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Martha's 'Shameful Day'; McCain & Cheney Campaign in Michigan

Aired July 16, 2004 - 13:00   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.


(BEGIN VIDEO CLIP)
MARTHA STEWART: I'm used to all kinds of hard work, as you know, and I'm not afraid, I'm not afraid whatsoever. I'm just very, very sorry that it's come to this.

(END VIDEO CLIP)

CAROL LIN, CNN ANCHOR: It has come to a prison sentence for Martha Stewart. This hour, what she had to say, where she goes from here, and how will she keep her company going?

ALLAN CHERNOFF, CNN SR. FINANCIAL CORRESPONDENT: I'm Allan Chernoff, live in front of the federal courthouse in New York City. Martha Stewart get the minimum sentence for her part in lying about the sale of ImClone stock. We'll have the details coming up on LIVE FROM...

BETTY NGUYEN, CNN ANCHOR: Explosive wildfires, homes destroyed, and firefighters hoping for a break. We're LIVE FROM... Carson City, Nevada.

LIN: Wow. Robot reality check. They go on the attack in a new movie starting today. But will they ever be that smart in real life?

From the CNN Center in Atlanta, I'm Carol Lin. Miles and Kyra are off today.

NGUYEN: And I'm Betty Nguyen. CNN's LIVE FROM... starts right now. Up first this hour, Martha Stewart's shame, her company's gain. As you know, if you've been watching CNN, the homemaking maven deemed this a "shameful day," as federal prosecutors and the judge sentence her to five-month sentence in prison for lying to the government about a stock sale in 2000. But stock in her own company, Martha Stewart Living Omnimedia, soared as investors let out a sigh of relief that the sentence wasn't worse.

Stewart never spoke during her trial, but she talked to the judge this morning and then she talked to reporters.

(BEGIN VIDEO CLIP)

STEWART: Today is a shameful day. It's shameful for me and for my family and for my beloved company and for all its employees and partners. What was a small personal matter came over -- became over the last two years an almost fatal circus event of unprecedented proportions. I have been choked and almost suffocated to death during that time, all the while, more concerned about the well being of others than for myself. More hurt for them and for their losses than for my own. More worried for their futures than the future of Martha Stewart, the person.

More than 200 people have lost their jobs at my company and -- as a result of this situation. I want them to know how very, very sorry I am for them and their families. I would like to thank everybody who stood by me, who wished me well, waved to me on street, like these lovely people over here, smiled at me, called me, wrote to me.

We received thousands of support letters and more than 170,000 e- mails to marthatalks.com. And I appreciate each and every one of those pieces of correspondence. I really feel good about it. Perhaps all of you out there can continue to show your support by subscribing to our magazine, by buying our products, by encouraging our advertisers to come back in full force to our magazines. Our magazines are great.

They deserve your support. And whatever happened to me personally shouldn't have any affect whatsoever on the great company Martha Stewart Living Omnimedia. And I don't want to use this as a sales pitch for my company, but we love that company. We've worked so hard on that company. And we really think it merits great attention from the American public.

And I'll be back. I will be back. Whatever I have to do in the next few months, I hope the months go by quickly. I'm used to all kinds of hard work, as you know. And I'm not afraid. I'm not afraid whatsoever. I'm just very, very sorry that it has come to this, that a small, personal matter has been able to be blown out of all proportion, and with such venom and such gore. I mean, it's just terrible.

(END VIDEO CLIP)

NGUYEN: Stewart's sentence is on hold while she pursues her appeal. And we get more on the crimes and punishment from CNN's Allan Chernoff.

Hi, Allan.

CHERNOFF: Hi, Betty. Well, Martha Stewart did receive the minimum sentence that she could have gotten under the federal guidelines, five months in prison, five months of home detention, two years of probation, and a fine of $30,000. Martha Stewart didn't show any dramatic response upon hearing that sentence, but after the entire proceeding, she did indicate a little bit of relief. She gave a little smile to her daughter, Alexis, and gave her a kiss right afterwards.

The dramatic high point, certainly, was Martha Stewart reading from a prepared statement in court, asking the judge to consider all of her good works, all of her contributions. She said to the judge, I want to continue serving my country, and she also asked the judge not to allow her life to be destroyed. Judge Miriam Cedarbaum did indicate some sympathy. She said: "You have suffered and you will continue to suffer enough." She also said that she had read each and every one of more than 1500 letters that had been submitted to the court on Martha Stewart's behalf.

Now Martha Stewart, as you said, is going to be appealing this verdict. Her legal team has 10 days in which to appeal and the sentence is being stayed until that appeal has concluded -- Betty.

NGUYEN: Allan, any indication why the attorneys didn't decide to appeal immediately today?

CHERNOFF: No immediate indication of that. I did speak to the public relations folks for Martha Stewart. And they basically felt that there was no rush, that it can all be accomplished within the next 10 days easily. So I think next week we can look for that.

And we certainly did hear a preview of the plan to appeal from Martha Stewart's newest attorney, Walter Dellinger, and he will be basically repeating some of the same arguments that Robert Morvillo, Martha Stewart's other attorney, has been making thus far, complaining about alleged perjury that occurred during the case -- Betty.

NGUYEN: CNN's Allan Chernoff, thank you -- Carol.

LIN: Well, Betty, exactly when Martha Stewart will start her sentence is anybody's guess. But where she'll report to is a little more certain. Stewart's lawyers are requesting and the judge agreed to recommend the minimum security federal pen in Danbury, Connecticut, that's only about 20 miles from Stewart's digs in Westport.

But for whatever reason, she's choosing to serve her home confinement in Bedford, New York. Now the majority of Danbury's inmates are drug offenders. All of them spend about 7 1/2 hours a day doing manual labor. They do get paid, but not exactly the $673 an hour Stewart made on average in 2003. In prison, her hourly wage will be between 12 cents and 40 cents.

Martha Stewart will sit down with CNN's Larry King Monday for her first and only live interview since her sentencing, so be sure to tune in at 9 Eastern for that.

NGUYEN: Now off to Westport, where Stewart's friends and neighbors along with her foes and critics have plenty to say about her sentence. CNN's Alina Cho is listening.

And Alina, what are they saying.

ALINA CHO, CNN CORRESPONDENT: Well, people here, Betty, are pretty evenly divided. Martha Stewart has called Westport, Connecticut, her home for more than 30 years. Remember that this is where she started her catering business more than 30 years ago in the mid-1970s, which gave rise to her one-woman empire. It is also, you'll remember, where she taped her popular television show.

We're here on Main Street, which is really the center of town, and we have talked to a lot of people and they seem to be, as I mentioned, evenly divided, evenly split on how they feel about Martha Stewart's sentence. We have found two such people, very interesting people I might add, Esta (ph) and Nancy (ph).

Esta, you actually worked at the book shop where she had the first book signing for her first book, "Entertaining."

UNIDENTIFIED FEMALE: ... the remarkable book shop in Westport. Everybody knew it. It was the landmark. We gave her the first signing for her book called "Entertaining." I think it came out in 1982.

CHO: You think she's being unfairly targeted because she's a celebrity?

UNIDENTIFIED FEMALE: Yes, I do. I don't think she deserves to do any jail time. A lot of people lie and get away with it. Somehow they're focusing on her. I think it's unfair. Besides she's given a lot of jobs to a lot of people, she's done a lot of good things.

CHO: Right, in addition to her home, she also owned a television studio here.

UNIDENTIFIED FEMALE: Exactly, yes.

CHO: And Nancy, you remember Martha Stewart when she first started her catering business here, you had just moved here.

UNIDENTIFIED FEMALE: We had moved here and it was a pretty well- known catering business in town. We would see her around town a lot at parties. And as she got more and more successful she was a little less approachable but she was still much a part of the community here.

CHO: And you believe that she did the crime, she should do the time.

UNIDENTIFIED FEMALE: Absolutely. Think five months is not too severe. I think it's probably a good amount of time. I think -- not that she should be used as an example, but I think what she did was illegal and she should pay the price for that and hopefully be a little humbled by it and also help some other people realize that lying just isn't the right thing to do especially when you're in the public eye.

CHO: We were talking a little bit about the rift that she had with the neighbors here. Some of them had complained about her being loud during the taping of her television show. She later wrote about how she felt Westport had lost its neighborly-ness. There are still some neighbors who are a bit angry right.

UNIDENTIFIED FEMALE: There are. Again, I think the community is mixed on her as a neighbor. There was a lot of talk at one point that she was going to leave town. She actually wrote an article about that. And in one of the stores in town they actually had a board where you could sign if you were for her leaving town or against her. And it was very much mixed, like it is now. I think -- you know, she does polarize people in a way, but she has done some wonderful things. So we feel -- she's still a Westport native and we're proud of her in a lot of ways.

CHO: Still spends a lot of time here. Nancy, Esta, thank you very much.

As I mentioned, Betty, of course, Martha Stewart does have several homes. She still does call Westport, Connecticut, her home. it was a sleepy town, or it was a sleepy town at least, until Martha Stewart moved here. It is also home, we should mention, to such stars as Paul Newman, Phil Donahue, and the singer Michael Bolton --Betty.

NGUYEN: Not sleepy today, with a lot of mixed reaction. Thank you, Alina Cho -- Carol.

LIN: All right. Well, a big-name lawyer is handling Stewart's appeal. And he has got a big job ahead of him. That's what our CNN senior legal analyst Jeffrey Toobin says.

Jeff, you've been following this case from the indictment to the sentencing. Why would it be such a big job? I mean, already, the judge seems intent on at least giving Martha somewhat more of a minimum sentence than what it could have been.

JEFFREY TOOBIN, CNN LEGAL ANALYST: Well, Carol, I think you have to start from the premise that the vast, vast majority of criminal cases are upheld on appeal. So that's the first point to remember. And also, this was a very fair trial. I sat through it. Martha Stewart had excellent lawyers representing her. The judge, in certain key cases, already ruled in favor of Martha Stewart.

Remember this is the judge who threw out the securities fraud count against her. So it's not like this was some horrendously biased judge. And if you look at the points Walter Dellinger, a truly excellent lawyer, suggested today that he would be raising, they are not kind of arguments that usually succeed in getting a trial overturned.

LIN: We're looking at the attorneys as they make their remarks right now, Jeffrey. So what argument are they going to make on the appeal?

TOOBIN: Well, the main argument is based on this very strange situation that arose after the trial. Two key people involved with this case are -- now stand charged with perjury. The government has indicted one of its own witnesses, a Secret Service agent who testified about a single document in the case.

He's been indicted for perjury and one of the jurors has been accused of perjury by the defense, lying in jury selection about aspects of his background. The defense will argue that because this perjury took place, her trial was infected with perjury and thus was unfair. That's the argument. LIN: All right. Jeff, let's take a look at something that Martha said out of the courthouse, not only what she said but how she said it. Let's see how that might affect the appeal.

(BEGIN VIDEO CLIP)

STEWART: I'm just very, very sorry that it has come to this, that a small, personal matter has been able to be blown out of all proportion and with such venom and such gore. I mean, it's just terrible.

(END VIDEO CLIP)

LIN: Venom and gore. How is that likely to go over with the judge?

TOOBIN: You know, I think the appeals court judges aren't really going to be worried about what she says on the courthouse steps. We're talking about an appeals process that is going to go on for many, many months. Martha Stewart's main concern today is to make sure that her company survives.

And she did succeed through her determination and suggestion that the company will proceed and thrive. The stock is up in her company today. But I don't think her statement today will make much difference.

But you know her big problem from the very beginning has been if she simply acknowledged the truth, acknowledged what happened, none of this would have happened -- none of -- this prosecution never would have taken place, but she has refused, since the stock transaction on December 27, 2001, to acknowledge she did anything wrong. And that has been the big problem.

LIN: That's what you said all along. Thanks very much, Jeff.

So what do you folks think out there? Was Martha Stewart's sentence fair? Give us an e-mail at livefrom@cnn.com. And we're going to share some of your comments in the next hour.

NGUYEN: We're going to shift gears now. A thousand-plus homes are still in the potential path of a fast-moving wildfire in Carson City, Nevada. More than a dozen homes have burned since so-called Waterfall Fire broke out on Wednesday. CNN's Ted Rowlands is there, and he joins us with the latest on this fire. Any relief in sight anytime soon -- Ted

TED ROWLANDS, CNN CORRESPONDENT: Well, you know, at this point, this fire is still out of control. and they are doing their best to maintain control of it. Right now, as expected, the fire is moving away from Carson City, up towards Lake Tahoe. It's not necessarily good news. It's moving away from some homes here in Carson City. But of course there are homes and structures over this mountain in the Tahoe region. So firefighters are attacking this blaze by air. Overnight they were able to save a cluster of about 50 homes in a subdivision here that was threatened. It is expected, however, those homes could be threatened later. About 1000 homes are still considered threatened in this area. Fourteen homes have been completely destroyed. This morning, hundreds of people in Carson City are still out of their homes. They're hoping that firefighters can save them.

The problem, however, according to firefighters, is the wind. It shifts periodically. And it has been very tough to control. In fact, because of the wind, the homes that are now not threatened are most likely going to be threatened later.

(BEGIN VIDEO CLIP)

KURT FROSDICK, FIRE INTERAGENCY SPOKESMAN: This afternoon, as the winds pick up and go to the southwest, it's going to go back towards those homes again. We're also protecting those homes, setting up strike teams, and clearing out that brush as well.

ROWLANDS: Although they don't know if it was intentional, investigators say this fire was most definitely started by an individual or group. It was started early Wednesday morning, 9100 acres have burned thus far -- Betty.

NGUYEN: Need some help from Mother Nature. Thank you, Ted Rowlands -- Carol.

LIN: All right. Thanks very much, Betty. So are firefighters in for a rough weekend, or will be taming that blaze via breeze? Little pun intended there. CNN's Orelon Sidney has the big picture.

Orelon, they need some calmer winds or a little bit of rain. What's on the horizon?

ORELON SIDNEY, CNN METEOROLOGIST: Yes, they need -- both of those would be great. But it doesn't look like there's a whole lot of rain in the picture. There is an off chance for some showers maybe over the weekend but maybe a tenth of an inch is all you're going to get. And when you have fires on a slope, which is what we're talking about there, depending on the wind condition, you can really get those fires to race up the slope. And then once they're there, if the winds pick up, that's when you start to get what we call spot fires.

That is embers will start to move ahead of the main fire line. And that of course could threaten the homes that are all stretched through the mountain areas there. The problem is, the winds are going to be very variable through the weekend, going up to about 10 to 15 miles per hour -- Carol.

LIN: That's a cool graphic, and it really helps us understand the story. Thanks, Orelon.

SIDNEY: You're welcome.

NGUYEN: Thousands of miles away, a horrific fire has killed dozens of children. It happened in southern India. And as victims' families grieve, new questions are being raised about the safety of the country's schools. CNN's Ram Ramgopal joins us now from New Delhi via videophone.

What a devastating situation -- Ram.

RAM RAMGOPAL, CNN CORRESPONDENT: Absolutely, Betty. This is one of the most horrific incidents in recent memory. Certainly, fires are not new in this country because many of the building don't have the safety codes that we would assume or take for granted in the West.

But certainly this incident involving the youngest victims has been really a very, very -- a shocking incident. Much of the country's media focusing on this incident. Today, in the primary school in the southern part of the country up to 90 children, Betty, feared killed.

And in fact, more perhaps now in their last breaths, really, because they are injured with serious burns. And according to the police and the hospital officials we've spoken to, the people we've seen in media reports, the parents are devastated. As you can well imagine.

Many of these children under the age of 10. And apparently a short circuit in a school building which triggered off this huge blaze. And many of these children could not get out because the doors were sealed, the windows were sealed -- Betty.

NGUYEN: Something as simple as a short circuit caused all of this devastation. All right, Ram Ramgopal, thank you very much.

Did a drug given to troops cause a soldier to get panic attacks? A case involving a sergeant accused of cowardice while serving in Iraq raises the question. We have a live report from the Pentagon.

And these are live pictures from the campaign trail in Lansing, Michigan. Vice President Dick Cheney and Senator John McCain about to take the stage. And we will bring that to you.

Plus, a little bit later, robot reality check. They keep assembly lines moving and entertain us, but could they turn on us? A new movie wants us to believe it.

(COMMERCIAL BREAK)

NGUYEN: We want to show you some live pictures now of Lansing, Michigan, where Senator John McCain is at the podium. He's speaking at this event with Vice President Dick Cheney. We want to take a listen to McCain as he is about to speak, right here, in Lansing, Michigan.

SEN. JOHN MCCAIN (R), ARIZONA: In short, my friends, Vice President Cheney is not just another pretty face.

(LAUGHTER)

He helped lead America in the difficult years following the end of the Vietnam war and President Nixon's resignation. He helped end the Cold War and assist long-captive nations of the Soviet empire recover their freedom and reap for themselves the blessings of democracy and free markets.

As secretary of defense, he was responsible for shaping the future of our military forces in an era of profound and rapid change, helped liberate Panama from the tyranny of its corrupt, self-appointed leaders, and of course, helped lead operations Desert Shield and Desert Storm to defeat Iraqi aggression that threatened the independence of other Middle Eastern countries.

(APPLAUSE)

Now, as vice president, he is in effect deputy commander in chief in the great test of our generation. He stands shoulder to shoulder with the president in this long, tough fight to vanquish international terrorism, not reduce it, not change its operations, not temporarily reduce it, but to vanquish it and make it unmistakably clear...

(APPLAUSE)

... and make it unmistakably clear to all the bin Ladens of the world, what a fatal mistake it is to attack the United States of America.

(APPLAUSE)

AUDIENCE: USA, USA, USA, USA, USA, USA, USA.

MCCAIN: And after more than a decade of failed diplomatic efforts, sanctions and limited military pressure to compel Saddam Hussein to honor the obligations he accepted at the end of the Gulf War, the president could count on the experience and wisdom of his vice president when he made the difficult decision to liberate Iraq from the tyranny of Saddam Hussein.

Whether Saddam then possessed the terrible weapons that every intelligence service on Earth believed he possessed, he had used them before, and was, I have no doubt, firmly determined to acquire them again, for what terrible purpose we can only anticipate with dread.

That was a risk George Bush and Dick Cheney knew we just couldn't afford in this new violent age of terrorism.

To the work of many American generations who've protected our interests and championed our values abroad must now be added the defense of our freedoms here at home from a clear and present danger.

MCCAIN: We are very fortunate that our president in these challenging days can rely on the counsel of a man who has demonstrated time and again the resolve, experience and patriotism that will be required for success, and the hard-headed, clear thinking necessary to prevail in this global fight between good and evil.

That's why I'm honored to introduce to you the indispensable and very debonair, the vice president of the United States, Dick Cheney.

(APPLAUSE) AUDIENCE: Four more years, four more years, four more years, four more years, four more years, four more years, four more years, four more years, four more years, four more years, four more years.

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: Thank you. Thank you very much. Thank you very much.

(APPLAUSE)

All right. Well, we're delighted to be back in Michigan, back in the great capital of the great state of Michigan...

(APPLAUSE)

... in the heart of Bush-Cheney country.

(APPLAUSE)

And I really want to thank John McCain for his kind words today.

(APPLAUSE)

It was a privilege to fly to Michigan on Air Force Two with a distinguished Navy pilot.

And as John mentioned, we've been friends for a good many years. We first got to know each other when we were both members of the House of Representatives from the West.

I'll always remember one of my favorite experiences from those years is when John and I took a pack trip together into the Thoroughfare country of northwestern Wyoming, the most remote place in the lower 48, and spent a week on horseback in some of God's most beautiful country. And it was a memorable experience.

And over the years, my admiration for John has grown for his personal courage, for his integrity, and for his lifetime of service to America.

(APPLAUSE)

CHENEY: John is one of the great Americans of our generation. And I'm delighted he's my friend.

(APPLAUSE)

NGUYEN: You're looking at a live picture of a Republican campaign rally in Lansing, Michigan. Senator John McCain introduced the vice president just moments. Of course, as you may remember, back in 2000, McCain won Michigan in the primaries there. And of course right now, President Bush and John Kerry are neck and neck in Michigan. Obviously, this is an important speech today.

Carol, over to you.

LIN: Betty, will a new missile defense system do the job? (BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We do not choose to be vulnerable against someone like North Korea or Iran who are trying to get weapons of mass destruction.

(END VIDEO CLIP)

LIN: The White House believes in it, but critics say it's a billion-dollar mistake. That story later on LIVE FROM...

And the Martha Stewart media empire, will it crumble or rumble on? We're going to talk about that and see how her stock is doing, straight ahead.

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


Aired July 16, 2004 - 13:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEO CLIP)
MARTHA STEWART: I'm used to all kinds of hard work, as you know, and I'm not afraid, I'm not afraid whatsoever. I'm just very, very sorry that it's come to this.

(END VIDEO CLIP)

CAROL LIN, CNN ANCHOR: It has come to a prison sentence for Martha Stewart. This hour, what she had to say, where she goes from here, and how will she keep her company going?

ALLAN CHERNOFF, CNN SR. FINANCIAL CORRESPONDENT: I'm Allan Chernoff, live in front of the federal courthouse in New York City. Martha Stewart get the minimum sentence for her part in lying about the sale of ImClone stock. We'll have the details coming up on LIVE FROM...

BETTY NGUYEN, CNN ANCHOR: Explosive wildfires, homes destroyed, and firefighters hoping for a break. We're LIVE FROM... Carson City, Nevada.

LIN: Wow. Robot reality check. They go on the attack in a new movie starting today. But will they ever be that smart in real life?

From the CNN Center in Atlanta, I'm Carol Lin. Miles and Kyra are off today.

NGUYEN: And I'm Betty Nguyen. CNN's LIVE FROM... starts right now. Up first this hour, Martha Stewart's shame, her company's gain. As you know, if you've been watching CNN, the homemaking maven deemed this a "shameful day," as federal prosecutors and the judge sentence her to five-month sentence in prison for lying to the government about a stock sale in 2000. But stock in her own company, Martha Stewart Living Omnimedia, soared as investors let out a sigh of relief that the sentence wasn't worse.

Stewart never spoke during her trial, but she talked to the judge this morning and then she talked to reporters.

(BEGIN VIDEO CLIP)

STEWART: Today is a shameful day. It's shameful for me and for my family and for my beloved company and for all its employees and partners. What was a small personal matter came over -- became over the last two years an almost fatal circus event of unprecedented proportions. I have been choked and almost suffocated to death during that time, all the while, more concerned about the well being of others than for myself. More hurt for them and for their losses than for my own. More worried for their futures than the future of Martha Stewart, the person.

More than 200 people have lost their jobs at my company and -- as a result of this situation. I want them to know how very, very sorry I am for them and their families. I would like to thank everybody who stood by me, who wished me well, waved to me on street, like these lovely people over here, smiled at me, called me, wrote to me.

We received thousands of support letters and more than 170,000 e- mails to marthatalks.com. And I appreciate each and every one of those pieces of correspondence. I really feel good about it. Perhaps all of you out there can continue to show your support by subscribing to our magazine, by buying our products, by encouraging our advertisers to come back in full force to our magazines. Our magazines are great.

They deserve your support. And whatever happened to me personally shouldn't have any affect whatsoever on the great company Martha Stewart Living Omnimedia. And I don't want to use this as a sales pitch for my company, but we love that company. We've worked so hard on that company. And we really think it merits great attention from the American public.

And I'll be back. I will be back. Whatever I have to do in the next few months, I hope the months go by quickly. I'm used to all kinds of hard work, as you know. And I'm not afraid. I'm not afraid whatsoever. I'm just very, very sorry that it has come to this, that a small, personal matter has been able to be blown out of all proportion, and with such venom and such gore. I mean, it's just terrible.

(END VIDEO CLIP)

NGUYEN: Stewart's sentence is on hold while she pursues her appeal. And we get more on the crimes and punishment from CNN's Allan Chernoff.

Hi, Allan.

CHERNOFF: Hi, Betty. Well, Martha Stewart did receive the minimum sentence that she could have gotten under the federal guidelines, five months in prison, five months of home detention, two years of probation, and a fine of $30,000. Martha Stewart didn't show any dramatic response upon hearing that sentence, but after the entire proceeding, she did indicate a little bit of relief. She gave a little smile to her daughter, Alexis, and gave her a kiss right afterwards.

The dramatic high point, certainly, was Martha Stewart reading from a prepared statement in court, asking the judge to consider all of her good works, all of her contributions. She said to the judge, I want to continue serving my country, and she also asked the judge not to allow her life to be destroyed. Judge Miriam Cedarbaum did indicate some sympathy. She said: "You have suffered and you will continue to suffer enough." She also said that she had read each and every one of more than 1500 letters that had been submitted to the court on Martha Stewart's behalf.

Now Martha Stewart, as you said, is going to be appealing this verdict. Her legal team has 10 days in which to appeal and the sentence is being stayed until that appeal has concluded -- Betty.

NGUYEN: Allan, any indication why the attorneys didn't decide to appeal immediately today?

CHERNOFF: No immediate indication of that. I did speak to the public relations folks for Martha Stewart. And they basically felt that there was no rush, that it can all be accomplished within the next 10 days easily. So I think next week we can look for that.

And we certainly did hear a preview of the plan to appeal from Martha Stewart's newest attorney, Walter Dellinger, and he will be basically repeating some of the same arguments that Robert Morvillo, Martha Stewart's other attorney, has been making thus far, complaining about alleged perjury that occurred during the case -- Betty.

NGUYEN: CNN's Allan Chernoff, thank you -- Carol.

LIN: Well, Betty, exactly when Martha Stewart will start her sentence is anybody's guess. But where she'll report to is a little more certain. Stewart's lawyers are requesting and the judge agreed to recommend the minimum security federal pen in Danbury, Connecticut, that's only about 20 miles from Stewart's digs in Westport.

But for whatever reason, she's choosing to serve her home confinement in Bedford, New York. Now the majority of Danbury's inmates are drug offenders. All of them spend about 7 1/2 hours a day doing manual labor. They do get paid, but not exactly the $673 an hour Stewart made on average in 2003. In prison, her hourly wage will be between 12 cents and 40 cents.

Martha Stewart will sit down with CNN's Larry King Monday for her first and only live interview since her sentencing, so be sure to tune in at 9 Eastern for that.

NGUYEN: Now off to Westport, where Stewart's friends and neighbors along with her foes and critics have plenty to say about her sentence. CNN's Alina Cho is listening.

And Alina, what are they saying.

ALINA CHO, CNN CORRESPONDENT: Well, people here, Betty, are pretty evenly divided. Martha Stewart has called Westport, Connecticut, her home for more than 30 years. Remember that this is where she started her catering business more than 30 years ago in the mid-1970s, which gave rise to her one-woman empire. It is also, you'll remember, where she taped her popular television show.

We're here on Main Street, which is really the center of town, and we have talked to a lot of people and they seem to be, as I mentioned, evenly divided, evenly split on how they feel about Martha Stewart's sentence. We have found two such people, very interesting people I might add, Esta (ph) and Nancy (ph).

Esta, you actually worked at the book shop where she had the first book signing for her first book, "Entertaining."

UNIDENTIFIED FEMALE: ... the remarkable book shop in Westport. Everybody knew it. It was the landmark. We gave her the first signing for her book called "Entertaining." I think it came out in 1982.

CHO: You think she's being unfairly targeted because she's a celebrity?

UNIDENTIFIED FEMALE: Yes, I do. I don't think she deserves to do any jail time. A lot of people lie and get away with it. Somehow they're focusing on her. I think it's unfair. Besides she's given a lot of jobs to a lot of people, she's done a lot of good things.

CHO: Right, in addition to her home, she also owned a television studio here.

UNIDENTIFIED FEMALE: Exactly, yes.

CHO: And Nancy, you remember Martha Stewart when she first started her catering business here, you had just moved here.

UNIDENTIFIED FEMALE: We had moved here and it was a pretty well- known catering business in town. We would see her around town a lot at parties. And as she got more and more successful she was a little less approachable but she was still much a part of the community here.

CHO: And you believe that she did the crime, she should do the time.

UNIDENTIFIED FEMALE: Absolutely. Think five months is not too severe. I think it's probably a good amount of time. I think -- not that she should be used as an example, but I think what she did was illegal and she should pay the price for that and hopefully be a little humbled by it and also help some other people realize that lying just isn't the right thing to do especially when you're in the public eye.

CHO: We were talking a little bit about the rift that she had with the neighbors here. Some of them had complained about her being loud during the taping of her television show. She later wrote about how she felt Westport had lost its neighborly-ness. There are still some neighbors who are a bit angry right.

UNIDENTIFIED FEMALE: There are. Again, I think the community is mixed on her as a neighbor. There was a lot of talk at one point that she was going to leave town. She actually wrote an article about that. And in one of the stores in town they actually had a board where you could sign if you were for her leaving town or against her. And it was very much mixed, like it is now. I think -- you know, she does polarize people in a way, but she has done some wonderful things. So we feel -- she's still a Westport native and we're proud of her in a lot of ways.

CHO: Still spends a lot of time here. Nancy, Esta, thank you very much.

As I mentioned, Betty, of course, Martha Stewart does have several homes. She still does call Westport, Connecticut, her home. it was a sleepy town, or it was a sleepy town at least, until Martha Stewart moved here. It is also home, we should mention, to such stars as Paul Newman, Phil Donahue, and the singer Michael Bolton --Betty.

NGUYEN: Not sleepy today, with a lot of mixed reaction. Thank you, Alina Cho -- Carol.

LIN: All right. Well, a big-name lawyer is handling Stewart's appeal. And he has got a big job ahead of him. That's what our CNN senior legal analyst Jeffrey Toobin says.

Jeff, you've been following this case from the indictment to the sentencing. Why would it be such a big job? I mean, already, the judge seems intent on at least giving Martha somewhat more of a minimum sentence than what it could have been.

JEFFREY TOOBIN, CNN LEGAL ANALYST: Well, Carol, I think you have to start from the premise that the vast, vast majority of criminal cases are upheld on appeal. So that's the first point to remember. And also, this was a very fair trial. I sat through it. Martha Stewart had excellent lawyers representing her. The judge, in certain key cases, already ruled in favor of Martha Stewart.

Remember this is the judge who threw out the securities fraud count against her. So it's not like this was some horrendously biased judge. And if you look at the points Walter Dellinger, a truly excellent lawyer, suggested today that he would be raising, they are not kind of arguments that usually succeed in getting a trial overturned.

LIN: We're looking at the attorneys as they make their remarks right now, Jeffrey. So what argument are they going to make on the appeal?

TOOBIN: Well, the main argument is based on this very strange situation that arose after the trial. Two key people involved with this case are -- now stand charged with perjury. The government has indicted one of its own witnesses, a Secret Service agent who testified about a single document in the case.

He's been indicted for perjury and one of the jurors has been accused of perjury by the defense, lying in jury selection about aspects of his background. The defense will argue that because this perjury took place, her trial was infected with perjury and thus was unfair. That's the argument. LIN: All right. Jeff, let's take a look at something that Martha said out of the courthouse, not only what she said but how she said it. Let's see how that might affect the appeal.

(BEGIN VIDEO CLIP)

STEWART: I'm just very, very sorry that it has come to this, that a small, personal matter has been able to be blown out of all proportion and with such venom and such gore. I mean, it's just terrible.

(END VIDEO CLIP)

LIN: Venom and gore. How is that likely to go over with the judge?

TOOBIN: You know, I think the appeals court judges aren't really going to be worried about what she says on the courthouse steps. We're talking about an appeals process that is going to go on for many, many months. Martha Stewart's main concern today is to make sure that her company survives.

And she did succeed through her determination and suggestion that the company will proceed and thrive. The stock is up in her company today. But I don't think her statement today will make much difference.

But you know her big problem from the very beginning has been if she simply acknowledged the truth, acknowledged what happened, none of this would have happened -- none of -- this prosecution never would have taken place, but she has refused, since the stock transaction on December 27, 2001, to acknowledge she did anything wrong. And that has been the big problem.

LIN: That's what you said all along. Thanks very much, Jeff.

So what do you folks think out there? Was Martha Stewart's sentence fair? Give us an e-mail at livefrom@cnn.com. And we're going to share some of your comments in the next hour.

NGUYEN: We're going to shift gears now. A thousand-plus homes are still in the potential path of a fast-moving wildfire in Carson City, Nevada. More than a dozen homes have burned since so-called Waterfall Fire broke out on Wednesday. CNN's Ted Rowlands is there, and he joins us with the latest on this fire. Any relief in sight anytime soon -- Ted

TED ROWLANDS, CNN CORRESPONDENT: Well, you know, at this point, this fire is still out of control. and they are doing their best to maintain control of it. Right now, as expected, the fire is moving away from Carson City, up towards Lake Tahoe. It's not necessarily good news. It's moving away from some homes here in Carson City. But of course there are homes and structures over this mountain in the Tahoe region. So firefighters are attacking this blaze by air. Overnight they were able to save a cluster of about 50 homes in a subdivision here that was threatened. It is expected, however, those homes could be threatened later. About 1000 homes are still considered threatened in this area. Fourteen homes have been completely destroyed. This morning, hundreds of people in Carson City are still out of their homes. They're hoping that firefighters can save them.

The problem, however, according to firefighters, is the wind. It shifts periodically. And it has been very tough to control. In fact, because of the wind, the homes that are now not threatened are most likely going to be threatened later.

(BEGIN VIDEO CLIP)

KURT FROSDICK, FIRE INTERAGENCY SPOKESMAN: This afternoon, as the winds pick up and go to the southwest, it's going to go back towards those homes again. We're also protecting those homes, setting up strike teams, and clearing out that brush as well.

ROWLANDS: Although they don't know if it was intentional, investigators say this fire was most definitely started by an individual or group. It was started early Wednesday morning, 9100 acres have burned thus far -- Betty.

NGUYEN: Need some help from Mother Nature. Thank you, Ted Rowlands -- Carol.

LIN: All right. Thanks very much, Betty. So are firefighters in for a rough weekend, or will be taming that blaze via breeze? Little pun intended there. CNN's Orelon Sidney has the big picture.

Orelon, they need some calmer winds or a little bit of rain. What's on the horizon?

ORELON SIDNEY, CNN METEOROLOGIST: Yes, they need -- both of those would be great. But it doesn't look like there's a whole lot of rain in the picture. There is an off chance for some showers maybe over the weekend but maybe a tenth of an inch is all you're going to get. And when you have fires on a slope, which is what we're talking about there, depending on the wind condition, you can really get those fires to race up the slope. And then once they're there, if the winds pick up, that's when you start to get what we call spot fires.

That is embers will start to move ahead of the main fire line. And that of course could threaten the homes that are all stretched through the mountain areas there. The problem is, the winds are going to be very variable through the weekend, going up to about 10 to 15 miles per hour -- Carol.

LIN: That's a cool graphic, and it really helps us understand the story. Thanks, Orelon.

SIDNEY: You're welcome.

NGUYEN: Thousands of miles away, a horrific fire has killed dozens of children. It happened in southern India. And as victims' families grieve, new questions are being raised about the safety of the country's schools. CNN's Ram Ramgopal joins us now from New Delhi via videophone.

What a devastating situation -- Ram.

RAM RAMGOPAL, CNN CORRESPONDENT: Absolutely, Betty. This is one of the most horrific incidents in recent memory. Certainly, fires are not new in this country because many of the building don't have the safety codes that we would assume or take for granted in the West.

But certainly this incident involving the youngest victims has been really a very, very -- a shocking incident. Much of the country's media focusing on this incident. Today, in the primary school in the southern part of the country up to 90 children, Betty, feared killed.

And in fact, more perhaps now in their last breaths, really, because they are injured with serious burns. And according to the police and the hospital officials we've spoken to, the people we've seen in media reports, the parents are devastated. As you can well imagine.

Many of these children under the age of 10. And apparently a short circuit in a school building which triggered off this huge blaze. And many of these children could not get out because the doors were sealed, the windows were sealed -- Betty.

NGUYEN: Something as simple as a short circuit caused all of this devastation. All right, Ram Ramgopal, thank you very much.

Did a drug given to troops cause a soldier to get panic attacks? A case involving a sergeant accused of cowardice while serving in Iraq raises the question. We have a live report from the Pentagon.

And these are live pictures from the campaign trail in Lansing, Michigan. Vice President Dick Cheney and Senator John McCain about to take the stage. And we will bring that to you.

Plus, a little bit later, robot reality check. They keep assembly lines moving and entertain us, but could they turn on us? A new movie wants us to believe it.

(COMMERCIAL BREAK)

NGUYEN: We want to show you some live pictures now of Lansing, Michigan, where Senator John McCain is at the podium. He's speaking at this event with Vice President Dick Cheney. We want to take a listen to McCain as he is about to speak, right here, in Lansing, Michigan.

SEN. JOHN MCCAIN (R), ARIZONA: In short, my friends, Vice President Cheney is not just another pretty face.

(LAUGHTER)

He helped lead America in the difficult years following the end of the Vietnam war and President Nixon's resignation. He helped end the Cold War and assist long-captive nations of the Soviet empire recover their freedom and reap for themselves the blessings of democracy and free markets.

As secretary of defense, he was responsible for shaping the future of our military forces in an era of profound and rapid change, helped liberate Panama from the tyranny of its corrupt, self-appointed leaders, and of course, helped lead operations Desert Shield and Desert Storm to defeat Iraqi aggression that threatened the independence of other Middle Eastern countries.

(APPLAUSE)

Now, as vice president, he is in effect deputy commander in chief in the great test of our generation. He stands shoulder to shoulder with the president in this long, tough fight to vanquish international terrorism, not reduce it, not change its operations, not temporarily reduce it, but to vanquish it and make it unmistakably clear...

(APPLAUSE)

... and make it unmistakably clear to all the bin Ladens of the world, what a fatal mistake it is to attack the United States of America.

(APPLAUSE)

AUDIENCE: USA, USA, USA, USA, USA, USA, USA.

MCCAIN: And after more than a decade of failed diplomatic efforts, sanctions and limited military pressure to compel Saddam Hussein to honor the obligations he accepted at the end of the Gulf War, the president could count on the experience and wisdom of his vice president when he made the difficult decision to liberate Iraq from the tyranny of Saddam Hussein.

Whether Saddam then possessed the terrible weapons that every intelligence service on Earth believed he possessed, he had used them before, and was, I have no doubt, firmly determined to acquire them again, for what terrible purpose we can only anticipate with dread.

That was a risk George Bush and Dick Cheney knew we just couldn't afford in this new violent age of terrorism.

To the work of many American generations who've protected our interests and championed our values abroad must now be added the defense of our freedoms here at home from a clear and present danger.

MCCAIN: We are very fortunate that our president in these challenging days can rely on the counsel of a man who has demonstrated time and again the resolve, experience and patriotism that will be required for success, and the hard-headed, clear thinking necessary to prevail in this global fight between good and evil.

That's why I'm honored to introduce to you the indispensable and very debonair, the vice president of the United States, Dick Cheney.

(APPLAUSE) AUDIENCE: Four more years, four more years, four more years, four more years, four more years, four more years, four more years, four more years, four more years, four more years, four more years.

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: Thank you. Thank you very much. Thank you very much.

(APPLAUSE)

All right. Well, we're delighted to be back in Michigan, back in the great capital of the great state of Michigan...

(APPLAUSE)

... in the heart of Bush-Cheney country.

(APPLAUSE)

And I really want to thank John McCain for his kind words today.

(APPLAUSE)

It was a privilege to fly to Michigan on Air Force Two with a distinguished Navy pilot.

And as John mentioned, we've been friends for a good many years. We first got to know each other when we were both members of the House of Representatives from the West.

I'll always remember one of my favorite experiences from those years is when John and I took a pack trip together into the Thoroughfare country of northwestern Wyoming, the most remote place in the lower 48, and spent a week on horseback in some of God's most beautiful country. And it was a memorable experience.

And over the years, my admiration for John has grown for his personal courage, for his integrity, and for his lifetime of service to America.

(APPLAUSE)

CHENEY: John is one of the great Americans of our generation. And I'm delighted he's my friend.

(APPLAUSE)

NGUYEN: You're looking at a live picture of a Republican campaign rally in Lansing, Michigan. Senator John McCain introduced the vice president just moments. Of course, as you may remember, back in 2000, McCain won Michigan in the primaries there. And of course right now, President Bush and John Kerry are neck and neck in Michigan. Obviously, this is an important speech today.

Carol, over to you.

LIN: Betty, will a new missile defense system do the job? (BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We do not choose to be vulnerable against someone like North Korea or Iran who are trying to get weapons of mass destruction.

(END VIDEO CLIP)

LIN: The White House believes in it, but critics say it's a billion-dollar mistake. That story later on LIVE FROM...

And the Martha Stewart media empire, will it crumble or rumble on? We're going to talk about that and see how her stock is doing, straight ahead.

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