Friday, November 6, 2009

#56 - Martha Stewart Goes to Jail

It was the decade when...

Inmate No. 55170-054 brought some class to the Alderson Federal Women's Prison.

$45,673 smakaroonies. That's the dollar figure that Martha Stewart saved when she illegally sold her IMClone stock the day before its share price tanked. Quick refresher: Martha Stewart is a billionaire. A model business woman sitting atop a Golden Horde of her own making called Martha Stewart Living Omnimedia ("Living Omnimedia" sounding less like a corporation than a Sci-fi monster with a murky ontological status), a $45,000 loss is about as consequential to her financial solvency as is the 2 bucks I spend buying my coffee at the corner bodega. Less.

But sell she did. And so began a string of events that would find as its denouement the absurd reality of Martha Stewart - domestic diva and style guru to millions, the epitome of taste, elegance and poise - serving six months in the clinker alongside women for whom a mullet is anything but a seafood dinner. Of course, Martha maintained her innocence, and why not? A businessperson, especially a woman, doesn't get to the top of a major corporation and accumulate a billion dollars by playing sweet and nice with the boardroom sharks and wall street vipers. They get there by standing toe to toe, sinking to the same lows, bottom-feeding all the way to the top. Capitalism is blood sport. Martha merely had wherewithal to hide her claws in well-tailored gloves. Was the sale illegal? The thought probably never crossed her mind. Not after the shit that she has undoubtedly pulled in the past, and most of that stuff was probably legal.

While behind every great fortune there may be a great crime, this was not it. This...this highly selective and conspicuously high-profile use of government resources, this...was a trophy prosecution. Martha Stewart was the sort of attention grabbing white collar criminal that beleaguered DA's with delusions of grandeur (and future political ambitions) salivate over. Martha's highly cultivated perfectionist image and runaway success had already generated enough resentment among the general populace that the idea of bringing down this sacred cow made many hungry for some Tartare. For the wine pairing I recommend the '04 Schadenfreude. When being pressed about the stock trade on Good Morning America during a routine cooking segment we all got to watch the worm wriggle on the hook; "I just want to focus on my salad." said Martha, proving that even ice queens can sweat.

But when the not-so-blind scales of justice eventually tilted against Ms. Stewart she found herself in the surreal position of having to leave her post as one of the most powerful women in business to make license plates with West Virginian riff-raff. A backlash to all the negative press gained speed and a new cry was heard: FREE MARTHA! After months of being put through the wringer, Martha was finally getting laid out to dry. Maybe people were starting to pity the fallen goddess or maybe they felt that justice, if not miscarried, had been at least C-sectioned or perhaps they were just grateful for the Halloween costume idea, but, whatever the cause, sentiment shifted in Martha's favor. M Diddy, as was her cell-block sobriquet, had now begun to follow the yellow brick road all the way to the other Emerald City of American narrative: If she already had trafficked in "The Fall From Grace" now it was sequel time with "The Redemptive Comeback." Omnimedia stock - which had, as you could imagine, suffered though some lean times in the early Aughts - doubled in value while it's founder was in prison. Martha even started a fashion craze for Ponchos on the day she was finally released (see this AUGHT post for full Poncho analysis). Within months Stewart was back on TV with her own new daytime talk show. Martha's downfall did something special for the somewhat chilly icon, it humanized here like no PR campaign ever could.

In retrospect, Martha's show trial of 2004 highlights how the self-aggrandizement of the Securities and Exchange Commission clouded their view of the financial landscape so profoundly that the real pilfering being done by mountebanks like Bernie Madoff went unnoticed for years. But, Robespierre cant get a crowd unless he has royalty on the scaffold.

It all backfired. The SEC failed to protect Americans from the abuses of their own system and Martha walked out of prison more popular than ever before.

The moral of the story? Prison, it's a good thing.

You AUGHT to remember....

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