Subpoena likely for Martha Stewart

Lawmaker says mogul's story 'continues to change'

Stewart

PHILADELPHIA, Pennsylvania (CNN) -- A Republican congressman investigating Martha Stewart's ImClone stock sale said the media mogul will "probably" be subpoenaed by the House Energy and Commerce Committee.

"I think Martha Stewart has been less than candid with us," Rep. Jim Greenwood, R-Pennsylvania, told CNN Sunday.

"We've told her that we want information about her phone call records, her e-mail records, and that we want that by the 20th of August," Greenwood said. "If she does not provide the information to us voluntarily, then we will subpoena that information."

Stewart faces scrutiny over her decision to sell nearly 4,000 shares of ImClone stock December 27, 2001. A day later, the Food and Drug Administration announced it would not approve a cancer drug developed by the biotech firm, and ImClone stock plummeted.

ImClone chief executive Sam Waksal was indicted Wednesday on fraud, perjury, obstruction of justice and conspiracy charges. Prosecutors say he tried to sell his own ImClone stock the day before the FDA announcement. He entered a plea of not guilty to the charges Monday in federal court in New York.

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Waksal faces 125 years in prison and an $8.5 million dollar fine if he is convicted on all 13 counts. His attorney says Waksal is "presumed innocent."

"The evidence points in the direction that her brokers informed [Stewart], at a minimum, that the Waksal family was trading its stock because of impending news, and we think that's why she should come forward and talk to us," Greenwood said.

The committee wanted to talk to Stewart in June when it began digging into ImClone but allowed her attorneys to respond to questions in writing, a source told Time magazine. Hours before the hearing was to begin, Stewart's lawyers requested that committee chairman Billy Tauzin, R-Louisiana, enter their letter into the committee record and issue a statement exonerating Stewart, sources tell Time.

"We were stunned," Tauzin spokesman Ken Johnson told Time. "We couldn't believe what they were asking us to do."

Since then, Stewart has twice spoken to the FBI, which is investigating ImClone, the sources told Time.

Stewart has denied all accusations of insider trading. According to her attorney, "At no time did Ms. Stewart ever receive from anyone any information concerning any action of the FDA with regard to ImClone or any planned or imminent announcement by ImClone of any action by the FDA."

Greenwood said he is dubious of the denials. "I think that Martha Stewart's story continues to change, and I think that's unfortunate."

He added, "We have a responsibility to make sure that there's integrity in the marketplace, and we can't sweep something like this under the rug just because Martha Stewart is a celebrity."

Just hours before the hearing began, sources tell Time, Stewart's lawyers requested that committee chairman Representative Billy Tauzin, a Louisiana Republican, enter the letter into the committee record and issue a statement exonerating Stewart. "We were stunned," says Tauzin spokesman Ken Johnson. "We couldn't believe what they were asking us to do." Tauzin refused.

And that was when relations were good. Two months later, as new facts about her case have surfaced, Tauzin's patience with Stewart has worn thin. Congressional investigators increasingly see her as uncooperative, and that's usually enough to create bipartisan resolve. Sources told Time last week that Stewart has twice spoken to the FBI, which is investigating ImClone, and gave the account told in the letter.