The House Energy & Commerce Committee has, with reluctance, referred the
Martha Stewart-ImClone Systems Inc. investigation to the Department of Justice, "strongly"
suggesting that it investigate whether Stewart lied to the committee, but coming
to "no conclusion on whether her conduct constitutes a federal crime."
Committee chairman Billy Tauzin (R-La.) said Stewart's refusal to appear before
the committee and her pledge to take the Fifth Amendment if subpoenaed
necessitated passing the investigation along to the DOJ.
Oversight and Investigations Subcommittee chairman James Greenwood (R-Pa.)
said they negotiated with Stewart's attorneys up until 2 p.m. Tuesday to try to
get her to testify, but they were rebuffed. If the DOJ finds that Stewart lied, she
could be imprisoned for five years and/or fined, Tauzin said.
Stewart sold 4,000 shares of ImClone the day before it became public
that the Food and Drug Administration had denied the company's application to market
a new cancer drug. Stewart said she had a pre-existing agreement with her broker
to sell ImClone if it fell below $60 per share, and it was the fall
of the price that triggered the sale.
Tauzin said the committee had "other evidence that casts substantial doubt on
the truth," of Stewart's version of events.