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tv   The Many Lives of Martha Stewart  CNN  February 4, 2024 9:00pm-10:00pm PST

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ocean, spare a thought for the gentle giants. some are out there farming the seas and singing their songs. consider the countless human choices that led to the comeback of the humpback. and just how much they could still teach us about life on earth. [dramatic music] the martha stewart story is very much about having no limits. in a male-dominated business world, she became a self-made
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corporate titan-- no, you cannot say this. --by being the most intimidating homemaker on earth. martha stewart became an icon of design, icon of cooking. but there were always people who wanted to be against martha stewart. we're looking for imperfections. we're looking for cracks. we're looking for the fall. we're here to announce criminal charges against martha stewart. [chatter] this year's ipo activity so far is about $9 billion. i think it's a mania going on right now. the 1999 initial public offering market blasted off with internet frenzy. some of these valuations are in another galaxy.
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i've never really seen anything like this. so at this time in 1999, this was the dot-com boom. this was the heyday of initial public offerings, ipos, on wall street, right? so there was money flowing into these companies, and martha stewart was a household name with a storyline that wall street could understand and get behind. she's in the middle of an ever-expanding martha universe, right? that's her fantasy. that's her goal. she wants to be up there with the big boys. martha wasn't content to just get a little piece of the pie. she wanted an empire. [relaxing music] going public is like the american dream. on october 19, 1999, martha stewart living omnimedia went public. look, brioche with scrambled eggs.
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honestly, it was vintage classic martha stewart. beautifully made savories and cookies, fresh-squeezed orange juice. more brioche. more brioche. they were cooking the scrambled eggs with herbs, and then we were stuffing little brioche. and we served about 5,000 of them yesterday. it was very exciting. [rousing music] a couple of high-profile companies made their wall street debuts today, as initial public offerings. homemaker turned money-maker martha stewart rang the opening bell. [bell clangs] it was kind of fun. i got to stand up at the bell ringing, which was very amazing. a historic moment in martha stewart's life. she rings the bell the day her company goes public. i wanted to hit a bell. we were all euphoric. it was really a very exciting day. at that time, there were very few businesswomen who were as
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successful as martha stewart. there was oprah, jill barad at mattel, carly fiorina at hewlett-packard. but not many. oh, you're getting real glasses. [laughter] outside, they get plastic. it's a first down here. can you imagine the contradiction of being a woman as a stockbroker in the 1960s? [cheerful music] first of all, it was all men. it was all men. women weren't invited. to then being heralded on the floor of the new york stock exchange like a rock star. and they've had rock stars on the floor of the new york stock exchange, too. martha stewart is offering 7.2 million shares at a price of $18 each. so that ipo price was $18 a share. i'm just hearing that martha just opened $37.25 a share. what does that tell you? that was the first trade, $37.25? correct.
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[shouting, laughing] how does it feel to be the chairman of a publicly traded company? it feels really good, especially now with the stock opening substantially higher than the offering price. in a matter of, i don't know, it seemed like minutes, martha was a multi-multi-millionaire. shares of martha stewart living omnimedia rose faster than a souffle. we hit $38. [squealing] [chatter] isn't that nice, though? she started out at 9:30, rich. and now at 10:10, she's very, very rich. so what a great world, huh? it was insane to watch. i mean, these were numbers that are just unbelievable. before most americans got out of bed, she'd made $1.2 billion. there we go. all the female reporters are going upstairs to the executive bathrooms, and martha and her coo are in the bathroom. and martha's like, i can't believe it. i'm a billionaire. i'm a billionaire. i'm a billionaire. i'm one of the wealthiest women in the country.
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i'm a billionaire. i'm a billionaire. over and over again. she was completely bowled over by it, you know? i remember driving up madison avenue thinking, i can buy anything. i'm sure that was one of the best days of her life. i must tell you, we're really excited. it's a good thing. so that was the day that martha became the first self-made female billionaire. is money a means to you, a freedom? is it power? what does it represent? well, it represents, in america, success. if you've made it financially, generally you've been a success. and it's fun to work for money, but it's also fun to work for a real result. as a single, attractive woman, do you think that being-- no, seriously. i knew you'd get there on valentine's day. yeah. well, do you think that being this famous and this rich
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intimidates potential suitors? i don't know. i think that if you think of any corporate titan or big male corporate head of the 20th century, you would not know if they were divorced or not. but it is a line of questioning that martha stewart gets. what's it like for someone to date you? i mean, they've got to live, really, in your shadow. oh, no. and whether it was a trade-off to be martha stewart, that she couldn't be a mrs. someone else. do you think you'll get married again? oh, i don't know, charlie. i don't know. you can't be an older woman alone. you can't be a businesswoman without answering to a man somewhere. why get married? i'm asking. i know. why? why? and that's not something you ever hear anybody ask a man. anything missing, martha? no. come on, martha. anything you'd like? anything i would like?
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would you like a mate? more time. you keep going back to the mate thing. yeah, well-- i'll find a mate when i want one. but i just want more time. just more time. yeah, 24 hours isn't enough. we all want more time, don't we?
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you had a roaring success. were you a paper billionaire or a billionaire billionaire? well, paper. [laughs] well, what was it like, though? this is showing that a good idea can lead to a excellent company, can lead to a wonderful ipo.
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but it also can lead to jealousy, people not liking people who succeed, and people who go after you. and that's-- right? all truisms. that seems to be the american way, doesn't it? i thought that things were going along just great. a wonderful family, a beautiful daughter, a fantastic business. what have you had that was a failure? because you've been so successful, there has to be something that didn't go right. in business, not much. not much? no. martha stewart was at the height of her wealth, the height of her glory. she could do no wrong. and then something like this happens. tough questions these days for martha stewart. a federal prosecutor tells cnn that martha stewart is among those under investigation for suspected insider trading. all of a sudden, here was martha stewart, a picture of perfection, and she's under investigation by the feds.
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it was shocking. investigators want to know whether she had inside information to sell her imclone shares right before the stock plummeted. at the center of the scandal was sam waksal. sam waksal and martha stewart were in the same social circle, high-level new york society. sam waksal was someone that she trusted. i met martha because i went out with her daughter for a long time, and alexis introduced me to mom. sam was-- i don't want to say an older gentleman, but substantially older than alexis. i spoke to martha about my business, her business, as well as virtually everything else. hope is brewing in the laboratories of imclone systems. imclone was my biotech company.
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it was a company that's making great cancer drugs like erbitux. erbitux, it had a lot of potential. and as a result, the stock really popped. do you think that this can be $1 billion drug? i do indeed. martha felt like it was a vote of confidence in her friend that she was a shareholder in the company. that drug is a good drug. it's saving lives. it will save lives. it's a cure for cancer. the company was applying to the food and drug administration to get approval for that drug. so the stock price of imclone depended very, very much on what the fda would determine. we statistically had proven that our drug worked. the erbitux process was one that had a hiccup. sam had learned that the fda, in late 2001,
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was not going to allow imclone to file an application to get erbitux approved. for investors, that's really negative news. and he knew the stock was going to take a tumble. there is one stock on the nasdaq really getting knocked around here today. imclone systems is tumbling more than $9. that's about 20% of its value. shares of imclone, which we've talked a lot about today, did fall after the fda rejected the company's application for a new cancer drug. [ominous music] there were really millions of dollars at stake for sam waksal. but december 27, which is the key day before imclone stock had plunged, he goes to his stockbroker peter bacanovic and says, in effect, sell all my imclone, and all my relatives are going to sell all their imclone.
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before that information became public, authorities say waksal's relatives sold more than $10 million in imclone stock. mr. waksal himself had tried to sell approximately $5 million worth of stock prior to this announcement to the public. when dr. waksal receives this bad news from the fda, he receives that only in his capacity as ceo of the company. when he takes that information and instead tries to profit from it or avoid losses, that's insider trading. insider trading is a crime because it allows insiders to get ahead of everybody else, so that they can profit at the expense of other people. four fbi agents arrived at 6:00 am wednesday morning at samuel waksal's soho, new york, home to arrest and put him in handcuffs. so what did the government end up charging you with? oh, all kinds of crap.
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insider trading. um. in addition to insider trading, waksal is accused of lying to the securities and exchange commission. i don't remember all of the charges. i mean, you probably have them in front of you. obstruction of justice. obstruction of justice. yeah, they always do that. and perjury. he initially maintained his innocence. but by the fall, he decided to plead guilty. all right. a tremendous fall from grace for the former chief executive of imclone systems. i've made some terrible mistakes, and i deeply regret what has happened. i was wrong. because of sam waksal's enormous trades, the sec started looking at other people. they saw martha stewart had also sold the same time that sam waksal did. did you tip off martha stewart? did you tip her off? so the question arose, was she engaging in insider trading? timing is incredibly suspicious.
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she sells on one day, as does waksal. the stock tanks the next day. no charges have been filed against her. but the investigation continues, and i spoke with a government source today who said the circumstantial evidence against her does not look good.
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as we've reported, our good friend martha stewart has been in the headlines lately, fighting allegations of insider stock trading. in the midst of this scandal, martha still goes to her gig at cbs. martha, it's good to see you. hi. well, we're going to make salad, but-- we are. but first, let me ask you a few things about all this. you've released a statement. and so they thought, no one's gotten to ask her the questions. so we're going to ask the questions. but you haven't publicly commented on this. what do you say about the allegations here? well, as you understand, i'm involved in an investigation that has very serious implications. what was clear from the tape is that she didn't want to deal with it. i'm just not at liberty at this time to make any comments whatsoever. and i certainly hope that the matter is resolved in the very near future. well, the latest twist in the story is-- martha happened to be cutting a head of cabbage with an enormous knife. and it was a suddenly very fraught scene.
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and she starts chopping with an intensity-- this whole situation of you-- --that no stepford wife could match. well, again, i have nothing to say on the matter. i'm really not at liberty to say. and as i said, i think this will all be resolved in the very near future, and i will be exonerated-- i know that-- --of any ridiculousness. she looked like she was about to stab the anchor. and i want to focus on my salad, because-- one more question. --that's why we're here. one more question about this, and the media frenzy that surrounded this the last week or so. i am the ceo of a new york stock exchange listed company, and i don't want to be on any covers of any newspapers for a long, long time. that's the story. all right. thank you very much. let's cook. yeah, great. summer salads. right. what have you got for us today? well, we have a lot-- the oddity of that scene only reinforced the interest in the story, and martha's failure to explain what the hell happened here. [lively music]
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investigators wanted to know why martha stewart sold her shares of imclone stock when she did. she had been interviewed twice by the securities and exchange commission, fbi, and the us attorney's office in the southern district. there were also interviews conducted of peter bacanovic. the key fact about peter bacanovic is that in addition to being a social friend of both martha stewart and sam waksal, he was their stockbroker. on december the 27th, peter bacanovic is on vacation in florida. and so all of these trades are being placed through his very young assistant, doug faneuil, who i think is roughly 24 years old at the time. [phones ringing] so there was this flurry where doug faneuil had more than six phone calls with peter bacanovic right as the market opened. bacanovic understands the import of waksal trying to dump all
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of his stock on the eve of this fda decision. and without missing a beat, bacanovic says, oh my god, get martha on the phone. [airplane engine roaring] she was on her way to a resort in mexico. the plane stopped in texas to refuel. and at that point, martha stewart got the message. she called in to doug faneuil. she says, what's going on with imclone? faneuil says, well, sam waksal is trying to sell all of his stock. peter thought you might want to act on it. and she then sells all of her stock. she sold nearly 4,000 shares of imclone systems. by selling, she avoided losses of about $45,000. [dramatic music] martha had been a stockbroker. not only that, she's sitting on the board of the new york stock exchange. it's not like she can say, well, i don't know, i'm just a homemaker.
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i don't know anything about stocks. when they found out that they were being investigated for this, they had to come up with a story. she had sat down with peter bacanovic, and they had effectively cooked up a false story. the first story from peter bacanovic was that martha stewart was selling her imclone stock because it was a tax strategy, a tax loss strategy. a story which really didn't make much sense, because the stock wasn't sold at a loss. it was actually sold at a profit. then they changed their story. the $60 story. that martha had previously agreed with peter that if the stock fell below $60 a share, that they would sell. and that story just doesn't hold up under scrutiny. that's a crime, because it's a crime to give false statements to an fbi agent, and also to the sec. not only had she not been truthful, but she had taken steps in order to conceal the proof, to obstruct the investigation.
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she also added that she hadn't spoken with peter bacanovic about the substance of the investigation. she said, look, this is my recollection, and peter bacanovic has the same recollection. we asked, how does she know if she hasn't spoken to him since the day of the trade? to which she responded, i'm a busy woman. i have a business to run.
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[dramatic music]
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martha, martha, martha. allegations of insider trading of imclone stock have catapulted the domestic darling into the media limelight. is this the worst time of your life? well, i thought a divorce was the worst time of my life. this is far worse. 4,000 shares of imclone stock into a soap opera drama. it's like chinese water torture. you get another revelation, another revelation. for the media, this was red meat. all anybody seems to really care about is, did a famous lady sell some stock? the new york post in particular was relentless. i want to focus on my salad. she was a meme before we even knew what memes were. nobody move or the gingerbread man gets it, i swear! the joy that people were taking in making fun of her-- yeah.
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martha then said, i look forward to the day when people stop thinking i'm guilty and get back to thinking i'm cold and arrogant, she said. --it was really very personal, and some of it was quite vicious. martha, why do so many people hate you? well, the people who you think hate me don't know me. it's hard to describe. i mean, i don't know why people don't like me. [gentle music] i think the part of this scandal that was most probably disorienting for her is losing control. stand by, please, on the floor. camera two, martha. keep in mind, this is a person who has really cultivated her image. today's project is covering these three chairs. a settee and two chairs, actually. this is somebody who had built their entire persona on always
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knowing the right thing to do. you did a fantastic job, martha. well, i'm learning. for the first time, that is-- and then all of a sudden, it's out of her control. mark's happy on the floor. control room? we're done. ok. martha's wrapped. thank you very much, martha. yeah. all right. can i just say something to everybody? yeah. i'm very grateful for all of you for sticking by and living through my personal horrible nightmare. you have this unguarded moment where she's trying to say to everyone, look, i'm going to keep going no matter what. thank you for doing the same. but she does it in a very martha way, which is to literally do it while she's still working. everything that-- i mean, i have not been accused of one [bleep] thing, ok? this has been six months of the worst torture. actually, what month is this? nine months.
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it's been nine months of the worst imaginable torture. she blows off this tiny bit of steam. i have never kept my mouth shut ever in my life, and this is the first time i've ever done it. and it's very hard not to go on larry king tonight, i'm telling you. now, i think any other executive would think this is a moment to put down the staple gun. [laughs] maybe call an all-staff meeting. not martha. so thank you, and i hope that you all think good thoughts, and we get through all of this. they seem hell-bent on destroying me for whatever reason. and it's very, very unfair. so. we agree. well, i hope so we're all with you. they're coming at you because-- i'm chopping cabbage. [laughter, applause]
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for her, there is this real humiliation and shame and being put through this process that fundamentally she feels she doesn't deserve. you know, the thing about martha at that time, to become martha stewart, martha stewart had to have a fanatical determination. and that did not include the ability to admit that she was wrong from the beginning in this situation. but boy, did she pay a very high price. we're here this afternoon to announce the filing of criminal charges by this office, and civil charges by the sec, against martha stewart and peter bacanovic. the martha stewart case was the first time most americans had probably heard the name james comey, but what they didn't know is they'd be hearing that name a lot as the years passed. now, when comey brought the charges against martha stewart,
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he emphasized, we're charging you for lying to the federal authorities. this criminal case is about lying. lying to the fbi, lying to the sec, and lying to investors. that is conduct that will not be tolerated by anyone. so ultimately a decision is made not to prosecute her criminally for insider trading, and only charge her with the obstruction of justice and false statements. martha stewart is being prosecuted not because of who she is, but because of what she did. were you surprised by the charges, none of which says insider trading? the us attorney said today, this is not about martha and who she is. oh, yes, it is. it's entirely about that. stewart was charged not with insider trading, but rather with lying to protect herself from the insider trading charges she wasn't charged with. there were definitely questions raised by some. is this case being filed to send a message?
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it was an environment where scandal, white-collar crime, was regularly in the news. look, maybe she's just gotten caught in the crosshairs of a bad moment in american history. it seemed like there was a corporate scandal announced every single week. these big corporate executives playing fast and loose. these were massive financial frauds embroiled in just huge scandals. and right now the public is clamoring for heads. there's a kind of witch hunt potential here. comparing to what martha stewart did, peanuts. i think she's getting a raw deal. i feel that she has been somewhat singled out. she's probably guilty, but i feel like she's being taken advantage of because she's a woman. i think there was this idea among professional women that men have gotten away with a lot worse. should she go to jail?
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let's say it's up to you. there are people out there doing way worse. why aren't they going after enron's executives that bilked billions out of people? but then there was also this other side. if she lied to federal investigators, should they have just looked the other way? look, the last thing we wanted to do was have an anchor tied to us that had the name on it called martha stewart. a criminal's a criminal. i can't do it. so she shouldn't be able to do it. go ahead, man. let her hang. i mean, what are we supposed to do? oh, well, we shouldn't do it because it's martha stewart. she lied to us, but that's ok. it's martha stewart. the government gave her every opportunity to come clean. we gave her every opportunity to fix it. martha, martha! she didn't. and she was prosecuted for it. [chatter]
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[gentle music] [upbeat music] tonight, martha stewart in her final interview before her trial. how is she coping in this holiday season that she's famous for celebrating? martha stewart is next on larry king live.
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by the way, we looked up our records. you've been on five times over the christmas holidays in this show. and i've always enjoyed each and every appearance. and six other times. you're breaking a record for appearing on this show, always in better circumstances. i know. is this the worst holiday ever? it's the saddest holiday ever. it's-- that was probably a hard interview for her to do. it's just different than the glue gun-- hot glue gun. yeah, look. --and the mistletoe, and the-- it's a token present. --the turkey basting. because i want to get you in the cooking mode for the holidays. ok. this is a whole different ballgame. is all of this very shocking to you? no one is ever prepared for such a thing. i wouldn't imagine. no one. and no one is ever strong enough for such a thing. no one is-- you know, you have no idea how much worry and sadness and grief it causes. you think most people are rooting for you? i certainly hope so. [chatter]
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the east coast is bracing for another beating today as two winter storms are about to come together. the snow is on its way, we are told, and it is going to be a big one. the first day of trial, i commuted in across the brooklyn bridge and immediately saw what looked like a circus tent. and then i realized, oh my god, that's for this trial. i got off the subway, like i always do. there were a lot of white trucks with the satellites parked blocks and blocks away from the courthouse. and i just remember thinking to myself, this is going to be a strange day at work. [chatter] how do you feel today? just great. did martha lie to the fbi? that was the only issue in the case. oh, nice martha. i got a nice martha. what did she say? not too bad? just great. just great. oh.
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now, you know her story well. martha stewart. you even get daily reports on what she wears to court. there was intense scrutiny of martha stewart in the courtroom. martha stewart looked a little tired, and in her dark brown pantsuit, deadly serious. any way they could punch holes in martha, they did. a lot of comments on this, about what should she wear. i learned something new. replete with a birkin bag. martha's beautiful bag. what's a birkin bag? highlight the bags for us, anderson. i'd never heard of a birkin bag. and there were articles comparing me to martha stewart, pitting one woman against another. our looks, what we wore, demeanor. i thought it was pretty crazy. it's sad to me that people want to read that stuff. unfortunately, that's the world we live in. i think martha stewart is an amazing woman. i have tremendous respect for her. for whatever reason, martha stewart's defense
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appeared to believe that they could play on her celebrity in order to influence jurors. and i think it's a tragedy and a travesty, what the federal government has done. not only to her, but to the shareholders of omnimedia. they had a celebrity chair right behind her, and there would be a different celebrity that would cycle in. i came to support a friend. i think it was just a sideshow, to tell you the truth. oh, which celebrity is here today? but the truth is, martha stewart had an immense star power herself. fairly early on in the case, we called doug faneuil to testify. doug faneuil talked about how martha stewart had been nasty to him. the defense produced an email in which he wrote to a friend, "ps, martha yelled at me again today. but i snapped in her face, and she actually backed down. baby--" referring to himself-- "put ms. martha in her place." some drama. you see that baby face right there?
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he's a trained killer as a witness. doug faneuil was close to a perfect witness. faneuil recounted the call from stewart. "peter thought you might like to act on the information that sam is trying to sell all of his shares." "all of his shares?" stewart responded. "well, i want to sell all my shares," stewart said. he was just a kid. he was just doing what he was told. he was not some master criminal. also called to the stand today, ann armstrong. she is martha stewart's personal assistant. annie did not want to be on that witness stand at all. and that was so abundantly clear. she had a very emotional moment on the stand. she started crying when she mentioned how martha stewart had sent her a plum pudding for christmas. this was a trial that did not produce a lot of emotion.
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she testified that on december 27, 2001, she received a phone message from peter bacanovic that he thought imclone was going to sell downward. when she received the message, she typed it out in her computer. four days before martha stewart is asked to give an interview with the fbi. she had asked her assistant to pull up that very same message, and deleted the message. then martha, somewhat flustered, says, put it back. that little piece of evidence is so damaging to martha, because it shows what lawyers call consciousness of guilt. she's a friend of mine. mine too. you know her well. i am devastated that martha didn't testify. i would have said, testify. if she got on the witness stand and told the same fairy tale to the judge and jury that she told to the fbi,
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she'd get a longer sentence. [ominous music] the feeling in the courtroom, for me, was one of just tremendous sadness. unjust. destructive. very, very destructive. what was the trial like for you? exhausting. difficult. why did you attend every day? well, i have to be there for my mother. you couldn't have kept me away. [chatter] there was so much anticipation. they wound up deliberating for three days. we were all lined up, every network. we were really only inches apart.
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and i saw all these runners. and i said to our team, which was much smaller, i'm getting nervous. how are we going to keep up with them? and i'll never forget it. there was a young producer who said to me, very casually and confidently, look at their shoes. and i looked down, and many of them had heels on or whatever. and i looked over to our team, and they all had sneakers, and they were ready to run. and i thought to myself, we're good. we're going to be good. we are awaiting word from inside the courtroom. and stand by seven full, and dissolve out to mary. cue her. go, go, go. test
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growing up, my parents wanted me to become a doctor or an engineer. those are good careers! but i chose a different path. first, as mayor and then in the legislature. i enshrined abortion rights in our california constitution. in the face of trump, i strengthened hate crime laws and lowered the costs for the middle class. now i'm running to bring the fight to congress. you were always stubborn. and on that note, i'm evan low, and i approve this message.
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[tense music] hello. come on. let's go. [horns honking] get out of the street. let's go. out of the street, folks. [chatter] [frantic music] guilty! what is it? guilty? the noise is something that i remember. it's alive. guilty! guilty? and stand by seven full, and dissolve out to mary. cue her. start with count one, guilty? i couldn't see it, but i could hear all the noise behind me, and so much commotion. and you knew, ok, it's over. i couldn't see it but i
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could hear the noise behind me. >> go, go, go. >> we're just hearing word. count 1 is guilty. all counts against martha stewart, guilty. each count having a maximum penalty of five years in prison and $250,000 fine. >> reporter: were you shocked? >> yes. i actually fainted. it was so horrifying and incomprehensible. even those around me didn't know. >> this would mean that she could not be the ceo of her company and a real possibility that she would be going to prison.
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>> calls started coming in and the phones ringing. this television station amount one. various international partners. everyone was dropping her. the lead director put his hands up and said don't jump. not long after, we had to let folks go. martha stewart was sentenced to five months in prison. that was the minimum. to be immediately followed by five months of house arrest, which stewart asked to serve at her home in bedford, new york, >> martha stewart was sentenced to 5 months in prison. that was the minimum. c
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she was asked to serve at her home rather than other homes. >> the judge also ordered two years probation and a $30,000 fine. >> all of the momentum that was built up just stopped. that was a slow and the struct effect. in many ways, the company went off the rails and it was a huge mess. that was when i left.
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>> which television. >> it is shameful for me and my family. and for my company and all employees and partners. >> this case had all the makings of a greek tragedy. here you have the goddess of perfection, martha stewart, revealed to be a mere mortal with a fatal flaw. if she had simply told the truth , none of this would be remembered. it would be no criminal prosecution. >> what was a small personal matter came over the last two
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years. an almost fatal circus event of unprecedented proportions. thing i would not be taken down. >> i was choked and almost suffocated during that time all the while more concerned about the well-being of others then for myself. >> keep denying something. that is how you create crisis. >> what was the point. she probably made more money in a day than $45,000. >> it is way more than she saved.
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>> martha stewart reports to prison today. >> i hope the months go by quickly. you expect this person to be the person. >> i am not afraid whatsoever. >> i remember thinking, that is it. >> i will be back. >> board did i underestimate martha stewart.

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