Star witness to testify in Stewart case

The Associated Press

NEW YORK -- Martha Stewart was "very hurried and harsh and direct" in a call to ImClone Systems headquarters on the day she dumped her stock in the company, a former ImClone secretary testified today.

Emily Perret, secretary to ImClone chief Sam Waksal, said Stewart asked her what was going on with ImClone stock. The message Perret left her boss was introduced into evidence: "Something is going on with ImClone and she wants to know what."

The testimony came as Stewart got support from Rosie O'Donnell, who sat in the front row for the third day of testimony and jokingly offered a prosecutor a bag of peanut M&M's as a bribe to drop the case.

"The rest of your life, you're going to be known as the guy who tried to take down Martha Stewart," O'Donnell said she told prosecutor Michael Schachter after jurors were excused for the day. "You should have passed on this gig."

Schachter grinned and politely declined the candy. "Thanks for coming," he said.

Stewart and her co-defendant, broker Peter Bacanovic, are accused of lying to investigators about why Stewart sold her ImClone shares just before bad news about the company's new cancer drug sent the stock tumbling.

Stewart's call to ImClone took place on Dec. 27, 2001. The government says it happened just after Stewart sold 3,928 shares of ImClone.

On cross-examination, Perret said that Stewart's tone that day was no different from other days when she called.

Stewart and Bacanovic maintain they had a pre-existing agreement to sell the shares if ImClone stock fell to $60.

The government says that when Bacanovic found out the Waksal family was selling its shares in ImClone, he told an assistant to inform Stewart, who dumped her stocks.

Outside court, O'Donnell told reporters she had eaten lunch with Stewart and her family -- "the napkins matched the plates matched the forks" -- as a show of support in the face of what she called unfair charges.

"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," O'Donnell said, referring to Stewart's media company, Martha Stewart Living Omnimedia Inc.

O'Donnell, the former daytime TV host, knows something about courtrooms herself: She has fought a lengthy legal battle for damages with Gruner + Jahr, the publisher of her defunct magazine, Rosie.

Also today, the judge ruled that the government's star witness, Bacanovic assistant Douglas Faneuil, will be allowed to testify beginning Tuesday afternoon.

The decision by U.S. District Judge Miriam Goldman Cedarbaum was a boost for prosecutors because Faneuil's testimony -- which had been postponed last week -- is the most critical piece of their case.

The judge did not elaborate on the ruling.

The government has contended Bacanovic gave Faneuil with extra vacation time and plane tickets in exchange for his support for the story that he and Stewart had a $60 standing stock order.

On Monday, the government called a Merrill Lynch & Co. administrator as a witness to show Bacanovic got Faneuil's pay boosted in April 2002.

Faneuil's testimony was delayed last week after the government turned over to defense lawyers documents that could damage the credibility of his testimony. Defense lawyers argued they should have received the material much earlier, and Cedarbaum said prosecutors had been too slow in turning it over.

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