CONGRESS REQUESTS CRIMINAL PROBE OF MARTHA STEWART

Action Comes As Ms. Stewart Threatens to Plead the Fifth

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WASHINGTON (AdAge.com) -- Leaders of a House committee today asked the Justice Department to conduct a criminal probe
Photo: AP
Martha Stewart refused to provide any further details to Congress.
into whether Martha Stewart supplied the committee with false information during its investigation of the drug company ImClone.

Fifth Amendment
Representatives of Ms. Stewart, the chairman and CEO of Martha Stewart Living Omnimedia, have informed the committee that she will use her Fifth Amendment right against self-incrimination if called before the panel. The committee said it was also informed that Ms. Stewart didn't intend to explain apparent conflicts in the information she has thus far provided to Congress.

As a result, the committee said, it has written the Justice Department requesting a criminal probe of the lifestyle publishing mogul.

Federal felony
The letter released by the House committee said it is a "federal felony for anyone to knowingly and willfully make any false material statement" in a congressional investigation. The penalty is up to five years in prison.

In a prepared statement -- and a jab at the congressional investigators -- Robert Morvillo, an attorney for Ms. Stewart, said, "I strongly disagree with the analysis of the committee and its staff, but am pleased that the matter will now be exclusively in the hands of professional law enforcement authorities who are trained

Photo: AP
Rep. James Greenwood, chairman of the House Energy and Commerce Oversight and Investigations Subcommittee, right, and full committee Chairman Rep. Billy Tauzin, left, at today's press conference.
to conduct a thorough and responsible investigation. I'm glad the political aspects of this matter will now terminate and am confident that the investigation will lead to Ms. Stewart's exoneration."

'Personal matter'
A representative of Martha Stewart Living Omnimedia said the investigation was "a personal matter" of Ms. Stewart's and that "it has been company policy not to comment" on the matter.

"We have come to the end of the road, it is now up to the Justice Department to make judgements," said U.S. Rep. Billy Tauzin, R-La., chairman of the House Energy and Commerce Committee, who joined Rep. James Greenwood, R-Pa., chair of the committee's Oversight and Investigations panel at a news conference. "We expect this referral to be seriously examined by the Justice Department."

At the outset of the press conference Mr. Tauzin outlined what were later termed "inconsistencies" between Ms. Stewart's statements and the panel's investigative findings.

Evidence contradicts Stewart
Rep. Tauzin said "evidence obtained" suggested that Ms. Stewart received a call from her broker on the morning

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of Dec. 27 while ImClone's stock was trading above $60. Ms. Stewart maintains that she had an agreement with her broker to sell should the stock price fall below $60 and that she had no contact with her broker until that afternoon.

In addition, Rep. Tauzin said the investigation found that a call made that afternoon had been initiated by Ms. Stewart, not by her broker, as Ms. Stewart has maintained.

In mid-afternoon trading following the conclusion of the press conference, Martha Stewart Omnimedia's stock was up 9.8% to $8.51.

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