by TChris

On Wednesday, TalkLeft reported the arguments of Rush Limbaugh's lawyer, Roy Black, in opposition to Florida's use of a search warrant to obtain Limbaugh's medical records without Limbaugh's consent. Black argued that prosecutors should have applied for a subpoena and given Limbaugh notice so that he could object. The Association of American Physicians and Surgeons filed an amicus brief with the court yesterday in support of Limbaugh's position, arguing that upholding the warrant would have an intimidating effect on Florida doctors. Also supporting Limbaugh in the court of appeals are the American Civil Liberties Union, the Florida Pain Initiative, and the National Foundation for the Treatment of Pain. The court of appeals in West Palm Beach yesterday gave prosecutors 15 days to respond to Limbaugh's argument.

In the meantime, Limbaugh disclosed yesterday that prosecutors have, in fact, subpoenaed records from his doctors.

On his radio show Friday, Limbaugh said Palm Beach County prosecutors sent subpoenas to the offices of four of his doctors, "demanding a list of every employee at every doctor's office I visited, from March to September of 2003," according to a transcript of the program on his Web site.

"They're already figuring they're going to win the opportunity to see my medical records, and once they see them, they want a list of names at these doctors' offices that they can re-subpoena and bring in for interviews," Limbaugh said.

Adding another layer of controversy to the case, the former maid who blew the whistle on Limbaugh's alleged drug use is angry at his on-air assertion that a "lawyer, with Democrat connections ... went to the state attorney and got [her] immunity."

by TChris

A key witness against Martha Stewart admitted under cross-examination that she may have imagined some of the statements that she attributed to Stewart in yesterday's testimony. As TalkLeft reported yesterday, Stewart's friend, Mariana Pasternak, testified that she recalled Stewart saying "Isn't it nice to have brokers who tell you those things," an apparent reference to Stewart's alleged receipt of information that ImClone CEO Sam Waksal had been trying to dump his shares in the company. Today she isn't so sure.

"I do not know if the statement was made by Martha or if it was thought in my mind," Pasternak said. She also said she previously told prosecutors that she was not sure about that recollection.

The prosecution is expected to rest its case (or what's left of it) later today.

Update: The prosecution did indeed rest this afternoon. As expected, Stewart's attorney, Robert Morvillo, moved to dismiss the charges against her. The judge, Miriam Cedarbaum, will not decide that motion until Monday, but indicated that she viewed the securities fraud count as "the most problematic" (read: shakiest) of the charges against Stewart.

by TChris

Jeff Skilling, former CEO of Enron, shook his head "no" and then entered "not guilty" pleas to 35 counts charging him with fraud, insider trading, cooking the books, and other crimes related to his alleged deception of Enron investors. Charges were also brought against former Enron chief accountant Rick Causey.

Former Chairman Ken Lay, for years the public face of the company and a close political ally of President Bush, has not been charged and was not mentioned in the Skilling indictment.

Skilling's attorney, Daniel Petrocelli, called Skilling a "scapegoat" and said that he had passed a lie detector test. Given the complexity of the charges and the massive amount of discovery that defense lawyers will need to review, this case is unlikely to proceed to trial any time soon.

With friends like these, who needs enemies?

Just days after selling her ImClone Systems stock, Martha Stewart said she knew that ImClone CEO Sam Waksal had been trying to dump his shares in the company, a close friend of the domestic style maven testified Thursday. The revelation by Mariana Pasternak, a friend of Stewart for more than 20 years, was perhaps the most damaging testimony yet against Stewart, who claims she sold the stock for an entirely different reason.

Pasternak said Stewart told her about the Waksal sale on Dec. 30, 2001, just three days after Stewart sold her 3,928 shares of ImClone. They were on a terrace at a Mexican resort where they were vacationing. Pasternak said Stewart recalled Waksal "was selling or trying to sell his stock, that his daughter was selling or trying to sell his stock."

Former Lousiana Governor Edwin Edwards is appealing his conviction and ten year sentence. Among the grounds: the Judge may have been impaired by oxycontin.

From the Law.com newswire:

A judge's prescription for painkillers has provided fuel for an appeal by counsel for former Louisiana Gov. Edwin Edwards. U.S. District Judge Frank Polozola's use of OxyContin for back pain may have hampered his decision-making during pretrial motions, argues defense attorney Mike Small. The defense is also alleging juror bias as well as undisclosed financial incentives for a chief witness for the prosecution. Edwards is serving a 10-year sentence for extorting payments for riverboat casino licenses ...

The former CEO of Enron, Jeffrey Skilling, was indicted today by a Texas federal grand jury. Skilling is expected to surrender tomorrow. He is the highest-ranked Enron executive to date to be indicted.

Skilling did not invoke his 5th Amendment privilege when subpoenaed to testify before Congress. He testified before the U.S. House Energy and Commerce Committee on Feb. 7, 2002. Here's a snippet:

When I left on Aug. 14, I believed the financial reports accurately reflected the condition of the company . . . I absolutely, unequivocally thought the company was in good shape." "I cannot for the life of me see how we could go from where the company was then to bankruptcy in such a short time."

"It is my belief that Enron's failure was due to a classic 'run on the bank,' a liquidity crisis spurred by a lack of confidence in the company. At the time of Enron's collapse, the company was solvent and highly profitable -- but apparently not liquid enough. "

Will Ken Lay be next?

Rush Limbaugh, aided by a friend of court brief filed by the ACLU, is asking an appeals court to order his medical records returned to him and declare that they were improperly seized:

Miami attorney Roy Black filed the brief with the 4th District Court of Appeal, asking that Limbaugh’s medical records be returned to his doctors and prohibit the state from seeking them or using any information contained in them. The American Civil Liberties Union filed a brief Tuesday in support of Limbaugh.

The Palm Beach County State Attorney’s Office seized Limbaugh’s medical records by search warrant on Nov. 25 from four doctors in Palm Beach County and Los Angeles. The 53-year-old Limbaugh, who publicly admitted his addiction to prescription painkillers and spent five weeks in a drug rehab, is being investigated for allegedly stocking up on pain medications from multiple doctors, a third-degree felony called "doctor shopping." No charges have been filed against him.

Black says the Florida Constitution requires three steps for obtaining medical records: applying for a subpoena and notifying the patient, giving the patient an opportunity to oppose the action in a court hearing and, if the seizure is opposed, providing evidence at the hearing as to why the subpoena should be granted.

In its brief, the ACLU supports Black's arguments. "A search warrant provides no mechanism for a court to determine what portions of a patient's medical records are relevant," the brief said. "Consequently such a procedure may result in disclosure of treatments or conditions not relevant to any legitimate law enforcement investigation and which could materially harm a patient's professional, social, or personal life."

We've been on the run today and will continue to be until later this evening. There's a lot of news today though. Here's some:

The Tenth Circuit Court of Appeals has reversed a trial judge and upheld a "do not call list" against telemarketers.

Martha Stewart got another favorable ruling today from the Judge who refused to allow the Government to introduce evidence that Bacnovic left a phone message for Martha.

No ruling yet in the San Francisco gay marriage lawsuit.

A jury has convicted Bishop Thomas O'Brien of hit and run .

Martha Stewart's trial resumes today and prosecutors are days away from resitng. Should Martha testify in her own defense?

Our view: Too risky, don't do it. Argue reasonable doubt and harp in closing on testimony elicited by others that's favorable to Martha.

First, star witness Douglas Faneuil, the Merrill Lynch & Co. assistant who handled Stewart's sale, did not waver in his assertion that Bacanovic ordered him to tip Stewart that ImClone founder Sam Waksal was dumping his shares.

And second, Stewart's personal assistant, Ann Armstrong, testified that Stewart, just before meeting with federal investigators, altered a computer log of a message left by Bacanovic on Dec. 27, 2001, the day she sold. Stewart then immediately told her to change it back, Armstrong testified.

The Judge dealt a serious blow to the prosecution last week by precluding them from calling an expert to prove that she committed securities fraud.

Gerald Shargel, noted New York criminal defense lawyer and white-collar crime expert whom we respect enormously, also says Martha doesn't need to take the stand.

While the ultimate decision as to whether to testify is up to the client, Martha has made it clear she will follow her lawyers' advice. Barring unforseen developments this week, we suspect they will advise her not to take the stand.

The Prosecution case ran into some potholes --as Shargel points out:

But the primary charge here is obstructing justice. To that end, the chief prosecutor claimed in her opening statement that the case is about deceit, that when interviewed by government officials in a voluntary but ill-advised office visit, Stewart lied repeatedly.

In the Friday court session, however, the jury learned that the sole records of that meeting are notes and reports by FBI agent Catherine Farmer. Yet, by her own admission, Farmer was fresh to the case and knew very little about it while taking the notes.

Under effective cross-examination by Stewart lawyer John Tigue, Farmer also admitted her notes were incomplete and contained fragmentary answers.
Worse, her later typed reports included answers omitted from the notes and reconstructed from memory. That Special Agent Farmer was the only federal agent taking notes that day is not surprising. This is a routine ploy to avoid inconsistencies among note-takers.

But now the government is stuck with inconsistencies of a different kind, inconsistencies between Farmer's own notes and her later typewritten reports.
Without a sworn statement, stenographic minutes or taped accounts of what Stewart actually told the prosecutors, the government's case suddenly seems vulnerable.

Our advice to Martha: You've got a great lawyer. The Judge dealt the prosecution a setbackThe Judge said no to allowing the government's expert to testify. That's a big boon for you. Don't risk it. Follow your lawyer's advice and let him bring the case home.

We heard a lot this morning about many of the cases we've been writing about on TalkLeft--one item that really stood out was how much the Government spent to prosecute Tommy Chong: $12 million. What an outrage.

Update: Drug War Rant tells us what $12 million could provide:

• $12 million would pay for treatment for 3,500 drug addicts for an entire year.
• $12 million would pay for enough needle exchange programs to prevent 1,258 HIV infections.
• $12 million as a direct grant to me would stimulate spending in my household and help the economy.

The Enron investigation is about to claim another top gun--former CEO Jeff Skilling is reported to be close to Indictment.

The charges against Skilling being finalized by Enron Task Force prosecutors come on the heels of the Jan. 21 indictment of ex-Enron Chief Accounting Officer Rick Causey and the Jan. 15 guilty pleas of former company Chief Financial Officer Andrew Fastow and his wife.

Skilling testifed before Congress and did not invoke his Fifth Amendment privilege. He is expected to fight the charges all the way.

Bruce Hiler, Skilling's Washington, D.C.-based lawyer, said his client did nothing wrong and fairly relied on his subordinates and the accountants and lawyers they hired. Hiler said if Skilling is indicted, many corporate executives need to be afraid of the government.

"If a COO can't rely on the dozens of experts who review and recommend transactions, then no COO should go to work tomorrow, because they may find themselves indicted," Hiler said.

Attorneys involved in the Enron criminal cases expect that Fastow, who agreed to serve 10 years in prison for two counts of conspiracy, gave prosecutors information that will add to the case against Skilling.

Martha Stewart's assistant today testified Martha altered her phone log.

Martha Stewart altered a log of a phone message left by her stockbroker about ImClone Systems stock, then ordered her assistant to change it back, the assistant testified Tuesday.Stewart sat down at the assistant's desk and changed the message from ''Peter Bacanovic thinks ImClone is going to start trading downward'' to ''Peter Bacanovic re ImClone,'' assistant Ann Armstrong testified.

The message referred to a call placed by Bacanovic, Stewart's broker, just before Stewart sold 3,928 shares of ImClone on Dec. 27, 2001. Armstrong said Stewart altered the message on Jan. 31, 2002, just days before she was first interviewed by investigators about the ImClone trade.

But Armstrong said Stewart quickly ordered her to restore the original message. ''She instantly stood up, still standing at my desk, and told me to put it back to the way it was,'' Armstrong said.

This is old news and we think Morvillo will be able to spin this in her favor. Will he say it was a fleeting thought, corrected before she ever met with investigators? We don't know, but by focusing on the correction, rather than the alteration, he may score some points with the jury about Martha's ultimate honesty.