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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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