacanovic was the stockbroker at the heart of that ImClone stock sale in 2001.

Of course, besides Martha Stewart being his famous client, Sam Waksal, the ImClone founder and CEO, of course, was Bacanovic's client. And when Waksal sold those shares a day before news about a promising cancer drug and the stock plunged, that was really the start of this whole scandal.

So, Bacanovic was that stockbroker for them both. His assistant, Doug Faneuil, by the way, was the one who became the cooperating government witness. He is due to be scheduled a week from today, and prosecutors, because of his testimony, promised him leniency -- or were trying to get him leniency, so he will be in court next Friday.

But Bacanovic and Stewart, too, a lot of talk about this recently in terms of their styles after the convictions. Bacanovic, unlike Martha Stewart, has been very low key. He was said to be kind of hunkering down with friends, not making many public appearances. That's in stark contrast to Martha Stewart, who was seen out and about in recent months since the convictions.

Betty?

NGUYEN: CNN's Mary Snow will be standing by as we wait for this sentence. Thank you, Mary.

Carol? LIN: All right, we want to talk a little bit more about the sentencing coming up and also the fairness of what Martha Stewart got today. I've got a guest joining me right now. He's a criminal defense attorney. His name is Jeffery Jacobovitz.

Jeffery, good to see you?

JEFFERY JACOBOVITZ, CRIMINAL DEFENSE ATTORNEY: Good afternoon, Carol.

LIN: Any moment now, we're waiting to hear what Peter Bacanovic is going to get. You were probably listening to Mary Snow reporting that speculation out of the courthouse by our legal experts is that he is going to get a similar sentence to Martha Stewart. What do you think?

JACOBOVITZ: That's interesting, because he initially wanted to separate himself from Martha Stewart, but now if I were his defense counsel, I would go in there and ask for the same sentence that Martha received, because it was a very lenient sentence. It was the lowest end of the guidelines, it was 10 months, split sentence of five months home detention, five months jail.

LIN: Well, do you -- is there that option? You're suggesting that his attorneys can go in and say, "Listen, we like what you gave Martha. Will you consider the same, regardless of whether you've made up your mind or not, Ms. Judge?"

JACOBOVITZ: Absolutely, they could go in there and do it. One interesting side note here, a New York paper quoted Bacanovic as saying that he's going to receive five months in jail, which is absolutely the worst thing that a defendant can do right before his sentencing, because you're essentially telling the judge -- you're almost daring the judge to give you more.

LIN: Now, he faces the same counts as Martha Stewart: four counts of obstructing justice and lying to investigators. Is he more complicit -- I mean, is the judge likely to see him as more complicit than Martha Stewart since he was the one who initiated the call to Martha Stewart, the tip for her to sell her stock?

JACOBOVITZ: The judge may deem it that he is more complicit. The other thing is, I think Martha makes a more sympathetic defendant for a judge in sentencing, based on her background and what she has done, as compared to Bacanovic's background and what he has done in his life.

LIN: More sympathetic? I've talked to some legal experts today who say that this was a completely over-the-top over-prosecution, given that if it were you or I, we would have negotiated this outside of court, we would have settled and probably paid a small fine and went on our way.

JACOBOVITZ: Well, sympathetic in terms of now she's before the court for sentencing after being convicted. That's true. She could have paid a fine and gone away if she had cooperated initially, went in, admitted what had happened was wrong, and most likely she would not be going to jail.

LIN: You know, I almost forgot about Douglas Faneuil, Peter Bacanovic's assistant who testified and helped prosecutors build their case against Martha Stewart. He is going to be facing sentencing next week.

What is he likely to face, if anything at all, given that he has cooperated so fully?

JACOBOVITZ: Right.

LIN: Prosecutors wouldn't have a case against Martha if it wasn't for his testimony.

JACOBOVITZ: He's likely to receive probation under what's called 5K1 of the sentencing guidelines. He cooperated early. He went in, he admitted what happened was wrong and -- in providing that cooperation that led to the conviction of two other people, which in the prosecutors eyes is an important thing.

And thus, I would guess that he would receive probation.

LIN: Jeffery, were you watching when Martha Stewart came out to the microphones at the courtroom steps...

JACOBOVITZ: I was.

LIN: ... and made her remarks and made her appeal for people to subscribe to her magazine. And then talking about what she personally has gone through, how she felt choked during the whole legal proceeding. How do you think that's going to affect her appeal case?

JACOBOVITZ: Well, I don't think it would have much of an impact on her appeal. The appeal would be decided on legal issues related to the alleged perjury of the witness and the jury.

LIN: So, the judge isn't going to be influenced by her -- I want to use performance, but by her statements, her emotion at the microphone today?

JACOBOVITZ: No, I don't believe so, not an appellate court. The second circuit should not be swayed by that. That is something that's more important for a trial judge who was performing a sentencing in determining whether a defendant has exhibited remorse.

LIN: Is there an indication, though, that it was a good decision on her attorney's part not to have her testify in her own defense?

JACOBOVITZ: Well, it's the toughest decision for a defense counsel to put your client on the stand or not put your client on the stand. Specifically, if your client is convicted and does not testify, they end up going to jail thinking they never got to tell their side of the story.

I think in this situation, it could be Martha is disappointed she didn't testify, because she ended up getting convicted. LIN: And she read from a prepared statement, so you think it was vetted by her attorneys.

JACOBOVITZ: I would be believe so.

LIN: All right, thank you very much, Jeffery Jacobovitz.

We're expecting Peter Bacanovic to be sentenced at any moment. We're going to bring it to our viewers as soon as it happens.

JACOBOVITZ: Thank you.

LIN: In the meantime, Martha Stewart's lawyers will be on "LARRY KING LIVE" tonight at 9:00 Eastern. You can hear their take on the sentence she received. And then, on Monday night, Martha Stewart herself will be on "LARRY KING LIVE" in her first and only live interview. Martha Stewart for the entire hour. Monday night at 9:00 Eastern, only here on CNN.

NGUYEN: Martha Stewart's sentence makes her a new member of an elite club: famous, or rather infamous, felons. We have a look back at wealth and power behind bars on the next hour of LIVE FROM.

But up next: What pulled young kids into a crossfire? A report from the place where child fatalities are among the highest in the world.

Plus: When was the last time you saw this man on television? We'll trace the whereabouts of the defense secretary when we return.

(COMMERCIAL BREAK)

(WEATHER REPORT)

(COMMERCIAL BREAK)

LIN (voice-over): All right. Live on the courthouse steps -- Peter Bacanovic, who is Martha Stewart's stockbroker -- former stockbroker, facing sentencing. It is underway at this moment. It was supposed to start 15 minutes ago. Any second now, we are expecting to hear what the sentence may be.

Legal experts are speculating he may get something similar to Martha Stewart's five months in prison, five months home imprisonment and two years probation. We shall see, and we'll bring it to you just as soon as it happens.

NGUYEN: But in the meantime, for months there, he was the loudest trumpet in the Bush administration, touting triumphs in Iraq and Afghanistan, scolding reporters and otherwise reflecting on the state of the world at large.

But now, Donald Rumsfeld seemed all but AWOL, at least from publicity. CNN's Barbara Starr has the latest from the Pentagon on the curious silence of the secretary of defense.

What's he been up to, Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Betty, he's silent when and where he wants to be.

Secretary of Defense Donald Rumsfeld certainly does have a new media strategy. For those who were addicted to those Pentagon briefing room press conferences right in this room, well, those are gone for a while. It's just like in Baghdad -- we aren't seeing any more regular military operational briefings there.

The secretary is out and about a bit. He is doing individual television and radio interviews. He did some today. But he hasn't been in this briefing room for a regularly scheduled press conference since June 17th, since before transition to Iraqi sovereignty. The last press conference in this room before that was back in May.

So, even with all of those appearances around town, he's not here. He's not talking to reporters in this press room. We asked the press office why.

Well, they readily admit that there is a bit of a new strategy now, which is with Iraqi sovereignty, they say -- the war in Iraq, the situation in Iraq, is largely an issue for the State Department, for the new embassy there, and for the Iraqi government, that Defense Secretary Don Rumsfeld is no longer the chief spokesman of the administration on the situation in Iraq. That it's all transitioned, if you will, to the embassy, to the State Department, all of that.

But, of course, there are still 140,000 U.S. troops in Iraq. There have been over 5,000 wounded, 887 troop fatalities in Iraq. So, it's still a very big story, and people will probably be watching and waiting to see the next time he has a press conference in this room.

Betty?

NGUYEN: And you know we will be watching. Thank you, Barbara Starr, from the Pentagon.

LIN: News out of the Middle East now. The Palestinian police chief has been freed after he was abducted for a short while earlier today. Militants in Gaza kidnapped the official and held him at a refugee camp.

Witnesses say he was released and taken to a hospital for a medical examination. The man was reportedly held because of his alleged involvement in corrupt activities. His kidnappers now say they expect him to be fired and investigated.

NGUYEN: Also in the Middle East: barely in their teens and on the front lines. Palestinian children are increasingly being drawn into the conflict in the Middle East. Some are caught in the crossfire; others recruited as suicide bombers. And some are just playing a deadly game of cat and mouse with Israeli soldiers.

CNN's John Vause reports on some of the conflict's youngest victims. (BEGIN VIDEOTAPE)

JOHN VAUSE, CNN CORRESPONDENT (voice-over): They're mostly young boys, armed on this day only with rocks and a child's bravado. All day long, they move slowly, closer to the Israeli tanks, throw their stones, ducking for cover, or running away, when the Israelis fire back with heavy caliber machine guns.

And so it goes. We saw young Ahmed (ph) and about 20 others here throwing stones two days in a row.

"It was just for fun," he told me. "Ambulance crews are never far away."

UNIDENTIFIED MALE (through translator): Even if we wanted to stop them from coming, we wouldn't be able to do so.

VAUSE: And then it happens. One of the boys is shot, rushed to a nearby hospital. A bullet has smashed the pelvis of 13-year-old Mohammed Abu Dahair (ph). A major artery has been hit, he's losing blood, his condition serious. His friends wait outside. "Mohammed (ph)," they say, "was not throwing stones." Regardless, his doctor says he's seen this so many times before.

DR. RIAD ADASSI, PALESTINIAN DOCTOR: They go there and they know that they're going to face death. That's security (ph).

VAUSE: Mohammed's (ph) distraught mother tells me she had no idea her son was with the boys who were throwing stones at the tanks. If she'd known, she says, she would have stopped him. Mohammed (ph) survives, but his wounds will last a lifetime.

DR. JAMAL EL-SAQAA, PALESTINIAN DOCTOR: He will suffer all his life from limping, and he will suffer from pain. I don't think he will run as usual child runs.

VAUSE: So, why can't parents here just keep their children inside, away from the tanks and the gunfire?

DR. EYAD SARRAJ, CHILD PSYCHOLOGIST: This is a form of rebellion against not only the Israelis, but sometimes against the role of the father. Many children have seen their fathers beaten. They have seen children killed when the father was so helpless, unable to protect them.

VAUSE: Israel says it only fires warning shots at the stone- throwing children, but the rules of engagement change when anyone, regardless of age, approaches a tank or armored vehicle. In the past, young teens have been recruited as suicide bombers or used as human shields.

Now, Israeli soldiers are under strict orders to stop them from even getting close.

MAJ. SHARON FEINGOLD, ISRAELI ARMY: Such a young child, who can climb such a vehicle, can easily hurl hand grenades inside that vehicle and kill all of the crew that is inside that vehicle.

VAUSE (on camera): Here, it's never far from the front door to the front lines. And in almost four years of fighting, the Palestinian Authority says, in Gaza alone, more than 300 children have been killed.

(voice-over): But for many young boys in Gaza, this is a way to prove they're men. But often, they just die as children.

John Vause, CNN, Gaza.

(END VIDEOTAPE)

LIN: Once again, a live picture out at the courthouse steps, the federal courthouse in New York, where any second now we are going to hear the sentencing of Peter Bacanovic in his role in the Martha Stewart criminal case. We'll bring it to you as soon as we get it, so stay tuned.

(COMMERCIAL BREAK)

NGUYEN: Here is another live look at the courthouse in New York City where Peter Bacanovic will be sentenced -- or is being sentenced at this moment. In fact, we had expected it would have happened by now, but we are standing by, waiting. We'll bring that to you live when it happens.

LIN: That's interesting. There may be some negotiations going on in the courtroom, just like Jeffery Jacobovitz was saying.

NGUYEN: Some were saying that he was, yes, going to get the same as Martha, but that happened so quickly. This is taking a little more time, so it'll be interesting to see how it all plays out.

LIN: Worth waiting for.

In the meantime, we have been asking the viewers to e-mail us, let us know what you think about Martha Stewart's sentencing, whether it was fair or not.

And this is what we heard from Lyzette from British Columbia, Canada. She says: "First of all, I think lying is not a moral thing to do, especially if you're a celebrity. I actually think that the sentencing is very lenient and that she gets away easy. I am just disappointed in her because she did not admit that she is responsible for everything. She seemed not upset or remorse," I think she means remorseful, "during her interview after the sentencing. I thought that she doesn't care for what she's done. I believe that she should admit that she is wrong and she is responsible."

NGUYEN: Dietrich, from Longview, Texas, has this to say: "How unfortunate -- when you're punished for being a successful businesswoman and vocal liberal."

LIN: Well, I don't know about that. Anyway, Robert writes, Martha Stewart has had more of a loss in business revenue and court costs than even a fine would have. Five months in jail time serves nothing other than more cost for us stakeholders. One-thousand hours of community service for the poor would be better."

NGUYEN: And Mary from New York writes: "It's a travesty what has happened to Martha Stewart, with people like Ken Lay still walking around, free in society." And mentions, by the way, "Ken Lay also happens to be in George W. Bush's '$100,000 Club.' Making Martha an example is ridiculous," Mary says.

"Martha got five months for lying to federal officers. It had nothing to do with allegations of insider trading. Most people don't realize that, and perhaps if they did, and perhaps if the media did a better job of contrasting her situation with those of people like Ken Lay, then the public would be better informed and start to know how their government is duping them."

LIN: Martin says it in one sentence, "Now, the only thing left to do is to sell the rights to the book, and that would be a good thing."

NGUYEN: I knew that good thing would come at some point in all of this.

LIN: That would be a good thing, yes.

NGUYEN: Well, Medicare is changing its stance on what has become a billion-dollar problem in America.

(MARKET UPDATE)

LIN: Well, Peter Bacanovic's sentencing continues. We're going to go back to the courthouse in the next hour for the latest from there. Any moment now -- and I know I've been telling you that for a while, it's a bit of a mystery. He was supposed to be sentenced at 3:30. It's taking a little bit longer. It adds to the story.

(COMMERCIAL BREAK)

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Aired July 16, 2004 - 14:28   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL LIN, CNN ANCHOR: Now in the news: Martha Stewart's former stockbroker, Peter Bacanovic, has arrived in federal court. His sentencing is due to start right now. Now, he was convicted along with Martha Stewart on four felony counts about lying and obstructing justice related to why she sold her ImClone stock. We're going to bring you a sentence as soon as it comes down.
Martha Stewart, though, may be swapping designer clothes for prison khakis. The celebrity homemaker was sentenced to five months in prison and five months home confinement for lying about that stock sale. The sentence was stayed, pending an appeal. We're going to have reaction from her hometown in about three minutes.

And Armstrong on the attack. Five-time Tour de France winner Lance Armstrong made the move today that he hopes will lead him to a record sixth win. Now, in the first of the critical mountain stages of the race, Armstrong finished second to Italian Ivan Basso in the Pyrenees. That also moves him to second in the overall standings.

Keeping you informed, CNN, the most trusted name in news.

BETTY NGUYEN, CNN ANCHOR: As we mentioned, Martha Stewart's former stockbroker, Peter Bacanovic, is in New York at a courtroom there for sentencing, which is underway at this hour. Mary Snow is standing by outside the courthouse with the latest.

Mary, what are you hearing at this point?

MARY SNOW, CNN FINANCIAL CORRESPONDENT: Well, Betty, as you just mentioned, sentencing has just gotten underway for Peter Bacanovic. He is the former stockbroker for Martha Stewart. He, too, will be sentenced by judge Miriam Cedarbaum, and his judges are very similar to Martha Stewart: obstruction of justice, conspiracy. There's one charge against him, though, that was not leveled against Martha Stewart, is perjury.

Under the federal sentencing guideline, Bacanovic also faces 10 to 16 months, the same sentencing guidelines as Martha Stewart. And it was just a couple of days ago, actually, that the judge granted a request that Bacanovic be sentenced separately from Martha Stewart. His team had always tried to separate Bacanovic from Stewart, feeling that he was cast in her shadow and was unable to get a fair trail.

The judge had obviously rejected the request for two different trials, but on Tuesday she did grant Bacanovic this separate sentencing. So, we are expecting word, and of course, it comes just hours after Martha Stewart's sentencing takes place. And the guidelines are very similar, so it could be a similar sentence of five months in prison and five months of home confinement.

Martha Stewart's sentence, that home confinement, she would have to wear an electronic surveillance bracelet while she serves that term. She was also sentenced to two years probation and a $30,000 fine, calling this a shameful day.

And this comes on the much-anticipated sentencing for her. Her attorneys have said that they will appeal. Bacanovic's attorneys had also said after the trial and the convictions that they had planned to appeal. So, perhaps we could see a similar scenario taking place.

Betty?

NGUYEN: Mary, as we wait for this sentence, you know, when Martha went into hers earlier today, there was word that somewhere between 10 and 16 months. She came out with five months. What are you hearing in this case?

SNOW: Betty, it seems -- legal experts believe that it could be a very similar sentence, where it could be a split. Because underneath the guidelines, there is that option of house arrest and probation. So, a number of legal experts are expecting a very similar sentence.

Jeffrey Toobin, our legal analyst, was saying that perhaps it could be a little more, because Bacanovic was the stockbroker at the heart of that ImClone stock sale in 2001.

Of course, besides Martha Stewart being his famous client, Sam Waksal, the ImClone founder and CEO, of course, was Bacanovic's client. And when Waksal sold those shares a day before news about a promising cancer drug and the stock plunged, that was really the start of this whole scandal.

So, Bacanovic was that stockbroker for them both. His assistant, Doug Faneuil, by the way, was the one who became the cooperating government witness. He is due to be scheduled a week from today, and prosecutors, because of his testimony, promised him leniency -- or were trying to get him leniency, so he will be in court next Friday.

But Bacanovic and Stewart, too, a lot of talk about this recently in terms of their styles after the convictions. Bacanovic, unlike Martha Stewart, has been very low key. He was said to be kind of hunkering down with friends, not making many public appearances. That's in stark contrast to Martha Stewart, who was seen out and about in recent months since the convictions.

Betty?

NGUYEN: CNN's Mary Snow will be standing by as we wait for this sentence. Thank you, Mary.

Carol? LIN: All right, we want to talk a little bit more about the sentencing coming up and also the fairness of what Martha Stewart got today. I've got a guest joining me right now. He's a criminal defense attorney. His name is Jeffery Jacobovitz.

Jeffery, good to see you?

JEFFERY JACOBOVITZ, CRIMINAL DEFENSE ATTORNEY: Good afternoon, Carol.

LIN: Any moment now, we're waiting to hear what Peter Bacanovic is going to get. You were probably listening to Mary Snow reporting that speculation out of the courthouse by our legal experts is that he is going to get a similar sentence to Martha Stewart. What do you think?

JACOBOVITZ: That's interesting, because he initially wanted to separate himself from Martha Stewart, but now if I were his defense counsel, I would go in there and ask for the same sentence that Martha received, because it was a very lenient sentence. It was the lowest end of the guidelines, it was 10 months, split sentence of five months home detention, five months jail.

LIN: Well, do you -- is there that option? You're suggesting that his attorneys can go in and say, "Listen, we like what you gave Martha. Will you consider the same, regardless of whether you've made up your mind or not, Ms. Judge?"

JACOBOVITZ: Absolutely, they could go in there and do it. One interesting side note here, a New York paper quoted Bacanovic as saying that he's going to receive five months in jail, which is absolutely the worst thing that a defendant can do right before his sentencing, because you're essentially telling the judge -- you're almost daring the judge to give you more.

LIN: Now, he faces the same counts as Martha Stewart: four counts of obstructing justice and lying to investigators. Is he more complicit -- I mean, is the judge likely to see him as more complicit than Martha Stewart since he was the one who initiated the call to Martha Stewart, the tip for her to sell her stock?

JACOBOVITZ: The judge may deem it that he is more complicit. The other thing is, I think Martha makes a more sympathetic defendant for a judge in sentencing, based on her background and what she has done, as compared to Bacanovic's background and what he has done in his life.

LIN: More sympathetic? I've talked to some legal experts today who say that this was a completely over-the-top over-prosecution, given that if it were you or I, we would have negotiated this outside of court, we would have settled and probably paid a small fine and went on our way.

JACOBOVITZ: Well, sympathetic in terms of now she's before the court for sentencing after being convicted. That's true. She could have paid a fine and gone away if she had cooperated initially, went in, admitted what had happened was wrong, and most likely she would not be going to jail.

LIN: You know, I almost forgot about Douglas Faneuil, Peter Bacanovic's assistant who testified and helped prosecutors build their case against Martha Stewart. He is going to be facing sentencing next week.

What is he likely to face, if anything at all, given that he has cooperated so fully?

JACOBOVITZ: Right.

LIN: Prosecutors wouldn't have a case against Martha if it wasn't for his testimony.

JACOBOVITZ: He's likely to receive probation under what's called 5K1 of the sentencing guidelines. He cooperated early. He went in, he admitted what happened was wrong and -- in providing that cooperation that led to the conviction of two other people, which in the prosecutors eyes is an important thing.

And thus, I would guess that he would receive probation.

LIN: Jeffery, were you watching when Martha Stewart came out to the microphones at the courtroom steps...

JACOBOVITZ: I was.

LIN: ... and made her remarks and made her appeal for people to subscribe to her magazine. And then talking about what she personally has gone through, how she felt choked during the whole legal proceeding. How do you think that's going to affect her appeal case?

JACOBOVITZ: Well, I don't think it would have much of an impact on her appeal. The appeal would be decided on legal issues related to the alleged perjury of the witness and the jury.

LIN: So, the judge isn't going to be influenced by her -- I want to use performance, but by her statements, her emotion at the microphone today?

JACOBOVITZ: No, I don't believe so, not an appellate court. The second circuit should not be swayed by that. That is something that's more important for a trial judge who was performing a sentencing in determining whether a defendant has exhibited remorse.

LIN: Is there an indication, though, that it was a good decision on her attorney's part not to have her testify in her own defense?

JACOBOVITZ: Well, it's the toughest decision for a defense counsel to put your client on the stand or not put your client on the stand. Specifically, if your client is convicted and does not testify, they end up going to jail thinking they never got to tell their side of the story.

I think in this situation, it could be Martha is disappointed she didn't testify, because she ended up getting convicted. LIN: And she read from a prepared statement, so you think it was vetted by her attorneys.

JACOBOVITZ: I would be believe so.

LIN: All right, thank you very much, Jeffery Jacobovitz.

We're expecting Peter Bacanovic to be sentenced at any moment. We're going to bring it to our viewers as soon as it happens.

JACOBOVITZ: Thank you.

LIN: In the meantime, Martha Stewart's lawyers will be on "LARRY KING LIVE" tonight at 9:00 Eastern. You can hear their take on the sentence she received. And then, on Monday night, Martha Stewart herself will be on "LARRY KING LIVE" in her first and only live interview. Martha Stewart for the entire hour. Monday night at 9:00 Eastern, only here on CNN.

NGUYEN: Martha Stewart's sentence makes her a new member of an elite club: famous, or rather infamous, felons. We have a look back at wealth and power behind bars on the next hour of LIVE FROM.

But up next: What pulled young kids into a crossfire? A report from the place where child fatalities are among the highest in the world.

Plus: When was the last time you saw this man on television? We'll trace the whereabouts of the defense secretary when we return.

(COMMERCIAL BREAK)

(WEATHER REPORT)

(COMMERCIAL BREAK)

LIN (voice-over): All right. Live on the courthouse steps -- Peter Bacanovic, who is Martha Stewart's stockbroker -- former stockbroker, facing sentencing. It is underway at this moment. It was supposed to start 15 minutes ago. Any second now, we are expecting to hear what the sentence may be.

Legal experts are speculating he may get something similar to Martha Stewart's five months in prison, five months home imprisonment and two years probation. We shall see, and we'll bring it to you just as soon as it happens.

NGUYEN: But in the meantime, for months there, he was the loudest trumpet in the Bush administration, touting triumphs in Iraq and Afghanistan, scolding reporters and otherwise reflecting on the state of the world at large.

But now, Donald Rumsfeld seemed all but AWOL, at least from publicity. CNN's Barbara Starr has the latest from the Pentagon on the curious silence of the secretary of defense.

What's he been up to, Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Betty, he's silent when and where he wants to be.

Secretary of Defense Donald Rumsfeld certainly does have a new media strategy. For those who were addicted to those Pentagon briefing room press conferences right in this room, well, those are gone for a while. It's just like in Baghdad -- we aren't seeing any more regular military operational briefings there.

The secretary is out and about a bit. He is doing individual television and radio interviews. He did some today. But he hasn't been in this briefing room for a regularly scheduled press conference since June 17th, since before transition to Iraqi sovereignty. The last press conference in this room before that was back in May.

So, even with all of those appearances around town, he's not here. He's not talking to reporters in this press room. We asked the press office why.

Well, they readily admit that there is a bit of a new strategy now, which is with Iraqi sovereignty, they say -- the war in Iraq, the situation in Iraq, is largely an issue for the State Department, for the new embassy there, and for the Iraqi government, that Defense Secretary Don Rumsfeld is no longer the chief spokesman of the administration on the situation in Iraq. That it's all transitioned, if you will, to the embassy, to the State Department, all of that.

But, of course, there are still 140,000 U.S. troops in Iraq. There have been over 5,000 wounded, 887 troop fatalities in Iraq. So, it's still a very big story, and people will probably be watching and waiting to see the next time he has a press conference in this room.

Betty?

NGUYEN: And you know we will be watching. Thank you, Barbara Starr, from the Pentagon.

LIN: News out of the Middle East now. The Palestinian police chief has been freed after he was abducted for a short while earlier today. Militants in Gaza kidnapped the official and held him at a refugee camp.

Witnesses say he was released and taken to a hospital for a medical examination. The man was reportedly held because of his alleged involvement in corrupt activities. His kidnappers now say they expect him to be fired and investigated.

NGUYEN: Also in the Middle East: barely in their teens and on the front lines. Palestinian children are increasingly being drawn into the conflict in the Middle East. Some are caught in the crossfire; others recruited as suicide bombers. And some are just playing a deadly game of cat and mouse with Israeli soldiers.

CNN's John Vause reports on some of the conflict's youngest victims. (BEGIN VIDEOTAPE)

JOHN VAUSE, CNN CORRESPONDENT (voice-over): They're mostly young boys, armed on this day only with rocks and a child's bravado. All day long, they move slowly, closer to the Israeli tanks, throw their stones, ducking for cover, or running away, when the Israelis fire back with heavy caliber machine guns.

And so it goes. We saw young Ahmed (ph) and about 20 others here throwing stones two days in a row.

"It was just for fun," he told me. "Ambulance crews are never far away."

UNIDENTIFIED MALE (through translator): Even if we wanted to stop them from coming, we wouldn't be able to do so.

VAUSE: And then it happens. One of the boys is shot, rushed to a nearby hospital. A bullet has smashed the pelvis of 13-year-old Mohammed Abu Dahair (ph). A major artery has been hit, he's losing blood, his condition serious. His friends wait outside. "Mohammed (ph)," they say, "was not throwing stones." Regardless, his doctor says he's seen this so many times before.

DR. RIAD ADASSI, PALESTINIAN DOCTOR: They go there and they know that they're going to face death. That's security (ph).

VAUSE: Mohammed's (ph) distraught mother tells me she had no idea her son was with the boys who were throwing stones at the tanks. If she'd known, she says, she would have stopped him. Mohammed (ph) survives, but his wounds will last a lifetime.

DR. JAMAL EL-SAQAA, PALESTINIAN DOCTOR: He will suffer all his life from limping, and he will suffer from pain. I don't think he will run as usual child runs.

VAUSE: So, why can't parents here just keep their children inside, away from the tanks and the gunfire?

DR. EYAD SARRAJ, CHILD PSYCHOLOGIST: This is a form of rebellion against not only the Israelis, but sometimes against the role of the father. Many children have seen their fathers beaten. They have seen children killed when the father was so helpless, unable to protect them.

VAUSE: Israel says it only fires warning shots at the stone- throwing children, but the rules of engagement change when anyone, regardless of age, approaches a tank or armored vehicle. In the past, young teens have been recruited as suicide bombers or used as human shields.

Now, Israeli soldiers are under strict orders to stop them from even getting close.

MAJ. SHARON FEINGOLD, ISRAELI ARMY: Such a young child, who can climb such a vehicle, can easily hurl hand grenades inside that vehicle and kill all of the crew that is inside that vehicle.

VAUSE (on camera): Here, it's never far from the front door to the front lines. And in almost four years of fighting, the Palestinian Authority says, in Gaza alone, more than 300 children have been killed.

(voice-over): But for many young boys in Gaza, this is a way to prove they're men. But often, they just die as children.

John Vause, CNN, Gaza.

(END VIDEOTAPE)

LIN: Once again, a live picture out at the courthouse steps, the federal courthouse in New York, where any second now we are going to hear the sentencing of Peter Bacanovic in his role in the Martha Stewart criminal case. We'll bring it to you as soon as we get it, so stay tuned.

(COMMERCIAL BREAK)

NGUYEN: Here is another live look at the courthouse in New York City where Peter Bacanovic will be sentenced -- or is being sentenced at this moment. In fact, we had expected it would have happened by now, but we are standing by, waiting. We'll bring that to you live when it happens.

LIN: That's interesting. There may be some negotiations going on in the courtroom, just like Jeffery Jacobovitz was saying.

NGUYEN: Some were saying that he was, yes, going to get the same as Martha, but that happened so quickly. This is taking a little more time, so it'll be interesting to see how it all plays out.

LIN: Worth waiting for.

In the meantime, we have been asking the viewers to e-mail us, let us know what you think about Martha Stewart's sentencing, whether it was fair or not.

And this is what we heard from Lyzette from British Columbia, Canada. She says: "First of all, I think lying is not a moral thing to do, especially if you're a celebrity. I actually think that the sentencing is very lenient and that she gets away easy. I am just disappointed in her because she did not admit that she is responsible for everything. She seemed not upset or remorse," I think she means remorseful, "during her interview after the sentencing. I thought that she doesn't care for what she's done. I believe that she should admit that she is wrong and she is responsible."

NGUYEN: Dietrich, from Longview, Texas, has this to say: "How unfortunate -- when you're punished for being a successful businesswoman and vocal liberal."

LIN: Well, I don't know about that. Anyway, Robert writes, Martha Stewart has had more of a loss in business revenue and court costs than even a fine would have. Five months in jail time serves nothing other than more cost for us stakeholders. One-thousand hours of community service for the poor would be better."

NGUYEN: And Mary from New York writes: "It's a travesty what has happened to Martha Stewart, with people like Ken Lay still walking around, free in society." And mentions, by the way, "Ken Lay also happens to be in George W. Bush's '$100,000 Club.' Making Martha an example is ridiculous," Mary says.

"Martha got five months for lying to federal officers. It had nothing to do with allegations of insider trading. Most people don't realize that, and perhaps if they did, and perhaps if the media did a better job of contrasting her situation with those of people like Ken Lay, then the public would be better informed and start to know how their government is duping them."

LIN: Martin says it in one sentence, "Now, the only thing left to do is to sell the rights to the book, and that would be a good thing."

NGUYEN: I knew that good thing would come at some point in all of this.

LIN: That would be a good thing, yes.

NGUYEN: Well, Medicare is changing its stance on what has become a billion-dollar problem in America.

(MARKET UPDATE)

LIN: Well, Peter Bacanovic's sentencing continues. We're going to go back to the courthouse in the next hour for the latest from there. Any moment now -- and I know I've been telling you that for a while, it's a bit of a mystery. He was supposed to be sentenced at 3:30. It's taking a little bit longer. It adds to the story.

(COMMERCIAL BREAK)

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