Published January 13, 2015
Home fashion executive Martha Stewart should be subpoenaed to answer questions about her sale of ImClone shares a day before they plummeted, a member of a congressional panel said Thursday.
"Bring her in and if she wants to take the Fifth (Amendment), that's her right. That's her legal right," said Rep. Bart Stupak, D-Mich.
Appearing on NBC's Today show, the Michigan Democrat, a member of a House investigative panel looking into the transaction, said that if Stewart hasn't responded to a request for information by Aug. 20, she should be forced to appear.
The House Energy and Commerce Committee requested some of Stewart's e-mails, records from her business manager and additional information on her phone numbers.
In a letter to Stewart's lawyer earlier this week, Rep. Billy Tauzin, R-La., and Rep. James D. Greenwood, R-Pa., leaders of the House Energy and Commerce oversight and investigations subcommittee, renewed a congressional request for an interview with Stewart.
The hope was to get answers in connection with discrepancies between her account of the sale and that of her broker and his assistant.
Stewart, chief executive of Martha Stewart Living Omnimedia Inc., has declined to meet with congressional investigators, saying that would be premature. But her lawyer has said that they would do everything they could to comply with the committee's request for additional documents.
Stewart maintains she had an order to sell her stock when it went below $60 and disposed of nearly 4,000 shares on Dec. 27. That was a day before ImClone stock plunged when it became known that the Food and Drug Administration would not accept the biotech company's application to review its highly touted cancer drug.
Ken Johnson, a spokesman for the committee, has said that a June 12 letter from Stewart's lawyer to the committee said she had no inside knowledge about any actions the FDA was taking about ImClone.
But it did not address whether she knew that her friend, former ImClone CEO Samuel Waksal, was trying to sell shares and that his daughter had dumped a large block of stock.
"We've asked Martha Stewart and her broker to put forth the stop-loss order to verify her version of what happened," Stupak said. "There's a critical time period here, first week in December, first week in January."
"We've requested Martha Stewart or her lawyers to come forward," he said. "I would not want the committee to not finish its work. We always had promises and representations that she would come forward and put forward certain documents. As this thing has unraveled, they have drawn further away from the table."
"It's really in Martha Stewart's court right now," Stupak said. "If it will exonerate her, put forward the evidence."
An indictment in Manhattan Wednesday brought new charges against Waksal, 54, who was accused of obstruction of justice and bank fraud in addition to previous securities fraud and perjury charges.
Waksal was arrested in June on charges he secretly advised family members to sell their ImClone stock on Dec. 27 after learning that his biotech company's highly touted drug Erbitux had been rejected by the FDA.
Stupak said Thursday that if Stewart has not responded to the committee's demand for information by the time Congress returns Sept. 3, he'll ask Tauzin to have her subpoenaed.