White-Collar Criminals Weave New 'Tangled Webs' Journalist James B. Stewart admits in his new book that lying isn't by any means new, but argues that "concerted, deliberate lying by a different class of criminal — sophisticated, educated, affluent ... threatens to swamp the legal system and undermine the prosecution of white-collar crime."

White-Collar Criminals Weave New 'Tangled Webs'

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The act of lying seems to be part of human nature. We've been doing it since the Garden of Eden, after all. But are people these days lying more? That's the question at the heart of financial writer James Stewart's new book. It's called "Tangled Webs," and it describes, as Stewart puts it, a surge of concerted deliberate lying by people at the top of their fields. Think Martha Stewart, Bernie Madoff, Scooter Libby.

Well, James Stewart is in our New York studios this morning. Good morning.

Mr. JAMES STEWART (Author, "Tangled Webs"): Good morning, Mary Louise.

KELLY: So, I have to tell you, I'm not sure I buy this theory that there is a national surge in lying. But let me get to that in a minute. I would love to know, first off, as you were researching this book, what was the most damaging lie that you came across?

Mr. STEWART: I chose each of these stories to illustrate a different element of damage. These are people very prominent and they're each from a different important walk of life - Martha Stewart's in the media and business; Scooter Libby in politics; Bernie Madoff on Wall Street; Barry Bonds in sports.

If you want to just quantify the dollar damage, it's hard to top Bernie Madoff, with a $65 billion Ponzi scheme and devastating losses to individual people. You know, Barry Bonds, just convicted of obstruction of justice, a hung jury on some perjury charges, charged with perjury. Sports figures are immense role models, especially for young people. And we'll never know how much damage is done, but I think it's tremendous.

KELLY: Let me ask you about lying in politics. Hardly a new game. I mean...


KELLY: ...in your very first chapter you mentioned Bill Clinton, John Edwards. What interested you in particular about the case of Scooter Libby, the former White House political adviser? Why did he make the cut for you?

Mr. STEWART: Well, one thing that attracted me to the Libby case was that he was convicted of lying under oath. That's very unusual in politics. And by the way, the White House, the president, our top elected officials, they're the chief law enforcement officers. And back to back, we've had a Democrat, Bill Clinton, who committed perjury, and then we have another president, George Bush, who in communing Libby's sentence after the overwhelming evidence that he lied under oath not just a few times but many, many times, he commuted it, essentially condoned it. Well, what kind of message does that send not only to Americans but to people throughout the world?

KELLY: And just to remind people: The whole scandal that Scooter Libby was caught up in was the outing of CIA operative Valerie Plame.

Mr. STEWART: Right.

KELLY: To be clear, you didn't find any evidence that the lying extended up to the president. But you did find that this scandal extended well into the Bush White House and in particular the vice presidency.

Mr. STEWART: Oh, absolutely. I mean, President Bush was briefed on this and shown the evidence. He did absolutely nothing.

KELLY: Let me ask you about another very different case, different arena: Martha Stewart. She was, at the time that charges were brought against her, she was a billionaire entrepreneur. What did you learn about why she lied about a relatively small stock trade?

Mr. STEWART: She may have been a billionaire, but like many very, very wealthy people she was obsessed with money, as indeed - that's not a crime, and many very wealthy people are. But that was one of the main reasons. Secondly, you know, like many of these people, to admit that they do something wrong is just something they constitutionally cannot do. I mean, Martha Stewart was ready to plead guilty. Her lawyers - she had a fabulous deal. She would have never had gone to jail. They told the prosecutor that she was going to plead guilty, and then 45 minutes later they called back and said, no, she just can't do it.

I mean I - obviously I'm not, because of attorney/client privilege the conversation between Martha Stewart and her lawyers, I'd love to have heard it. I'm sure they were begging her to take this deal.

KELLY: And the thinking there was that because of the nature of her business, this wholesome, homemaker image, they didn't want any...

Mr. STEWART: Yeah.

KELLY: ...(unintelligible) guilt.

Mr. STEWART: She said, well, my business can't take a guilty plea, but none of the prosecutors believed that. They thought she can't take the guilty plea. It didn't have anything to do with her business. I mean, look, her business is faltering, but it survived.

KELLY: I wanted to ask about that. I mean, she is not back at where she was 10 years ago, but Martha Stewart is - you can see her on TV now, her magazines, her products continue to sell. I mean, what's the lesson here? For her, lying to protect her reputation, did that end up ultimately being a good move?

Mr. STEWART: Well, you know, maybe Martha Stewart to this day, even though she was tried, convicted, found guilty, maybe she feels that she did get away with it, given that she's still a celebrity. But if you look at the stock price of Martha Stewart Living, it's a small fraction of what it was before she went to jail. There's been tremendous damage to shareholders, tremendous damage to the franchise. That's putting aside the damage to the lives around her.

And again, I think one of the most compelling characters in the whole book is the young 26-year-old stockbroker's assistant who through no fault of his own got swept up into the machinations of Stewart and her stockbroker, who they just treated as kind of collateral damage here but whose life was shattered by all of this.

KELLY: James Stewart, we're here talking about your new book, "Tangled Webs." One common thread that struck me and all the people that you write about is that they ended up making things so much worse for themselves by lying, to the point in several of the cases where it was lying, perjury, that became the only thing they were charged with.

Mr. STEWART: It's astounding, really, that three of the four cases are like that. Because Martha Stewart was never charged with insider trading; Libby was never charged with leaking Plame's identity; and Barry Bonds had immunity for everything, ironically...

KELLY: Yeah, a jury just found him guilty on a count of obstructing justice, not...

Mr. STEWART: Exactly.

KELLY: ...anything to do with taking banned drugs.

Mr. STEWART: Right. Obviously they all thought they had done something wrong. They couldn't admit it, they were going to hide it, and it was easier to lie, to cover it up. But it makes it so much worse. That's why I call the book "Tangled Webs," because, I mean, that's an old adage. But boy, is that ever true.

And I don't know if other people have had this experience. I remember as a child telling a big whopper in second grade and the teacher kind of started asking more questions and I kept spinning out the story and it just got bigger and bigger and wilder and wilder and finally, you know, the whole just collapsed and I sobbed and fell to the floor, begging forgiveness. But it's a mess. I mean, the lies just get bigger and bigger.

KELLY: Let me press you, though, on this notion that there is an epidemic of lying, a surge of lying at the highest level of American politics, sports and business. I mean, haven't powerful people always lied? And because they think they can get away with it.

Mr. STEWART: Well, I say right away, I can't prove - there aren't any statistics on how much lying is going on. All I can provide is anecdotal evidence from people that I was talking to. And I can tell you that every single prosecutor told me that they felt it was an epidemic and that it was out of control. One of them said every day I come into work expecting to be lied to under oath or in circumstances where it's a false statement punishable by prison.

Whether it's an epidemic or not, in a way I don't care. It is way too much. From the highest level in the White House to the lowest level of every single one of us in our daily lives have just got to stop and say, wait a minute, this is not acceptable.

KELLY: So what is the solution do you think, or is there one? Would more prosecutions for perjury help?

Mr. STEWART: I think it's like any other law enforcement thing. You have to have people being held accountable for breaking the law and then you have to have encouragement for people to do the right thing. I mean, a lot of prosecutors told me that they, you know, were so happy about Martha Stewart getting convicted, not 'cause they had any personal animus against her but she's so visible that it served as a deterrent.

KELLY: Well, James Stewart, thanks very much.

Mr. STEWART: Thank you.

KELLY: James Stewart, talking about his new book "Tangled Webs: How False Statements are Undermining America: From Martha Stewart to Bernie Madoff." And you can read an excerpt from his book at NPR.org.

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