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CNN CROSSFIRE

Martha Stewart Sentenced

Aired July 16, 2004 - 16:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


UNIDENTIFIED MALE: CROSSFIRE -- on the left, James Carville and Paul Begala; on the right, Robert Novak and Tucker Carlson. In the crossfire: Martha Stewart calls it a shameful day.
(BEGIN VIDEO CLIP)

MARTHA STEWART: What was a small personal matter came over -- became, over the last two years, an almost fatal circus event of unprecedented proportions.

(END VIDEO CLIP)

UNIDENTIFIED MALE: Is making an example of Martha Stewart really the recipe for fighting white collar crime or did she get what she deserved.

(BEGIN VIDEO CLIP)

STEWART: And I'll be back.

(END VIDEO CLIP)

UNIDENTIFIED MALE: Plus...

(BEGIN VIDEO CLIP)

G. GORDON LIDDY, RADIO TALK SHOW HOST: Back on the "G. Gordon Liddy Show."

UNIDENTIFIED MALE: Watergate's G. Gordon Liddy talks about Stewart can expect behind bars.

Today on CROSSFIRE, live from the Washington University, Paul Begala and Tucker Carlson.

PAUL BEGALA, CO-HOST: Hello, everybody. Welcome to CROSSFIRE. Martha Stewart received a lenient prison sentence today, but why on earth is she being locked up at all?

TUCKER CARLSON, CO-HOST: Well, here's the real news, yet another Democratic fund-raiser goes to prison. Will there be any left? But you don't have to like Martha Stewart to feel the injustice of her sentence, and we will, right after the best political briefing in television, our CROSSFIRE "Political Alert."

Well, earlier this week, John Kerry told Hillary Clinton that she was not welcome to speak at the Democratic National Convention in Boston. Apparently, he has changed his mind. Kerry now says Mrs. Clinton will be allowed to announce her husband from the podium.

Wait a second. Isn't this backwards? Shouldn't he be introducing her? She's the one who holds elective office; he's the one without a steady job. It's a second-class offer, and it's wildly patronizing.

Kerry might have well have asked Mrs. Clinton to be a good little girl and fetch him another drink. Kerry's assumption seems to be that a woman's value derives from her husband's job alone. It doesn't matter how high she rises. Even if she becomes a U.S. senator, she can never be as important as the man she is married to. It's outrageous, and it's time for the Kerry campaign enter the 21st century.

More to the point, it's time for the women of the Democrat party to rise up and overthrow the demeaning, patriarchal, liberal male establishment that depresses them and has for so long. Free Hillary Clinton!

BEGALA: Tucker, you're a feminist now. Look, the Democratic party made a mistake. People called him on it. Senator Kerry corrected the mistake and should be congratulated. Hillary Clinton is the most admired woman in America.

CARLSON: Then why isn't she getting...

BEGALA: We're honored that she'll be speaking at our convention in prime time.

CARLSON: Then she should be giving a real speech. She should not be introducing her husband as if she's not a significant figure in her own right.

BEGALA: (UNINTELLIGIBLE), you're saying her last convention...

CARLSON: I think I respect her...

(CROSSTALK)

CARLSON: I think I respect here too much.

BEGALA: One day she'll be saying I accept your nomination...

CARLSON: Whoa! I can't wait!

BEGALA: ...and then saying I solemnly swear to faithfully execute the office.

Well, folks, Diogenes can hang up his lantern. We've finally found one honest man, Republican Senator Chuck Grassley. You see, when President Bush was urging Senator Grassley and others to pass his tax cuts to the rich, Mr. Bush promised they would create 6 million new jobs. Well, so far, he's about 7 million short, since we've lost a net of 1 million jobs since the Supreme Court installed Mr. Bush. This makes George W. Bush the first president since Herbert Hoover to preside over a loss of jobs.

Well, now, Senator Grassley has told Bloomberg Radio, when Mr. Bush promised millions of jobs, "his economists screwed up... [Bush] was not right in not questioning his economists," says Senator Grassley.

In other words, Mr. Bush either misled us or was misled by those he relied on. It seems as though Mr. Bush has been just as dishonest about j-o-b-s as he was about WMDs.

CARLSON: Yes, ha! So here you have a conservative who disagree with the Bush administration. News from nowhere, I disagree all the time. But I will say...

BEGALA: He wrote the fact that he lied to them.

CARLSON: ...that your attempts -- they didn't...

BEGALA: They lied to him, just like everybody who voted for the war was lied to.

CARLSON: They didn't -- this has got to be hyperbole. It's so over the top that it's not creditable.

BEGALA: Oh, they were fibs. They were fabrications.

CARLSON: I will say, Paul, that your attempt, and consequently, the Kerry campaign's attempts to paint the economy as in some great depression are ludicrous. People don't buy them. It's a joke. Actually, it's growing faster than it has in 20 years, and you know it.

BEGALA: That's not true.

CARLSON: It is true.

Well, you thought the Republicans might try, even just a tiny bit, to rein in the nanny state, didn't you? Well, fat chance. The people who run Medicare have just changed their policy and declared obesity, being fat, a disease. That's right, a disease, like something you might catch from a water fountain or a public swimming pool.

Forget to wear your mittens and, boom, the next thing you know you weigh 350. Pretty funny, except that, thanks to this decision, millions of your tax dollars may soon be going to pay for diet programs, psychological counseling and probably stomach stapling.

Worst, the idea that people are responsible for their own behavior just took yet another hit, as if we need another. You want three Big Macs for lunch? Great! Have a terrific time; we support you. But please, do not ask the rest of us to pay for it. BEGALA: Well, Tucker, of course not, but obesity leads to heart disease.

CARLSON: Yes.

BEGALA: It leads to diabetes.

CARLSON: It leads to disease. It leads to disease.

BEGALA: It does, and so I would much rather spend a little bit of money up front preventing disease than a whole lot of money afterwards curing and treating the disease, Tucker.

CARLSON: You're missing -- you're missing the principal.

BEGALA: I mean it's just not (UNINTELLIGIBLE)

CARLSON: Paul...

BEGALA: The Bush administration is right, for once in its life.

CARLSON: Actually, not for the first time. You're missing the principle. The question is not, is being fat bad for you. Of course it is, and it's also very sad when people suffer from it.

BEGALA: It's also expensive for everybody else who's not fat.

CARLSON: That's exactly right. That's exactly right.

BEGALA: And that's why we should try to help people.

CARLSON: But it is not a disease. It comes from voluntary behavior.

BEGALA: These are physicians and...

(CROSSTALK)

CARLSON: Devaluing the term -- Devaluing the term is bad for us. Come on!

BEGALA: Well, Alan Abelson of "Barron's" notes that the chief economist for Morgan Stanley has produced a rather sobering portrait of job creation in the Bush economy.

Over the last 31 months, jobs have risen 0.2 percent, whereas the average gain in a recovery is 7.5 percent. What's worse, 81 percent of all the jobs created in the last year have been in the low paying sector. So keep that in mind the next time you hear President Bush give a rah-rah speech about how great the economy is.

So here's the big question for me: is Mr. Bush clueless or is he deceitful? You pick. I can't decide.

But maybe President Bush has a different strategy. Maybe his economic plan is based on his own life experience that people should get rich the way he did, simply cash in on your daddy's name and your family's trust fund.

Look, if you want to create good-paying jobs, we need a real leader, not a cheerleader. And that should be the Kerry (UNINTELLIGIBLE).

CARLSON: You know what? That's your second alert in a single show accusing Bush of lying about job numbers. And I'll -- but I'll ignore that because it's boring, and it's not true. But I will also say, Paul, you're on thin ice when you attack a man for inherited wealth. Considering the nominee that the Democratic party has now this year, I think that's low.

BEGALA: Well, the difference is...

(CROSSTALK)

BEGALA: The difference is...

CARLSON: No, no.

BEGALA: John Kerry has a plan for other people to get rich.

CARLSON: Really?

BEGALA: George Bush has had a plan that has plunged us into debt, deficit, recession and job loss. That's the difference.

CARLSON: I can't compete with your bumper stickers.

BEGALA: That's right. You should switch parties.

CARLSON: I totally give up.

BEGALA: Come to my side. Come to my side.

CARLSON: You know, if John Kerry is elected and that kind of rhetoric stops, it's worth it.

Well, what's next for Martha Stewart? Will her prison sentence mean hard time? And you know exactly what I mean when we say that. Will she get a break from an appeals court? And we'll talk to someone who's done time as a result of a high profile case, G. Gordon Liddy, next on CROSSFIRE.

(COMMERCIAL BREAK)

CARLSON: Welcome back. A federal judge sentenced Martha Stewart today to five months in prison, five months of home confinement, two years probation and a $30,000 fine for lying about a stock sale. She's free pending an appeal of her conviction.

Moments ago, Stewart's stock broker, Peter Bacanovic, received a similar sentence, but only a $4,000 fine. It's all an even greater outrage in mixing raspberry pink stripes with candy-orange polka dots.

And here to tell us why, we're joined, from New York, by criminal defense attorney, Mickey Sherman, and in Boston is law school professor and former prosecutor, Wendy Murphy. Here in Washington is one-time Watergate conspirator turned all-star radio talk show host, G. Gordon Liddy, who, in fact, did time at the federal prison in Danbury, Connecticut where Martha Stewart is likely to be sentenced.

BEGALA: Gordon, thank you for joining us.

Wendy and Mickey, good to see you again.

WENDY MURPHY, FORMER PROSECUTOR: Good to be here.

BEGALA: Wendy, let me start with you, as Tucker mentioned, as he opened this segment, Ms. Stewart was not convicted for insider trading. She wasn't even charged. She didn't swindle anybody, but she lied to the government. Is the lesson here, for all the citizens out there, that they just shouldn't talk to federal investigators at all?

MURPHY: Well, that's one of the lessons learned. I think Martha Stewart, if she could do it all over again, would never have gone in to talk to them at all, because they often do trap you in there. If you lie, they prosecute you. It's one of the things they do.

And lots of people would never go in there, but she sort of had to, because I think it would have killed her stock value not to. We were all watching to see whether she was going to take the Fifth or go in and cooperate. She wanted us to believe she was cooperating, and she suffered for it at the end of the day. There's no doubt about it.

CARLSON: Now, Mickey, it doesn't seem to me any question that Martha Stewart would not be going to jail if she weren't famous and that her prosecution has probably something to do with the political aspirations of prosecutor. We've certainly seen that a lot over the last 15 years.

Don't you think there ought to be a law passed to prevent prosecutors from running for higher office?

MICKEY SHERMAN, CRIMINAL DEFENSE ATTORNEY: Well, it's never going to happen. And where else are we going to get people running for office, other than ambitious folks like that?

But I'm not so sure the process is that corrupt. That's the problem with a high-profile case, and you've got the appearance of a rich man's justice. They have to show that they're being tough on Martha Stewart like they are on Jesse James Jackson.

BEGALA: Gordon, let me bring you into this. First off, as Tucker said, you actually did time at the Danbury Federal Correctional Institution.

LIDDY: First of all, OK...

BEGALA: Was it a women's unit then?

LIDDY: No. No, not a women's. BEGALA: OK, good.

LIDDY: First of all, I'm a former special agent of the FBI and bureau supervisor. I'm a former defense council. I'm a former prosecutor, and just about everything else you can think of.

BEGALA: And veteran.

LIDDY: I also happen to know Martha Stewart. So my view of this thing is there was no underlying crime. They suspected that there was insider trading, and they questioned her about that.

She has been found by a jury, as a matter of fact, to have lied to an FBI agent, but she lied on -- about a non-crime. So it's very difficult to obstruct justice when there wasn't any justice to obstruct.

So the lesson is, as you suggested, and if she had had, in my view, a good lawyer, they would have told her, look, they suspect you of doing something wrong. You go in there and you tell them, on advice of counsel, I have nothing to say to you, nothing, because there's a Section 1001, Title 18. That's the thing. If you lie to an FBI agent, you know you're in trouble. So...

BEGALA: You just don't go in...

LIDDY: ...you just don't go in there. If you don't go in -- if you don't speak to them, then they're -- it's impossible for anybody to twist what you say or anything like that.

SHERMAN: Isn't the better answer you just don't go in? And that sends kind of a negative message that you should never cooperate with the government, because if you lie about a crime that you're not even accused of committing, you're going to jail.

LIDDY: Even if you don't lie, if they succeed in convincing a jury you have, you go to jail. So they can't even indict you for it if, as you say, you don't go in.

MURPHY: But the point...

(CROSSTALK)

MURPHY: Yes. The point that makes this particularly unfair, with regard to Martha, is that other Joe on the streets can go in, take the Fifth, and nobody ever cares, no one ever does anything about it. It's that we were all watching to see whether she was going to take the Fifth or go in there and assert her Constitutional rights and what was going to happen to her real life and her real stock value if she did that. That's what makes the selective nature of her prosecution so terribly unfair.

And there's no doubt about it. The prosecution used her. They got a lot of bang for the buck by going after her. They knew that nobody would come out in droves against her, because she's sort of a mean woman, which is why I like her, personally. But they knew they could politically get away with it, and that's a terribly unfair way to run a justice system.

CARLSON: Now, Gordon Liddy, put a sort of human face on all this. What is it like to be sitting, say, at home, knowing you're about to serve a lengthy prison term?

LIDDY: Well, you just make sure that everything's in order. You know, you've got you Will made and your affairs are in order and things like that. And then you kiss everybody goodbye and off you go.

CARLSON: How humiliating is it when you get there? What do they do?

LIDDY: It's not humiliating at all, really. I mean you have to understand there's two -- take any prison population. Cut it right in half. On the one half, you've got the prisoners, and the other half, you've got the guard force.

Now, the prisoners, no matter what their absence of formal education might be, they are shrewd, psychologically strong, aggressive personalities. They are professional criminals. They are not angry with police when they are caught. They're angry with themselves, because it was their plan that went south.

And so what do they do? They make a plea bargain, typically, to spend the least amount of time in prison they possibly can. While they are there, they take counsel with the fellow prisoners of their criminal specialty. You know, the burglars hang with burglars and, you know.

CARLSON: So who does Martha hang out with, the other interior designers?

LIDDY: But the point of the matter is they want to spend the least amount of time in prison as possible.

Now, the guard force, on the other hand, these are people who wanted always to be in law enforcement, wanted to be police officers, couldn't make it into the academy, much less out of the academy. So then they want said, well, I'll be a firearm, but they keep setting fire to themselves, so they can't do that. They can't go back to the farm because their father won't let them near the machinery. They keep breaking it.

Finally, in desperation, they become prison guards. They are the world's, as a class, stupidest people.

CARLSON: Ah, now...

BEGALA: I've got to say, I grew up with a pal of mine who became a prison guard. He's a great guy, but I didn't mean to defend the prison guards.

But let me come back to...

(CROSSTALK)

LIDDY: I'd love to debate you on the prison guards.

BEGALA: Mickey Sherman, let me ask you this question. If it is a crime for a citizen of this country to lie to the government, why isn't it a crime for the government to lie to its citizens? And then why isn't George Bush heading off to Danbury, Connecticut?

SHERMAN: That's a great political question. But the better question: why is it OK for police or law enforcement to lie to suspects in order to get them to confess to something. So it's...

BEGALA: How does that happen?

SHERMAN: Well, you know, it's your classic things. Two guys are allegedly committing a crime. They are arrested. The police go to one guy, your partner just told us that you drove the truck, you fired the gun, you stole the other watch. And he's lying in order to get the other guy to confess, standard police work.

It's acceptable police work. So the government can lie, but the citizens can't.

MURPHY: And let me add to that, and let's bring it right home to Martha Stewart's case. The government agent, Larry Stewart, not only lied, committed perjury, which is a very serious material lie for which he's being prosecuted. And if that isn't unfair, I don't know what is.

Look, everybody thinks this is no big deal that this ink expert lied about whether or not he tested some of the materials. Look, in the Scott Peterson case, one of the cops made a mistake that we don't even think is a real lie, an intentional lie, and they're having a big hearing next week to see if the case should be dismissed.

And what he lied about is irrelevant. This lie, in Martha's case, was a serious lie that went to the heart of the prosecution.

BEGALA: Amen. Hang on, Wendy. Wendy, just hang on just a second. Wendy and Mickey, hang on. Mr. Liddy, hang on for just a second.

We're going to take a quick break. When we come back, I'm going to ask G. Gordon Liddy about social life in prison. Is it really all the glamour that the movies suggest that it is?

And then, on a more serious note, wildfires are threatening more homes today. Wolf Blitzer will bring you the latest on who is at risk, right after this break.

(COMMERCIAL BREAK)

WOLF BLITZER, CNN HOST, WOLF BLITZER REPORTS: I'm Wolf Blitzer in Washington. Coming up at the top of the hour: Martha Stewart is sentenced to five months in prison and five months home confinement, but the domestic diva vows she'll be back. Nevada firefighters say they just can't get a break. Flames threaten 1,000 homes in the Carson City area.

And he's been a presidential candidate himself. So what does the Reverend Jesse Jackson think about the current campaign? I'll ask him.

Those stories and much more, only minutes away on "WOLF BLITZER REPORTS." Now back to CROSSFIRE

BEGALA: Welcome back to CROSSFIRE. Martha Stewart may eventually have to decorate a cell at the Federal prison in Danbury, Connecticut. We're talking about the prison sentence imposed on the domestic diva today with criminal defense attorney, Mickey Sherman, who is in New York, and law professor, former prosecutor, Wendy Murphy, who is in Boston, and here in our studio, the legendary radio talk show host, G. Gordon Liddy, who once actually did time at Danbury.

CARLSON: Wendy, not everybody considers Martha Stewart annoying. There was a huge outpouring of support for her. I want to read you a letter from Eleanor Flomenhaft of Hewlett Harbor, New York. She wrote this:

"This woman [Martha Stewart] is to homemakers what Einstein was to science and Freud was to psychiatry. It would be a great waste to put this person in prison."

Do you think, as a former prosecutor, that support like this has any effect on sentencing?

MURPHY: Well, I think it does. And the judge even said today that she thinks Martha has given a great deal to society. You know, I don't know much about Martha Stewart. I've never watched her program. But I felt, as a woman, a kind of kinship with her that I thought she was being battered by the system and that she was selectively prosecuted because of her gender.

Look, if she were Jimmie Stewart or Oprah Winfrey, there's no way the prosecution would have ever gone after her for insider trading, let alone the relatively minor crime of lying to federal officials. It would not have happened.

They picked on her because, by and large, she is popular, powerful and overall unliked by enough people that they could get away with it and make a big bang, in terms of sending a message to the rest of us that we should invest in stocks because everything is all fixed now.

Well, guess what? I don't feel a great deal of new confidence in the stock market because they went after Martha Stewart for lying. I don't feel it.

BEGALA: Let me ask you about the real life of prison. You did serve time, and our audience, who maybe missed it, should know you wrote a remarkable book called "Will." You've clearly got an iron will. I don't know Martha Stewart either, but she certainly showed a lot of strength standing on that courthouse step today. Do you think she's got what it takes to get through this (UNINTELLIGIBLE)?

LIDDY: Oh, she'll do it standing on her head, absolutely. I know Martha Stewart.

BEGALA: what does it take?

LIDDY: Well, it depends who you are. I didn't have a terribly bad time in certain prisons because I was greeted with open arms by an elderly distinguished looking gentleman of Italian extraction who was accused by our government of being more organized than our government seeks to be. And he just said, you know -- and his mess hall table was piled with food. He says, from now on, you sit with me.

And when my father had passed away, and so my Aunt Connie (ph) said to my mother, have you ever been to Italy? My mother said no. She said, well, come on, we're going to go. So I went back and I said, guess what, guys, my mother is going to Italy. They said, well, where in Italy? I said, I don't know. They said, well, find out.

So I burned a phone call, called my mother, and they told me her itinerary. And I gave it to this guy, and my mother, a month later, came back. I said, how was it? She said Italy is wonderful. She said everywhere you go, my Aunt Connie (ph) and I -- she said there were these three big men. They opened all the doors for us. The rooms in the hotels were filled with flowers. They were -I've never seen it. It was just wonderful. I said thanks, guys, you know, to my Italian friends.

BEGALA: To like Mr. Soprano.

LIDDY: He said, ah, it was nothing. It took one phone call.

BEGALA: Great.

CARLSON: Mickey Sherman, first you had Robert Torricelli. Then you had Congressman Traficant, Michael Jackson, now Martha Stewart, all Democratic figures in trouble with the law. Does it hurt the party?

SHERMAN: I don't think so. I don't think there's any label, as far as politicians are concerned.

You know, there's some good news about this day, and that is that it finally -- we have the Federal sentencing guidelines, which is a very controversial issue. They're under attack, and they're going to be reviewed, and they may be going away.

But now, a great majority of the public is now seeing what the problems are with these federal sentencing guidelines. I don't mean to be political, in terms of the criminal justice issues, but there may be some good that comes out of this. It's that it will raise people's consciousness, as to do we really need to put non-violent, first offenders in jail, where there's little economic detriment to a lot of people? CARLSON: That is exactly right. Mickey, thank you very much. Wendy, thank you -- in Boston. The legendary G. Gordon Liddy, thank you very much. We appreciate it.

BEGALA: Thank you, Gordon. Great job.

CARLSON: Well, we're about to get back on the bus. Remember the bus? Next, find out if the CNN Election Express will be rolling through your town. We'll tell you. We'll be right back.

(COMMERCIAL BREAK)

BEGALA: Welcome back to CROSSFIRE. Good news, starting next week, we're going on the road. Tucker and I and Bob and James are going to pack our bags and get on the CNN Election Express Monday.

The special election bus will be in Concord, New Hampshire. As the week goes on, we will be making stops on the old Election Express in Massachusetts, at the John F. Kenney Library, in Dorchester in (UNINTELLIGIBLE) there, on the USS Constitution, in Charlestown, and then, of course -- where else -- at Fenway Park, the heart of the Democrat's convention, the city of Boston. It should be, as they say there, wicked cool.

So to check on where we will be each day, check out CNN.com/bus, or, better still, come join us on the bus. There's a lot of -- Tucker leads us in "99 Bottles of Beer on the Wall." And I sort of sit in the back going, are we there yet? It should be fun, Tucker.

CARLSON: Plus, you wear that funny hat, and you've got your little slippers and the whole thing.

BEGALA: Oh, don't tell them about the slippers.

CARLSON: Yes, OK.

BEGALA: That's kind of personal.

CARLSON: But you'll find that Fenway Park is a Democratic shrine. Come on. That's taking partisanship to a new level. You know what that is? That is the heart of Red Sox nation.

BEGALA: It is, and you've got to be a Democrat to love the Red Sox, because they're the working man's team. They're in there every year. You know, the Yankees are like General Motors. You know, this big -- they're like Halliburton. Oh, I got it in.

CARLSON: You know, that's so false.

BEGALA: Yankees are like Halliburton, and the Red Sox are like the rest of America.

CARLSON: I never even thought you would say that.

BEGALA: From the left, I'm Paul Begala. That's it for CROSSFIRE. CARLSON: And from the right, I'm Tucker Carlson. Join us next week in New England. See you then.

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