Appellate judge questions Martha Stewart prosecutor about juror

NEW YORK - With Martha Stewart looking on, a federal appeals judge sharply questioned a prosecutor yesterday about why no hearing was held into allegations that a juror in the homemaking entrepreneur's trial lied.

The exchange took place as lawyers for Stewart, freed from prison this month and serving five months of house arrest, sought to persuade a three-judge appeals panel to overturn her conviction for lying to the government.

Stewart is basing her appeal partly on allegations that juror Chappell Hartridge lied repeatedly on his jury questionnaire, including about a prior arrest, to get onto the jury.

Judge Richard C. Wesley of the 2nd U.S. Court of Appeals asked prosecutor Michael Schachter whether the case had been tainted because the trial judge, Miriam Goldman Cedarbaum, held no hearing into Hartridge's alleged lies.

Wesley said a juror wanting to serve on a jury in a high-profile case might think: "I don't like rich people. I don't like people like Martha Stewart who are worth millions of dollars."

"The problem is, why did he lie?" Wesley said. "And there is no answer to that because Judge Cedarbaum didn't do the hearing."

Schachter, an assistant U.S. attorney, defended the judge and said the convictions must be upheld. He said Cedarbaum had no obligation to hold a hearing because the defense failed to show that Hartridge was deliberately dishonest.

Stewart was convicted in March last year of lying to the government about why she sold nearly 4,000 shares of ImClone Systems Inc. the day before a negative government ruling about the company's cancer drug.

The prosecutor also said there was "ample evidence" of Stewart's guilt, including testimony that her next call after selling her stock was to the office of ImClone chief executive Samuel D. Waksal, demanding to know why the stock was falling.

Waksal is serving a seven-year prison sentence for insider trading. He sold his ImClone shares, knowing in advance that the government was going to decline to review the company's cancer drug, Erbitux.

Stewart was allowed to leave the Westchester County estate, where she is under house arrest, to attend the appeals hearing in Lower Manhattan. She is also allowed to leave her home for 48 hours a week for work.

The three-judge appellate panel gave no indication of how or when it might rule. Stewart has said she is appealing the case to clear her name.

Walter E. Dellinger, Stewart's appeals lawyer, also was intensely questioned by the judges when he suggested that the conviction should be thrown out because of perjury allegations against a government witness.

The witness, Secret Service ink expert Larry Stewart, was accused by prosecutors of exaggerating the role he played in testing a stock worksheet that was used as evidence at the trial. A separate jury acquitted him of perjury charges. He is not related to Martha Stewart.

The three-judge panel pointed out that the jury acquitted Martha Stewart and her stockbroker, Peter E. Bacanovic, of any charge that they lied when they suggested they had a specific agreement to sell ImClone at $60 a share.