ETERNAL VIGILANCE

U.S. INJUSTICE
Another Defeat for True Justice
By Paul Craig Roberts

The Kafkaesque indictment, trial and conviction of Martha Stewart is a devastating blow both to the U.S. legal system and to belief in the American socio-economic system.

Today hapless defendants are convicted not only in the absence of criminal intent but also in the absence of statutory felonies.

Stewart was indicted for lying and obstructing justice. For these offenses to have any meaning, there must be a crime that she lied about and obstructed. The prosecutors presented no such crime. Stewart was indicted and convicted for lying and obstructing a crime when no crime happened.

Many Americans believe that Stewart committed “insider trading,” because that is the disinformation her prosecutors used their media pimps to disseminate. The prosecutors would have liked to have charged Stewart with insider trading, but could not. Stewart learned from her broker, not from a company insider, that a top executive was selling shares.

Since time immemorial, many people have sold shares for the same reason. Brokers call and report that a stock is being sold when the overall market is not. That is an indication that there is bad news in the market about that stock. It is a broker’s job to advise when to hold and when to fold.

Whenever a company announces good or bad news, SEC regulators and prosecutors look to see who sold or bought stock in the period immediately preceding the news. If they find company executives, or anyone whom they can connect to company executives, buying or selling prior to news, they bring a case of insider trading.

Insider trading is a creation of regulatory bureaucrats, not of statutory law. It is an undefined crime.
Bureaucrats easier to convict people of undefined crimes. Many legal scholars maintain that there is no rational reason for making insider trading into an offense.

Prosecutors knew that Stewart was friends with Im-Clone’s president and jumped to the conclusion that she was tipped off by him. When it became clear that Stewart had the information from her broker, the prosecutors were reluctant to let go of their celebrity target, whose demise would boost their careers. The prosecutors decided to make a crime out of a non-crime.

Stewart recognized that they were after her with an undefined crime. Like most people in such a situation, Stewart gave them a story that they would have a hard time twisting into insider trading.

This is the basis for her indictment for lying and obstructing justice.

The Stewart case reminds me of the Ben Lacy case during the 1990s. Lacy was an apple juice producer who made a few mistakes filling out environmental forms over the course of several years. Federal prosecutors chose to interpret the few mistakes as comprising a conspiracy to hide the pollution of a stream behind his plant. As the stream tested pristine, the prosecutors did not accuse him of polluting the stream.

If they had accused him of polluting, evidence of the lack of pollution would have collapsed their case. By accusing him of conspiracy, they were able to keep out of court evidence that the stream was not polluted.

Eventually, the prosecutors had to let go of Lacy, but only after they had ruined him financially.

The Stewart jurors should have realized that the case was bogus when the judge threw out the main charge—that she had committed fraud by declaring her innocence. A prosecutor who would bring such a ridiculous charge.

It appears the jury convicted Steward largely on the basis that she was white and successful. In their public statements, it is apparent that some of the jurors have the impression that Stewart is part of the corporate fraud that is believed to have caused widespread losses to shareholders who are “little people.”

By failing to recognize the political persecution in front of their noses, the Stewart jury demonstrated the extreme risks of a jury trial. The prosecutors only wanted a symbolic scalp and had offered Stewart a plea bargain deal—a probation
sentence in exchange for a plea that she made a false statement. Stewart, who has naively declared her belief in the integrity of the justice system, went to trial, instead.

Stewart’s conviction has made it even less likely that an innocent defendant will place trust in a jury. Already 95 percent of felony cases are settled with a coerced plea bargain, because judges and juries routinely fail in their function of protecting defendants from prosecutorial abuse. Time after time, innocent defendants are convicted on fabricated evidence, while exculpatory evidence is withheld. Based on the new DNA evidence, a large percentage of convicted
murderers and rapists have been found innocent.

Stewart’s conviction is a defeat for justice and the American way. Prosecutors have undermined the socio-economic
system by sending the Marxist message that Americans become successful and rich by evading the rules and engaging
in criminal behavior.

Some message for a conservative Republican administration to send.

©2003 CREATORS SYNDICATE, INC.

Nationally syndicated columnist, Paul Craig Roberts, Ph.D., a former editor at The Wall Street Journal, is the author of several books. He has been associated with the Hoover Institution, and the Institute for Political Economy and from 1981 to 1982 served as assistant secretary of the treasury for economic policy.