Martha Trial Halftime Score - Faneuil 1: Defense 0

09 February 2004

Thursday saw a likely pivotal moment in the all-star New York State versus Martha Stewart trial.

The state's case stands or falls by the testimony of its star witness, Merrill Lynch stockbroker's assistant Douglas Faneuil (28). He alone can provide first-hand evidence of the alleged conspiracy to obstruct justice by his former boss Peter Bacanovic, a co-defendant in the trial, and America's goddess of domiciliary chic.

Not an empty seat in the house, then, when Bacanovic's attorney David Apfel commenced Faneuil's cross-examination, intent on proving him an unreliable witness. The press consensus, however, was that Apfel failed -- and that Stewart's crafted persona of graceful decorum came out of it none too well either.

Among the interesting insights revealed by the cross-examination, was the media maven's brusque telephone manner. On one occasion, Faneuil said, she told his boss she would fire him [Bacanovic] if Merrill Lynch did not change its telephone hold music.

In another, Faneuil reported she had hung up on him after calling him an "idiot" and emitting a noise "like a lion roaring underwater". Faneuil later emailed a personal friend: ""I have never ever been treated so rudely by a stranger on a telephone. She actually hung up on me."

In another, somewhat coy, email, Faneuil confided to a friend: "Martha yelled at me again today, but I snapped in her face and she actually backed down. Baby put Ms Martha in her place!!!" This and other emails were projected on a large screen before the jury.

Faneuil also recounted a call he had taken from Stewart when she seemed to mistake him for Bacanovic: "She said: 'Do you know who the hell is answering your phones' [apparently referring to Faneuil].

"And then she made the most ridiculous sound I've heard coming from an adult in quite some time, kind of like a lion roaring under water. I laughed. I thought she was joking." But it was no joke. "Merrill Lynch is laying off 10,000 people because of people like that idiot," she told him.

Onlookers think it curious, however, that given the pre-trial attempts by Stewart to convey to the world an aura of sweet reasonableness, attorney Apfel did nothing to refute these allegations of un-Martha-like behaviour. Instead he suggested that Faneuil was biased against Stewart because of her abrasive treatment.

However, the day's melodrama reached its acme when Apfel tried to torpedo 'Baby's' claim that he was financially induced to support the Bacanovic-Stewart contention that Stewart's controversial sale of ImClone shares was triggered by a prior agreement to sell if the stock price fell below $60.

The trial's eventual outcome probably hinges on whether the jury believes Faneuil, who initially backed the explanation given by Stewart and Bacanovic only to repudiate it later, stating he had lied in return for financial inducements from Bacanovic. Faneuil admitted to investigators he had lied, struck a plea bargain, and became a government witness.

Apfel probed why Faneuil had initially lied to the FBI. Was this in exchange for an airline ticket? An extra week of vacation? Or extra compensation from Bacanovic? 'No', replied the witness to each of the questions, insisting he regarded those extra payments as "rewards" for backing his boss. "I felt I would be fired if I didn't lie."

The court went into recess Friday and Faneuil's cross-examination will continue for a third day Monday when he faces Stewart's lawyer Robert Morvillo, a student of the Clarence Darrow deadly homespun school of interrogation.

Data sourced from: Financial Times and The Wall Street Journal Online; additional content by WARC staff