Donald Trump On Stewart: ‘That She Should Be in Jail and O.J. Simpson Is
Playing Golf in Florida Is Ridiculous’
Stewart Sowed Seeds of Her Comeback By Restocking Her Board
With Allies Like Former ABC Entertainment President Susan Lyne
Stewart’s Lawyers in Talks With SEC About Potentially Returning Stewart to CEO
Role in Five Years; Deal Could Set Legal Precedent Expanding Definition of
Insider Trading
NEW YORK, Feb. 27 2005 – LAWFUEL – The Law News Network — When Martha Stewart, 63, walks out of jail, most likely this Friday-two days before her official release date — America will be ready to embrace a reformed woman. (Sources tell Newsweek that prison officials can’t process Stewart’s release on a weekend, so they’re setting her free two days early.) The rollout of Martha’s Third Act is being
carefully stage-managed by a new team of New York and Hollywood A-listers like
reality TV guru Mark Burnett, Donald Trump and Stewart’s new CEO Susan Lyne,
the ex-ABC exec who greenlighted “Desperate Housewives,” reports Detroit
Bureau Chief Keith Naughton in the March 7 issue of Newsweek (on newsstands
Monday, February 28). “The American public loves a great comeback,” says NBC
TV chief Jeff Zucker, who is airing Stewart’s new daytime and prime-time
shows. “And her story is even more compelling now.”
During her trial, Stewart discovered she had an unlikely ally in Mark
Burnett, the creator of “Survivor” and Trump’s “Apprentice” show. Stunned by
Stewart’s slow disappearing act in her own magazine-“It was the equivalent of
McDonald’s taking down the Golden Arches,” he says-Burnett felt Martha’s fall
from grace would follow America’s favorite story line all the way to
redemption. So he asked Stewart for a meeting, at which he pitched her on two
shows: an hourlong daytime show in front of a live audience and a prime-time
reality show. Each would be loosely scripted to play off all the spontaneity
and sense of fun Burnett saw in Stewart, reports Naughton.
Newsweek reports that Donald Trump was initially cool to Burnett’s idea of
giving Stewart an “Apprentice” spinoff. Burnett finally convinced Trump by
showing him how spinoffs from “CSI” and “Law & Order” actually boosted the
ratings of the original shows. Now Trump, who considers Stewart an old pal,
has become her most vociferous public defender. “That she should be in jail
and O.J. Simpson is playing golf in Florida is ridiculous,” he tells Newsweek.
“But she took it standing up. There were no tears. No dropping to the ground.
I’ve seen very strong men who can’t handle that.”
Around the time she was first meeting Burnett, Naughton reports, Stewart
was also reaching out to another power broker who would become instrumental in
her revival: Charles A. Koppelman, the wealthy, well-connected music
impresario who is a crisis manager to the stars. Koppelman got word to Stewart
during her trial that he was willing to help her. She phoned him as soon as
her trial was over and asked if he’d be interested in joining her board. Now
as vice chairman of Martha Stewart Living Omnimedia, Koppelman is cooking up a
plan for a line of how-to DVDs culled from the 1,500 hours of Stewart’s old
morning TV show.
Stewart also moved fast to snap Susan Lyne, the final member of her
comeback machine, into place. Naughton reports that the day after Lyne was
fired as ABC Entertainment president last May, a headhunter contacted her
about joining Martha Stewart’s board. Soon Stewart herself was wooing Lyne and
had her on the board by June. Five months later, after Stewart reported to
prison, the board replaced CEO Sharon Patrick with Lyne, who by then was
getting the last laugh on ABC as “Desperate Housewives” had become a
phenomenon.
Newsweek also reports that Stewart has embraced prison life. She’s
foraging the grounds for dandelion greens and crab apples to whip into salads
and tarts. She’s teaching the other inmates yoga and how to start a business,
in between reading Bob Dylan’s autobiography and working her 12-cents-an-hour
job cleaning the administration office (toilets included). And around the
prison yard, there’s nary a whiff of Hamptons snobbery when someone sits at
her lunch table. “When my friend, an older lady, sat down with her, they
talked about microwave cooking,” says one former Alderson inmate who keeps in
contact with women there.
Stewart helped one inmate who had been disowned by her family by writing a
letter to the woman’s sister. Stewart wrote movingly of the isolation of
prison life and implored the woman to reach out to her incarcerated sister.
The letter worked and the family reunited, Stewart’s friends say. In return
for her loyalty, the inmates try to help Stewart protect her privacy, crowding
around her to block the cameras of the paparazzi.
Newsweek’s Martha Stewart cover package also includes an exclusive report
by Senior Writer Charles Gasparino on the implications of a potential deal
between federal regulators and Stewart’s lawyers-still in the early stages of
discussion-that could return Stewart to her role as CEO of her company in five
years or possibly less. In the talks, first reported by Newsweek on its Web
site last week, Stewart’s lawyers and the Securities and Exchange Commission
are considering waiving a rule that says convicted felons cannot run
publicly-traded companies. But there’s something in it for the SEC, Gasparino
reports. The deal could set an important legal precedent, making it easier for
the SEC to crack down on future cases of insider trading.
The SEC’s goal is to significantly expand its ability to charge people
with insider trading abuses in the future, expanding the definition of
“insider” to include third parties such as brokers and others who pass along
secrets and other tips to their favorite clients. (Stewart was never convicted
of criminal insider trading, just lying about the circumstances surrounding
the stock she sold after receiving a tip from her broker at Merrill Lynch that
Sam Waksal, a friend of Stewart’s and former CEO of ImClone, was trying to
unload his stock.) One SEC official told Newsweek that the fact that Stewart’s
lawyers are willing to negotiate “shows that the case has sufficient merit and
creates a precedent as to what cases have merit.”
