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The
Diva and the Double-Dipper
June 26, 2002
By Mike McArdle
The Martha Stewart Living website is gearing up for July
4 by touting a new recipe to "use seasonal berries to prepare
red, white, and blue cupcakes for the kids and American-flag
tarts for grown-ups." Stewart made a fortune (and a hefty
one) telling the middle class how to live like the very rich.
But Martha's ascension to world of the plutocrats has also
given her the financial trappings of such people, like their
huge investment portfolios and the friendship of those who
have the kind of money and power that Martha has.
But now all that money and power may be getting our Martha
in a stoneware nesting bowl full of trouble. It seems that
Martha was a stockholder in a drug company called ImClone
and may have gotten inside information from the CEO that his
company was about to tank. Phone records indicate that Martha
spoke to both the ImClone office in New York and to her stockbroker
on the day before the FDA denied approval of ImClones cancer
drug, Erbitux.
Martha cashed out and the stock plummeted the following day.
The ImClone CEO and founder, Samuel D. Waksal, has since been
arrested for insider trading. The Empress of upper middle
class homemaking claims that she had a stop loss order that
instructed Merrill-Lynch to sell off ImClone if it went below
$60 but Merrill-Lynch says it can find no such stop loss order.
Things just got even murkier for Martha when it was discovered
that a close friend of hers dumped 10,000 shares of ImClone
at the same time she did.
Now this isn't a good thing. In fact this hasn't been a good
year for poor Martha. First of all K-Mart went bankrupt and
those Martha Stewart lines of everything from bedding to towels
to patio sets are gathering dust on shelves. Not that I think
Ms. Stewart would have entered a K-Mart clad in anything less
revealing than a burka lest she be recognized and tarnish
her yuppified image, but K-Mart problems didn't help her bottom
line. And now the thought that the head of the Stewart empire
might soon be dreaming up unique and creative ways to decorate
a small cell caused the stock in her own company to tank
to the tune of $6.5 million in a couple of days, more than
25 times what she saved by dumping ImClone when she did.
Dick Cheney is a man who wastes no opportunity to equate
himself with America. When asked about meetings he held with
energy moguls or why everybody in DC seemed to know that a
terrorist attack was coming last August and nobody did anything
about it Dick gets as red, white and blue as Martha's cupcakes.
He's doing Americas business and everyone else has an inalienable
right to mind their own.
Dick was Chief of Staff in the Ford White House at the age
of 34. He then won a House seat rising to the position of
Minority Whip before becoming Defense Secretary under Bush
the Elder. Then, after the Democrats regained the White house
Cheney decided it was time to make some real money. From 1995
until his selection as Vice Presidential nominee Cheney served
as Chairman and CEO of Halliburton Oil in Dallas TX.
The phrase "double-dipper" often describes a retired military
man who upon his retirement goes to work for a defense contractor
who basically purchase his friendship with high ranking military
officials to whom they can sell their latest projects. Cheney
certainly wasn't hired by Halliburton for his knowledge of
the oil industry or his experience in running a business because
he had neither. Cheney's value to Halliburton was in who,
not what he knew.
Halliburton ran rather large construction projects, mostly
for the government so Dick's contacts proved to be quite valuable
there. He also acquired a firm that did business with his
old enemy in Iraq although he later claimed that Halliburton
had had no involvement at all with Iraqi oil. In 1998 Halliburton
apparently began crediting itself with money it had yet to
obtain but that it hoped to get by charging for cost overruns
thus inflating it's assets and driving up the price of its
stock.
This, of course, is the same kind of scam used by the Enron
people whose advice Dick was so solicitous of once he moved
back into government. Halliburton, currently facing an Enron
style bankruptcy due in part to the asbestos related liabilities
of another one of Uncle Dick's acquisitions (don't worry,
he cashed out "big time" before the stock crashed) denies
that Dick had any knowledge of the inflated assets and blames
the whole mess on the whipping boy accounting firm of Arthur
Anderson.
This is the America of the beginning of the 21st Century
a place where the wealthy take care of one another and let
the less privileged fend for themselves. If you're as prominent
as Martha Stewart you can get your friends to warn you of
a threat to your wealth, even a relatively small one. If you're
as powerful Dick Cheney you can you can use your contacts
in government to enrich yourself while you're in the business
world and you can in turn use your government prominence to
enrich your friends, like the Enron gang, while you're in
the public sector.
Congress is investigating Stewart. The investigation is headed
up by Rep. Billy Tauzin who was once a guest on Stewart's
TV show. The SEC is looking into Halliburtons numerous shenanigans
that occurred on Cheney's watch. But, no matter what the evidence,
smart money's on neither suffering too much.
In George W. Bush's America, the Stewarts and Cheneys get
immunity from both the economic trials that plague the rest
of us and the consequences of breaking the rules. Just something
to think about while enjoying your American flag tarts next
week.
Mike McArdle is the DU writer formerly known as birdman.
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