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One of the great tragedies of Martha Stewart is that she forgot the lesson learned so painfully by Richard Nixon and repeated many times over the past three decades.
It’s not the crime; it’s the cover up.
For $55,000, she has sabotaged her remarkable career; endangered her company, Martha Stewart Living Omnimedia, Inc.; and created a story that, like the Exxon Valdez before it, will live on for years in the annals of public relations as an example of what not to do when faced with a corporate legal and media challenge.
From the start, the confluence of her legal and media strategies looked more like a congressional budget bill compromise than the kind of well thoughtout military triage one would expect from the kind of legal and media expertise she had at her side. It was a halfpregnant approach that mixed the wrong kind of stonewalling with tentative attempts to send less than credible, and much less than persuasive, messages.
And, not surprisingly, it bore no fruit.
Lawyers who think that saying nothing or saying very little preserves all of a client’s options need look no further than the Martha Stewart case for the fatal flaws in this approach. The media can do as much harm—or more—than a judge or jury.
In fact, the log of her serious blunders numbers at least twelve. Call them “the dirty dozen.”
1. Claiming innocence, she refused to cooperate with the U.S. government, breaking the cardinal rule of SEC investigations —cooperate, cooperate, cooperate. Did she really think that by dismissing them with a regal flip of the hand, the investigators would slink off, never to return? Was that the least bit possible so soon after the SEC smarted from intense public criticism of Harvey Pitt’s unfortunate adventure with Arthur Andersen and friends?
2. In a style more reminiscent of Freddy Kruger than America’s Homemaker, she angrily chopped cabbage on Good Morning America, apparently taken by surprise by questions about the charges. If Scarlet O’Hara didn’t get away with “I’ll think about that tomorrow;” Martha’s “Can’t we just talk about the salad?” was even more laughable. Suddenly, she publicly confirmed she was a mean person.
3. Her family portrait claims a close relationship with Sam Waksal of ImClone, but she later referred to her relationship with him as “no closer than the family pet.”
4. Martha headed a publicly traded company and held a seat on the NYSE for several months, but wanted America to believe that she had no inside relationships.
5. She built a hugely successful magazine empire, but was slow to develop her own communications strategy, falling so far behind the news curve as to never catch up.
6. When she finally got the right PR firms on her side, she had so many of them (four by one count) that it must have been difficult to keep them straight. It took so long each day for reporters to gain clearance from this PR machine, the very reporters it was trying to influence were offended.
7. She wanted to be one of “us” but carried a $6,000 Hermes purse to court. That screamed “I don’t care, I play by different rules.”
8. She developed her marthatalks.com web site to some acclaim, but then failed to use it for much more than groveling testimonials from shocked fans.
9. She claimed to be the victim of an overreaching SEC, yet never organized others in a grassroots effort to communicate the danger posed to everyone by Big Government.
10. She claimed to be a target (she was) but refused to take the SEC seriously when they first came to her, failing to reach any agreement over $55,000 in trading.
11. She claimed to be innocent, but failed to testify at trial, leaving only two possible conclusions for the jury—either she couldn’t imagine that the jury would dare to cross her (the cost to her image of that purse again) or she could not honestly testify. Federal rules do make testifying an increased challenge, but the PR rule of celebrity defendants is that juries expect them to testify.
12. Even upon conviction, she stuck to her half-pregnant media strategy, so determined to preserve her right of appeal that she refused to say a convincing “I’m sorry” in any form.
On June 5, 2003, The New York Times wrote, “In maintaining her innocence and standing for trial, Stewart is subjecting herself and her company… to even more relentlessly negative news media than it has had in the last year and a half.”
The chart on page 54 (supplied by CARMA International) clearly illustrates that Martha Stewart’s negative media savaged her stock prices. When a client comes to a lawyer, he or she is coming with a business problem, not just a legal one. Great lawyers may win cases, even on appeal, but hopefully not at the cost of their clients and their companies.
Maybe, absent all best media practices, Martha Stewart should have taken another media cue from the redoubtable Richard Nixon. Just stand up in front of the world and say, “I am not a cook!”
Well, maybe not.
Richard S. Levick is president of Levick Strategic Communications and can be reached at rlevick@levick.com. Levick has handled the media for more than 150 law firms and the highest profile crisis matters from the Catholic Church to the Rosie O’Donnell Rosie magazine litigation. Their newest book, Stop the Presses: The Litigation PR Desk Reference, is available for free at stopthepresses.com.
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