Published June 14, 2002
Can this column can take some credit for the cover of Thursday's New York Daily News? You decide:
Wednesday, I called the News to ask them why the continuing saga of home makeover empress Martha Stewart and her insider trading scandal buddy Sam Waksal had not warranted much coverage in the News.
Before Wednesday, Waksal and his biotech company ImClone had been mentioned a scant seven times in the News over the last year. In the same period, ImClone had turned up in the New York Times 89 times. In the New York Post, 25 mentions since February.
Waksal had told sources of this column that his friend, Daily News publisher Mort Zuckerman, had been persuaded to go easy on him.
The very charming and savvy Zuckerman called me personally Wednesday. He told me unequivocally he never interfered with his paper's coverage of Waksal. "I never mentioned Sam Waksal's name to anyone at the Daily News, not once," he said.
The Daily News's business editor, David Andelman, echoed Zuckerman's comments. He was vehement the Waksal story had not been so interesting thus far. "We don't have the space to cover every business story. I have 25 column inches every day. I have five stories a day. We don't have a section the size of the Times," he said. "We choose our targets. If I had an eight page section, there might twice as many ImClone stories."
Andelman bridled at the suggestion Zuckerman had asked to have Waksal's story downplayed. "There are no nefarious machinations."
This was around 4 p.m. Wednesday. Neither Andelman or Zuckerman mentioned in their conversations, on or off the record, that the story had gotten so big that they were considering front page play. But Thursday morning, both Stewart and Waksal were on the front page of the News.
Bravo, gentlemen. This took guts because Zuckerman and Stewart are good friends. Martha must be steaming enough to get the wrinkles out of all her linen clothes. The full cover might be an over-reaction, but it's appropriate at this point and long overdue.
Wednesday was not a happy day for Martha Stewart. The share price for stock of her publicly owned company plummeted after news came out that one of her close friends — Waksal — had been arrested for insider trading.
Waksal, who has been at the center of a growing scandal over his cancer drug Erbitux, was hauled away by authorities and told to put up $5 million bail. The SEC says he sold off stock in his own company, ImClone, and told family and friends to do the same thing right before the Federal Drug Administration rejected his company's cancer drug application.
The Zuckerman-Stewart linkage is just the beginning of the Waksal story, because, over the years, Waksal has attached himself to many famous New Yorkers. Stewart — who the government says sold all her ImClone stock just before the FDA rejection and made $187,000 — is not the only celebrity with close ties to Waksal. Stewart, Waksal and Planet Hollywood founder Keith Barish were all partners in a failed online cosmetics company called ibeauty.com.
Waksal also counts among his close advisors the financier Leon Black, once a partner with junk bond king Michael Milken in the infamous defunct firm Drexel Burnham Lambert. Black is currently being sued by the state of California in a multi-million dollar suit related to the 1991 sale of Executive Life Insurance Co. The suit accuses Black and one of the partners of his current firm of hiding information from state insurance authorities during and after the highly-publicized purchase of the failed insurance company. Black denies the charges.
Waksal's other close buddies and business partners include music business attorney Allen Grubman, who represents most of the industry including Sony's Tommy Mottola; and the equally infamous financier Carl Icahn. In February Icahn, who plays tennis with Waksal, announced a bid to take over the ailing ImClone. The takeover, which was supposed to help Waksal, would appear to be moot now.
As for Grubman, Waksal told the Daily News last summer when the attorney's public relations exec daughter, Lizzie, allegedly backed into 16 people with her SUV: "Privilege caused this. But privilege is an albatross right now."
Those words are haunting him now.
Meanwhile, Waksal's personal life may find its way into court if he doesn't cop a plea or trade information on his friends in exchange for leniency — something insiders say is a strong possibility. If that happens, expect to see the name Patricia Duff back in the news. Duff, the former wife of Revlon chairman Ronald Perelman and a participant with Perelman in one of the nastiest child custody trials in years, has been Waksal's steady for more than a year. She recently declined to tell The New York Observer if she still owned ImClone stock, but conceded she had owned it at different times.
The interesting questions — for Barish, Black, Duff, Grubman, Icahn and other Waksal cronies — will be "What did they know, and when did they know it?"
Lauryn Hill's new album, Unplugged 2.0, has sold a little less than 300,000 copies since its release, according to Nielsen/SoundScan. Considering that this was Hill's first release since her Grammy-winning, platinum-selling Miseducation of Lauryn Hill album, we can pencil her in as a big, serious flop. Lauryn's numbers would be worse if she were alone in her misery. But she isn't. Moby's new album, 18, has also just under 300,000. Yikes! Meanwhile, Puff Daddy, a.k.a. P. Diddy has moved a meager 615,000 copies of his We Invented the Remix compilation, and that hurts — the fees on that album to outside artists are high enough. Diddy won't be raking it in at this rate. Finally, Canadian warbler Celine Dion is in a free fall with her New Day Has Come collection. After a strong start, sales are down to a trickle; New Day has sold 2 million copies, compared to sales of 9 million for Celine's previous album.
Every year on this day, I like to remind our readers of my late great friend, the wonderful writer Laurie Colwin. Laurie died suddenly in October 1992 — she would have been 57 years old today. Laurie's novels and essays are all in print via Harper Collins, including the moving and funny novels Shine On Bright and Dangerous Object, Happy All the Time, Goodbye Without Leaving, Family Happiness and A Big Storm Knocked it Over. Recently, I've frequently found myself on New York's West 30th St. in a building next to the Olivieri Center for Homeless Women, where Laurie cooked lunch for years as a volunteer. I've taken it as an omen. A brilliant writer and a wonderful mother to her daughter Rosa, Laurie was also a regular contributor to The New Yorker. As an editor at the old Dutton books under the legendary and beloved Henry Robbins, she discovered and published Fran Lebowitz. On this gray, foreboding weekend, check out Laurie's writing. It will make you feel so much better.