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White-Collar Criminals Weave New 'Tangled Webs'


Lying in politics is hardly a new game, but do people these days lie more than in the past? Author James B. Stewart asks this question in his new book, Tangled Webs, which describes what Stewart calls a surge of concerted, deliberate lying by people at the top of their fields, like Martha Stewart, Bernie Madoff, I. Lewis "Scooter" Libby and Barry Bonds.

Stewart admits in his book that he can't prove with statistics how much lying and perjury happens, but instead gathers anecdotal evidence from people like prosecutors who view it as an epidemic to the point where they come into work expecting to be lied to day after day. But whether or not it's a quantifiable rise, Stewart says the trend of high-profile cases where the defendant ends up charged not for the original crime but for perjury sends a negative message to the U.S. justice system and the rest of the world.

"Obviously they all thought they had done something wrong, they couldn't admit it, they were going to hide it, and it was easier to lie and cover it up," Stewart tells Morning Edition guest host Mary Louise Kelly. Of the four celebrity cases he examines, Stewart explains that three of them were charged not with the original misdeed, but with lying.

Obviously they all thought they had done something wrong, they couldn't admit it, they were going to hide it, and it was easier to lie and cover it up.

Scooter Libby, for example, wasn't charged with leaking CIA operative Valerie Plame's identity, but with perjury, making false statements to federal investigators and obstruction of justice. Barry Bonds was recently convicted of obstruction of justice, not for taking illegal drugs. And Martha Stewart was charged with obstruction of justice, making false statements to investigators and conspiracy — though not directly of insider trading.

One of James Stewart's revelations in Tangled Webs is the process through which Martha Stewart eventually went to trial after nearly accepting a guilty plea. The author says that after months of negotiations, Karen Seymour, the lead negotiator for the government, called James Comey, the lead prosecutor, saying Stewart's lawyer, Lawrence Pedowitz, had told her Stewart would accept a deal under which she would plead guilty to one count of making a false statement, with the understanding that she wouldn't be sent to jail. The prosecutors were enthused that she was ready to admit guilt. But as James Stewart explains in a passage from his book, Martha Stewart soon changed her mind:

James B. Stewart is the author of <em>Den of Thieves</em>, an investigation into insider trading on Wall Street in the 1980s. He is a former senior editor at the <em>Wall Street Journal</em> and lives in New York.
/ Evan Kafka
Evan Kafka
James B. Stewart is the author of Den of Thieves, an investigation into insider trading on Wall Street in the 1980s. He is a former senior editor at the Wall Street Journal and lives in New York.

The author finds this exchange significant because Martha Stewart wasn't alleging innocence, but rather said her business couldn't take a guilty plea. The author argues that like many wealthy people, Stewart just thought the wrongdoing was something she "constitutionally cannot do."

"I know the prosecutors — none of the prosecutors believed that. They thought — she can't take the guilty plea. It didn't have anything to do with her business. I mean, look, her business is faltering, but it survived," he says.

The author points out that the trial affected many people's lives, from stockholders of her publicly traded company, whose shares fell to a fraction of what they were before, to a 26-year-old stockbroker's assistant who, "through no fault of his own got swept up in the machinations of Stewart and her stockbroker, and who they just treat as kind of collateral damage here, but whose life was shattered by all this," Stewart explains.

The author says this pattern of making things worse by lying, and of forgiving the lying when it happens — such as when President George W. Bush commuted "Scooter" Libby's sentence — reflects poorly on the justice system. To improve it, he recommends procedures similar to any other law enforcement issue: "You have to have people being held accountable for breaking the law, and then you have to have encouragement for people who do the right thing."

"A lot of prosecutors told me that they were so happy about Martha Stewart getting convicted, not because they had any personal animus against her but because she's so visible that it served as a deterrent," he says.

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