Academic

Martha Stewart as a bad precedent for Roger Clemens

By Tung Yin

Former baseball superstar Roger Clemens has been indicted for obstruction of a congressional inquiry, false statements, and perjury, based on his denial of use of steroids and human growth hormone during a congressional investigation.  Vermont law prof Michael McCann notes some potential difficulties in the prosecution case:

Clemens, though, is not an ordinary person. For starters, he will be able to afford the kind of legal representation that few defendants could imagine. Being able to assemble a "legal team" is itself often a marker of wealth. Clemens will likely retain seasoned and prominent defense lawyers who have tried and won perjury cases and also those who will adroitly attack the DNA evidence offered by the government. Given that a conviction could carry a prison sentence, expect Clemens to spare no expense.

It's certainly true that Clemens is super wealthy and can hire the best lawyers.  But 18 USC s 1001, the false statements statute, is a powerful tool for prosecutors, and a previous high profile defendant, Martha Stewart, should worry Clemens, given the remarkable similarities between the two cases.

Stewart was charged with lying to government agents and lawyers about a perfectly timed trade in which she sold all of her stake in a biotech company, ImClone, the day before the FDA announced rejection of its single drug; as a result, she avoided a loss of $40,000.  The government came to suspect that she had received a tip from her broker, who was also the broker for ImClone's CEO; that CEO had also tried to dump all of his shares of ImClone before the FDA announcement.  Stewart and her broker told the government agents falsely that the selling was pursuant to a pre-agreed plan.  Both were charged with obstruction of justice, conspiracy, and false statements, and convicted.

Like Clemens' case, Stewart's involved a key prosecution witness with some questionable motives.  Her broker's assistant, Doug Fanueil, was the person who actually testified to telling Stewart about the ImClone CEO's efforts (at the direction of the broker, who was on vacation), so his testimony, if accepted, was quite damning.  On the other hand, Fanueil had already pleaded guilty to a lesser charge, so he had an incentive to favor the government with his testimony.  In this regard, Fanueil stood in a similar position that Clemens' former trainer, Brian McNamee, now stands.  Indeed, McCann has sketched the argument in his column: "Clemens' lawyers will also portray McNamee as throwing Clemens under the bus to avoid a government prosecution of his own."

However, the government had two other important witnesses in Stewart's case.  One was Stewart's assistant, Ann Armstrong, who was clearly uncomfortable as she testified that Stewart used her computer to alter a phone log to obscure the message that her broker left for her.  Though Stewart immediately changed the message back, her initial alteration suggested guilty knowledge.  The second witness was her (former) good friend, who was with her on vacation when she received the call from her broker's office.  This friend testified that Stewart said her broker had given her news that the ImClone CEO was trying to sell his shares and maybe she should too; "isn't it good to have brokers who will tell you things," the friend testified that Stewart said.

Unlike Fanueil, neither of these witnesses had any reason to favor the government.  Both were Stewart's friends.  Accordingly, their testimony against her was no doubt that much more damaging, because they seemingly had no motive to lie in this way.

In Clemens' case, Yankee pitcher Andy Pettitte testified before Congress that Clemens had admitted to him about using HGH.  Pettitte and Clemens were teammates and Pettitte reportedly idolized Clemens, so again, he seemingly has no motive to lie so as to harm Clemens.

Does it matter if Clemens testifies?  Well, in the Stewart case, she did not testify, but her broker did.  Both were convicted.

Just because one jury convicted in the Stewart case doesn't mean, of course, that a different jury would convict in the Clemens case.  But there are strong parallels to the Martha Stewart case, and that one did not turn out well for the super-rich defendant.

Full post as published by The Yin Blog on August 21, 2010 (boomark / email).