The Heat Is On

This is a partial transcript from "Your World with Neil Cavuto", February 9, 2004, that was edited for clarity.

Watch "Your World w/Cavuto" weekdays at 4 p.m. and 1 a.m. ET.

TERRY KEENAN, GUEST HOST: Returning to the Martha Stewart story, a big day not just for the Martha Stewart trial, but also down the block, where Dennis Kozlowski’s attorneys rested their case without putting a single witness on the stand. White-collar crime cases are nothing new to my next guest. As chairman of the House Oversight and Investigations Committee, he was the first to blow the Martha Stewart case wide open.

Joining me now, Republican Congressman Jim Greenwood of Pennsylvania.

Congressman, welcome. Nice to have you with us.

REP. JIM GREENWOOD, R-PA.: Thank you, Terry. How are you?

KEENAN: Good. You know, it has been two years since your committee started to investigate what happened to ImClone stock back in late 2001. Are you happy with how this investigation has gone so far?

GREENWOOD: Well, you know, curiously enough, we were never out to get Martha Stewart. We weren’t even aware Martha Stewart’s involvement of this initially. We were looking at the ImClone company, and particularly the way it was hyping its drug Erbitux, which was touted to be this great cure for colon cancer. And then when they brought their clinical trials to the FDA, the FDA thought they were so bad they wouldn’t even review them.

And so our initial inquiry was really about how that could happen and how so many colon cancer patients could be disappointed like that. It was only as we went into the investigation that we found out about the Waksals’ insider trading business and all of that. And then, ultimately, Martha Stewart’s involvement.

KEENAN: And -- go ahead.

GREENWOOD: Well, the odd thing was that we called Martha Stewart’s attorney to give him a head’s up and just say, look, Martha Stewart’s name is on this phone register, and we have heard about -- that she might be involved in insider trading, just a head’s up. And the mistake that I think that she and her lawyers made right off the bat and then they unfortunately continued with was never to just sort of fess up to this relatively minor infraction, take some lumps for it.

But instead, to deny it and to create this story that there was a preexisting agreement to sell if the stock went below $60, which I don’ t believe and the Justice Department doesn’t believe, and I don’t think the jury will believe ultimately.

KEENAN: And do you think the Justice Department is correct in going after Stewart with these five felony counts?

GREENWOOD: Yes. The irony is, what I had advised Martha Stewart’s attorney to do -- and I’m not an attorney myself -- but I said, you know, if you would just have her say, look, I was on my way to a vacation, I stopped to refuel in El Paso, Texas. I got a call from my broker.

My broker said the stock was going down and I told him to sell, and that was a mistake. I should’ t have done it; I should have known better. And then just volunteered to pay a fine of, let’s say, $50,000, which is about what she saved, and then donate some multiple of that, three or four times that to the Enron employees fund, she would have been a heroine. She would have been -- in a time of corporate scandals, people would have cheered her in streets. Unfortunately, it’s always the cover-up that gets you.

KEENAN: All right. We’re going to have to leave it there. Thanks for your insights. We appreciate it.

GREENWOOD: OK. Thank you.

KEENAN: Representative Jim Greenwood.

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