STAR WITNESS.(The Talk of the Town)(Douglas Faneuil at the Martha Stewart trial)

From 2003, Jeffrey Toobin on Martha Stewart and her legal woes

As crime scenes go, the Merrill Lynch branch office in Rockefeller Center seems to lack a certain grit. This is where Martha Stewart's infamous sale of nearly four thousand shares of ImClone stock was processed, on December 27, 2001, and it was the focus of much testimony at her trial last week. An administrator named Julia Monaghan handled the unique managerial challenges of the branch. It was her job, she testified, to deal with everything from chronic lateness to "somebody wearing too much perfume."

Plenty of crimes take place in offices, of course, but Monaghan--a crisply tailored woman with a bit of an outerborough brogue--seems to have played den mother as much as universe master. After the Securities and Exchange Commission first questioned Douglas Faneuil, the former assistant to the stockbroker and co-defendant, Peter Bacanovic, about the ImClone trade, Monaghan said that she thought Faneuil looked "stressed." So she told him to take a friend out to dinner on Merrill Lynch. (They went to Gramercy Tavern, which is, as was pointed out in cross-examination, "one of the finest restaurants in New York City.") When Faneuil's vapors persisted, she gave him an extra week of paid vacation.

The gift of the vacation may actually have some relevance to the case. In an earlier court filing, the prosecution charged that it was Bacanovic who "offered to arrange for Faneuil to receive an additional week of vacation," as a sort of payoff for lying to the authorities. This wasn't the only way the government fell a little short in its attempt to place a sinister cast on the cheery routines at this Merrill Lynch branch. Did Bacanovic, the prosecutor Michael Schachter asked Monaghan at the end of her testimony, give any of his other assistants midyear bonuses as large as Faneuil's? Yes, Monaghan replied evenly. He'd given one to Faneuil's predecessor. The response prompted Judge Miriam Goldman Cedarbaum to needle Schachter. "Always a good idea to know the answers to the questions you ask," she said, and the courtroom filled with derisive laughter.

This is not to say that the news was all bad for the prosecution. Faneuil, who has the drowsy voice of a soft-rock disk jockey, made up for his pallid delivery with a riveting account of the day of the trade. That morning, Faneuil recalled, he took call after call from family members and associates of Sam Waksal, the former ImClone chief executive, who were desperately trying to dump their shares in advance of an unfavorable regulatory ruling. Faneuil relayed the news to Bacanovic, who was on vacation in Florida. "Oh, my God," Bacanovic said. "Get Martha on the phone." Later that day, Faneuil tracked down Stewart on the tarmac of the San Antonio airport, where her private plane was refuelling, en route to Mexico. (Stewart, like everyone else but Faneuil, ...