UNEQUAL PUNISHMENT

There won't be much suspense when Martha Stewart is sentenced this Friday.
Judge Miriam Cedarbaum has little discretion in sentencing Ms. Stewart. The
U.S. Sentencing Guidelines set the rules, and Ms. Stewart probably faces
between 10 and 16 months in jail for her convictions on four counts. Such
narrow ranges were set up to promote "fairness," and treat criminals who
committed the same crime equally.

Even to those for whom the guilty verdict is reasonable, Ms. Stewart's case
illustrates a criminal justice system badly out of whack. Ms. Stewart faces
penalties that are so out of proportion to the crimes she committed, that
one cannot help conclude that the system penalizes the well-to-do much more
than poorer criminals who commit the same offenses.

Before the 1987 guideline, judges could sentence two criminals who'd
committed the same crime to vastly different sentences: Ms. Stewart could
have been let off with simple probation or given more than 10 years. But
judges were rarely that arbitrary. In fact, denying judges discretion has
made penalties less, not more, equal.

The reason is simple: the justice system imposes many types of penalties on
criminals, but the sentencing guidelines only make sure that the prison
sentences are equal. Beyond prison, criminals face financial penalties that
largely depend on the criminal's wealth. In addition to fines and
restitution, white-collar criminals face the loss of business or
professional licenses and the ability to serve as an executive or director
for a publicly traded company.

Ms. Stewart, for instance, will never again serve as president of Martha
Stewart Living and she's given up the $1.5 million annual salary that she
received as president. Her criminal fines could reach $250,000 while the
restitution and penalties from civil actions (both from the Securities and
Exchange Commission and shareholder suits) will be enormous. But that is
still only a small part of the impact of her conviction, given her
overwhelming importance to her company.

On the day Ms. Stewart was convicted the stock soared from $13.70 to $17 as
reports speculated that some type of deal had been struck limiting her
prison sentence, only to see the stock plunge to $10.50 by the end of the
day after she had been convicted. Her conviction changed the company's
value by over $320 million just between that day's high and low. As Ms.
Stewart owns 63% of the company, she personally suffered a loss of $203
million on that day. The other shareholders bore the rest of this loss; but
soon after the criminal case is concluded, they will file civil suits
against Ms. Stewart, forcing her to cover their losses.

Compare the penalties Ms. Stewart faces to those of, say, a drug dealer
convicted of the same crimes of giving false information to investigators.
Both would face the same prison sentence. But without any discernible
assets, the dealer would escape the other financial penalties Ms. Stewart
faces. If the dealer had a public defender, he'd even avoid paying a lawyer.

How can these two vastly different penalties for lying to federal
investigators be considered comparable? Surely defendants such as Ms.
Stewart can hope to offset these much higher penalties with highly skilled
lawyers, but this by no means levels the field. Ms. Stewart's total
financial penalty could easily amount to over $300 million dollars, while
the drug dealer faces a negligible additional penalty on top of imprisonment.

Prior to the sentencing guidelines, judges frequently took into account
these different penalties and made adjustments to somewhat equalize the
total penalty. But no longer.

It is hardly ever fashionable to defend the wealthy -- let alone wealthy
criminals. Yet the gap in punishment is so enormous it is impossible to
ignore. If fairness means that two people who commit the same crime should
expect the same penalty, the current system is not merely unfair, it is
unconscionable.