If jurors for Martha Stewart’s criminal trial share James S. O’Rourke IV’s assessment of her, it would not be a good thing for the domestic diva.p. O’Rourke, professor of management and director of the Fanning Center for Business Communication at the University of Notre Dame’s Mendoza College of Business, is quite familiar with Stewart’s case.p. Last year, he directed a Fanning Center case study of Stewart’s legal troubles stemming from her December 2001 sale of 3,928 shares of ImClone Systems stock. Stewart, who was a friend of ImClone founder Sam Waksal, sold the shares just before the Food and Drug Administration rejected the company’s cancer drug. Prosecutors allege Stewart tried to cover her tracks by lying to investigators and shareholders of her publicly traded company, Martha Stewart Living Omnimedia.p. Notre Dame’s Fanning Center regularly publishes case studies of companies in the public eye. The studies are used in business school classrooms to generate discussion and analysis.p. “Business education is heavily dependent on the case study method,” O’Rourke said. “In general, case studies are written to help illustrate some aspect of managerial information gathering and decision making.”p. Studies are never “written for the purpose of naming heroes and villains,” O’Rourke added, and in fact the study itself is a neutral, factual account of Stewart’s case.p. But that doesn’t mean O’Rourke hasn’t formed a few opinions on the woman who built a media empire on her talent for cooking, gardening and decorating.p. >From the beginning, Stewart has mishandled the accusations of insider trading, O’Rourke said.p. “Early on, she thought she’d beat it,” he said.p. O’Rourke pointed to Stewart’s decision not to hire a criminal attorney initially as a sign of her overconfidence.p. But why be so cavalier when your self-built, multimillion dollar empire is on the line?p. O’Rourke blamed it on that quality that foils many a tragic hero or heroine: Hubris. Stewart could have dealt with the problem more than a year ago by admitting to the mistake, paying a fine and moving on, he said.p. Instead, she “dug in her heels” because of her intense pride, O’Rourke said.p. Stewart now faces criminal charges of securities fraud, conspiracy, obstruction of justice and making false statements.p. The securities-fraud charge alleges Stewart misled shareholders about the ImClone investigation to keep her company’s stock price from dropping.p. A former stockbroker, Stewart held a Series 7 license to sell securities and was a New York Stock Exchange director.p. She clearly knew the rules, O’Rourke said.p. Since Stewart’s June 4 indictment, she has set up the Web site www.marthatalks.com . The site includes an open letter from Stewart as well as notes from fans and pro-Stewart op-ed pieces from various publications. “What they’re trying to do is influence public opinion,” O’Rourke said. “Too late for that.”p. O’Rourke is equally unmoved by claims that Stewart’s prosecutors are motivated by sexism or the desire to make an example out of a celebrity.p. “It isn’t that she’s getting more attention from the U.S. attorney,” he said. "The attention she’s getting is in the press.p. “There are plenty of people who are being prosecuted who aren’t celebrities.”p. Including, he added, ImClone’s Waksal.p. The Fanning Center’s interest in the case, however, is not so much in Martha Stewart the person but Martha Stewart the brand name.p. Stewart’s company was built on her image, and her image was everywhere.p. There’s really no comparison, O’Rourke said, although Oprah Winfrey may come close. But even celebrity designers like Ralph Lauren, Tommy Hilfiger and Steve Madden are merely the people who serve as a brand’s inspiration or public face rather than its basis.p. “Martha is very much wickered in personally with her brand,” O’Rourke said.p. Following her indictment, Stewart stepped down as chief executive and chairwoman of her company.p. Since then, Martha Stewart Living Omnimedia announced plans to launch the new magazine “Everyday Food.”p. “Is the lifeboat ‘Everyday’?” O’Rourke mused. “It was Martha Stewart that gave it the panache. Will ‘Everyday’ work?p. “We’ll have to wait and see.”p. Staff writer Ashley McCall:
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p. p. July 10,2003
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