Tangled Webs

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First published in 2011 by The Penguin Press, a member of Penguin Group (USA) Inc.

Library of Congress Cataloging-in-Publication Data

Stewart, James B.
Tangled webs : how false statements are undermining America: from Martha Stewart
to Bernie Madoff / James B. Stewart.
p. cm.
Includes bibliographical references and index.

eISBN : 978-1-101-47651-2

1. Perjury–United States. 2. False testimony–United States.

3. Truthfulness and falsehood–United States. I. Title.

HV6326.S

364.1’34–dc22

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To all who seek the truth

Introduction

Perjurii poena divina, exitium; humana, dedecus
(The crime of perjury is punished by heaven with perdition, and by man with disgrace.)

–CICERO, DERIVED FROM THE TWELVE TABLES
OF ROMAN LAW, CIRCA 450 BC

Oh! What a tangled web we weave
When first we practice to deceive!

–SIR WALTER SCOTT, “MARMION” (1808)

W
e know how many murders are committed each year–1,318,398 in 2009. We know the precise numbers for reported instances of rape, robbery, aggravated assault, burglary, larceny, and vehicle theft. No one keeps statistics for perjury and false statements–lies told under oath or to investigative and other agencies of the U.S. government–even though they are felonies punishable by up to five years in prison. There is simply too much of it, and too little is prosecuted to generate any meaningful statistics.

Although lying seems to be an inherent part of human nature, the narrow but serious class of lies that undermines the judicial process on which government depends has been a crime as old as civilization itself. Originally prosecuted in England by ecclesiastical courts, by the sixteenth century perjury was firmly embedded as a crime in the English common law. The offender was typically punished by cutting out his tongue, or making him stand with both ears nailed to the pillory. False testimony that resulted in the execution of an innocent person was itself punishable by death. Exile, imprisonment, fines, and “perpetual infamy” were meted out as the centuries passed.

Perjury was a crime in the American colonies and has been a crime in the United States since independence. Today perjury and false statements are federal offenses under U.S. criminal code Title 18, and perjury is also outlawed by statute in all fifty states. The obligation to appear as a witness if summoned and to provide truthful testimony has been inculcated in generations of Americans through civics and history classes. “I swear to tell the truth, the whole truth, and nothing but the truth” is a phrase nearly every American knows by heart.

Yet lying under oath is a subjective crime. It requires the person telling the lie to know that the statement is false and to intend to lie. The subject of the lie must be “material,” of some importance, and not a trivial irrelevancy. Guilt or innocence turns not on accuracy, but on state of mind. For that reason, it is an extremely difficult crime to detect, prosecute, and prove.

Mounting evidence suggests that the broad public commitment to telling the truth under oath has been breaking down, eroding over recent decades, a trend that has been accelerating in recent years. Because there are no statistics, it’s impossible to know for certain how much lying afflicts the judicial process, and whether it’s worse now than in previous decades. Street criminals have always lied when confronted by law enforcement. But prosecutors have told me repeatedly that a surge of concerted, deliberate lying by a different class of criminal–sophisticated, educated, affluent, and represented in many cases by the best lawyers–threatens to swamp the legal system and undermine the prosecution of white-collar crime. Perjury is committed all too often at the highest levels of business, media, politics, sports, culture–even the legal profession itself–by people celebrated for their achievements, followed avidly by the media, and held up as role models.

“It’s nearing a crisis,” James Comey, the former deputy attorney general and U.S. Attorney who prosecuted Martha Stewart, told me. “People think the government is omnipotent. The truth is, this is an honor system. We count on the fact that witnesses will testify, produce documents and other evidence, and tell the truth. If not, the whole system is reduced to nothing but perjury and obstruction prosecutions.”

I have written for many years about business and politics, and as the scandals of the last decade mounted–Enron, WorldCom, Adelphia, Tyco, culminating in the shocking Bernie Madoff Ponzi scheme–it occurred to me that they shared a common thread: lying. Sometimes it wasn’t labeled perjury per se, but the essence of fraud is false statements, whether they’re accounting statements, SEC filings, or briefings to Wall Street analysts and investors. So many false statements were made in financial statements by business executives that the Sarbanes-Oxley reforms passed by Congress in 2002 require that chief executives and chief financial officers swear to the accuracy of their financial reports, and if they prove to be false, the executives face criminal prosecution. That such a law would even be necessary would surely have shocked earlier generations of American business leaders.

Lying in politics is hardly novel, but lying under oath by politicians has taken on new dimensions. It’s not necessarily a crime to have extramarital sex or to lie about it in press conferences. It is a crime to make false statements under oath. A grand jury investigated former vice presidential nominee and presidential candidate John Edwards, who repeatedly denied having an affair or fathering a child with Rielle Hunter, a woman on his campaign staff, after the
National Enquirer
broke the story in 2007. He eventually issued a press release admitting the allegations. The grand jury is reportedly examining a wide array of potential crimes, including whether Edwards induced an aide to submit a false affidavit claiming that he, not Edwards, was the father of Hunter’s child. (The investigation was ongoing and no charges had been filed by the end of 2010.)

In 1999 Arkansas federal judge Susan Webber Wright ruled that President Bill Clinton gave “false, misleading, and evasive answers that were designed to obstruct the judicial process” in the Paula Jones sexual harassment case when he said in sworn testimony that he had never been alone with Monica Lewinsky and had never engaged in any sexual activity with her. ( Jones’s lawyers had asked Clinton about Lewinsky and other women in order to show a pattern of such behavior.)

Judge Wright issued thirty-two pages of findings and held Clinton in contempt. She referred the matter to the Arkansas Committee on Professional Conduct, which suspended Clinton’s license for five years and fined him $25,000. The U.S. Supreme Court subsequently barred him from appearing before the high court. In resolving the criminal investigation against him, Clinton acknowledged that he “knowingly gave evasive and misleading answers” in a sworn deposition, and said, “I tried to walk a fine line between acting lawfully and testifying falsely, but I now recognize that I did not fully accomplish this goal and am certain my responses to questions about Ms. Lewinsky were false.” Special Counsel Robert Ray, successor to Kenneth Starr, closed the case without seeking an indictment or further penalties.

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