Can This Man Save Martha?

Robert MorvilloPhoto: APWorldWide

Martha Stewart’s defense lawyer is a mess. He’s the first to admit it. “Take a seat over there,” Robert Morvillo says, “if you can clear a space.”

He laughs, settling in behind a desk whose every inch is covered with clutter. There’s a baseball autographed by Joe DiMaggio. A plastic bust of Mozart. A New York State Police uniform patch. Envelopes stamped MORVILLO: CONFIDENTIAL. Open cans of Diet Coke. A giveaway Knicks coffee mug. An Irish flag on a spindly stick threatening to topple over. “I lost a bet on the Italy-Ireland soccer game, so I had to put the Irish flag on my desk,” Morvillo says with a shrug. “Years ago.” Which is easy to believe: The older junk is coated with dust. On the wall behind Morvillo hang black-and-white photographs of baseball immortals; several have slipped halfway out of their frames.

Though Morvillo is an unshakable Mets fan, his 64-year-old physique is pure Don Zimmer. He tips back in a worn blue chair and folds his hands on his ample belly. As he talks, his eyes fix on the farthest corner of the ceiling. Maybe it’s simply an eccentricity. Then Morvillo says something in passing that seems to give his upward gaze meaning. “She’s upstairs,” he says. “Working.”

She, of course, is Martha Stewart. In a tenth-floor conference room one flight above Morvillo’s midtown office, the embattled domestic mogul pores over documents and retraces every thought and action relating to her fateful sale of 3,928 shares of ImClone stock, worth $228,000.

And she waits to resume sparring with Morvillo. He’s preparing Stewart for the likelihood that she’ll need to make a pivotal appearance on the witness stand. “I’m by far the nastiest person in my firm,” Morvillo says with a smile. “I’m rougher on her than any prosecutor will be.”

Later, on the phone, Stewart says she loves Morvillo’s toughness. But will his rugged training make a real cross-examination look tame? Stewart chuckles nervously. “I don’t know,” she says, “if I believe that.”

Martha’s need for control is much mocked, if somewhat exaggerated. Now Stewart, 62, has been forced to surrender command of her fate. She’s handed it to a man who is nearly as anonymous as she is famous, even though Bob Morvillo has been one of the city’s savviest white-collar criminal-defense attorneys for more than three decades—and is a great old-school New York character with an Ed Koch–ian nasal delivery, a flaming temper, and a Brooklyn–Long Island accent that turns totally into tote-lee and Martha into Mar-thur. “He’s the boss,” Stewart says.

Morvillo’s stellar reputation inside the legal community is founded primarily on smooth behind-the-scenes deal-making, avoiding trouble for clients like Merrill Lynch and Amerada Hess. He’s had a few headline trials—like the bribery rap against real-estate broker John Zaccaro, Geraldine Ferraro’s husband—but those battles took place long before cable TV transformed the celebrity trial into a frothing spectacle. “Am I gonna like it when I turn on the television and see some nitwit criticizing me? No, I’m not,” Morvillo says. “Am I going to change the next day because of what that nitwit said? I hope not.”

Stewart has the most at stake, of course, and Morvillo places her best interests far above any other concerns. Still, retirement is on his mind and the Stewart case is likely his last chance to play before an audience of millions. “The glare of publicity is so high on this one,” he says. “It’s gotta have an effect on your psyche and your ego. There’s a stronger desire to win not just for the client but to preserve your own sense of yourself. You can’t let that get out of hand.”

Especially when he’s facing prosecutors who are equally conscious of the spotlight and eager to nail Stewart on charges of conspiracy, obstruction of justice, and securities fraud. The government’s late-October failure to convict investment banker Frank Quattrone of obstruction of justice has only made the Feds hungrier for victory in their next big corporate-corruption trial. The lead prosecutor in the Stewart case is Karen Seymour, head of the Southern District’s criminal division. “The only thing rarer than the head of the criminal division trying a case is the U.S. Attorney himself doing it,” says Robert Heim, a former SEC prosecutor turned white-collar-defense lawyer.

For once in her life, Stewart needs substance far more than style. Morvillo presents himself as just-folks, a regular hardworking guy who has been lucky to earn a decent living. “Inertia,” he says, “is one of the prime forces in my life.” The lack of pretense is genuine. But clients don’t pay Morvillo $650 an hour because he’s good company. Morvillo is probably the most cunning strategist of his generation of high-powered New York white-collar-defense lawyers, a group made up of legends like Charles Stillman (whose clients include Tyco’s former chief financial officer) and Stanley Arkin (Revlon’s Ron Perelman).

Last week, Morvillo began to outline his plan for saving Martha. On January 20, he’ll start selecting twelve jurors who somehow haven’t been marinated in the nearly two years of anti-Martha hype. His most difficult decision—whether to put Stewart on the stand—will come roughly three weeks later, after he’s seen the prosecution’s case. That’s when the flashiest thing about Bob Morvillo, his trial skills, will take center stage. “Part of it comes from experience,” he says. “And part of it you’re just born with.”

His father was a lawyer who never practiced. M. Victor Morvillo had the misfortune to graduate from St. John’s in the late thirties, so he did what the Depression dictated, taking the first decent job he found, with Metropolitan Life Insurance. His wife, Marie, was a licensed pharmacist who became a homemaker after Bob, their first child, was born. The family moved from Fort Hamilton, Brooklyn, to Long Island in 1944. Morvillo still lives in Rockville Centre, the town where he grew up.

Though he excelled in high school, Morvillo says he had no aims or ambitions and can’t explain his choice of college. “People wanted to go to Penn and Dartmouth and Cornell,” he says. “I ended up at Colgate.” He decided to take a shot a law school because, well, that’s what his father did. This time, he set his sights a little higher, and at Columbia Morvillo made Law Review. That same year, 1963, he married Catherine Shields, a second-grade teacher.

Clerking for U.S. district judge William Herlands piqued Morvillo’s interest in working as a prosecutor. “This little tubby guy came in, and he was terrific,” Steve Hammerman says. “And loud. You didn’t have to be in his courtroom to hear his summation.” Hammerman joined the U.S. Attorney’s office right before Morvillo arrived in 1964. He’s now the NYPD’s top legal official, but the friendship began when they were both young prosecutors and deepened during the twenty years Hammerman was an executive at Merrill Lynch, where he frequently hired Morvillo as the financial giant’s outside counsel on regulatory issues.

The first case Morvillo handled as a lead prosecutor involved an allegedly false statement, on an application to become a merchant seaman. “I also tried a case where a guy stole $8 worth of slacks,” Morvillo says. “They had those kinds of cases to cut your teeth on. If you screwed it up, nobody cared and you went on to your next case.” Not that he screwed it up. “Yeah,” Morvillo says of his virgin trial, “I did win.” Within three years, he was prosecuting the first major scandal of the Lindsay administration, against a water commissioner accused of taking payoffs from construction companies.

As his four sons were born (two are now federal prosecutors in New York, one is a defense lawyer, and the other is a rock musician), Morvillo attempted to give himself a raise, working in private practice at Reavis & McGrath for two years. But he was soon bored—“none of the firm’s other lawyers had enough confidence to go and try a case”—and jumped back to the civil-service payroll, this time working for U.S. Attorney Whitney North Seymour Jr. (Karen Seymour’s uncle-in-law) as chief of the Southern District’s criminal division. “I got a real dose of securities-fraud work,” Morvillo says. “It was interesting. I also thought it was gonna be the crime of the future.”

In 1973, Morvillo teamed with John Martin and Otto Obermaier to open a firm specializing in high-end alleged wrongdoing. “There were no white-collar firms at that time,” Morvillo says. “But we saw the fact that more federal manpower was being deployed to white-collar crime.” Executive misbehavior has been very, very good to him: The firm, now called Morvillo, Abramowitz, Grand, Iason & Silberberg, has grown from 3 lawyers to its current 36.

“Stewart’s need for control is much mocked. now she’s been forced to surrender command to a man who’s nearly as anonymous as she is famous. ‘He’s the boss,’ she says.”

Morvillo and his founding partners pragmatically exploited a business opening, but he says they also set up the firm with a moral posture. “No organized crime, no drugs,” Morvillo says. “Without those kinds of clients, we could walk into the U.S. Attorney’s office representing a defendant and not have somebody turn around and say, ‘Here come those sleazebags again.’”

Within the legal community, Morvillo is renowned for his discretion, keeping his corporate clients out of the headlines. He’s also fielded the odd high-profile case, where his signature talents are more visible: the deftness to map out complex strategies months in advance, and the dexterity to tear up those plans at a moment’s notice. In 1987, he was minutes away from cross-examining the key prosecution witness in the bribery case against John Zaccaro. Then Morvillo learned two crucial new pieces of information about the witness’s state of mind. He dropped his plans for a lengthy, antagonistic cross-examination and instead focused on two simple questions. The answers obliterated the government’s case, and Zaccaro was acquitted.

On the downside, Morvillo is also known for his temper. Michele Hirshman, now chief deputy to New York State Attorney General Eliot Spitzer, opposed Morvillo in 1989 and beat him in a bribery case against Bronx congressman Robert Garcia (Morvillo won on appeal). “If Bob doesn’t think something is fair, you see it on his face,” Hirshman says. “Lawyers get mad all the time in trials when things get tense, but when Bob is angry, you know it. And judges don’t like to see faces in the courtroom; they think it sends a bad message to a jury.”

Hirshman, who praises Morvillo’s legal acuity, saw his bulldog tenacity again last year when he and lawyers from Skadden, Arps fought for Merrill against Spitzer. Morvillo favored toughing it out in negotiations even after analyst Henry Blodget’s internal e-mails about puffing up “piece of shit” stock offerings hit the newspapers. Though Merrill was forced to pay a $100 million fine, apologize to investors, and swallow most of Spitzer’s reforms, Morvillo remains defiant, blaming the attorney general for Merrill’s public-relations nightmare and blasting Spitzer as “unprofessional.”

“He went behind our backs,” Morvillo says. “What Spitzer did surprised us all, by putting the e-mails into the public arena while we were in the process of negotiating. The story is far more complicated than whether we decided to string it out or not string it out. But if it had been completely up to me, I woulda held out even longer.”

So is Morvillo right for Martha? His knowledge of federal-court tactics and securities law is unmatched, and his down-to-earth manner softens Stewart’s stony image. Yet Morvillo hasn’t grappled with anything like the Stewart media circus, and Miriam Cedarbaum, the judge presiding over the Stewart case, already appears impatient with Morvillo’s moods.

Perhaps Morvillo could have picked more flattering company for Stewart. But then, she hasn’t caught many breaks lately.

“All of the briefs are excellent,” Judge Miriam Cedarbaum says in a grandmotherly singsong voice. “They are so clear and comprehensive that no oral argument is necessary.” Good writing carries a man only so far, though: On this mid-November morning, Cedarbaum rejects Morvillo’s motion to dismiss five counts of the indictment against Stewart.

Days later, over pasta at Torre di Pisa, Morvillo points out a potentially good sign from the hearing: While Cedarbaum didn’t drop the charge that Stewart’s public declaration of innocence constitutes securities fraud, she did adopt Morvillo’s description of the charge as “novel.” “We thought that was significant,” Morvillo says.

He’ll need to score much bigger points next month. The conventional wisdom is that the case will come down to Stewart’s word against Faneuil’s. But the defense may try to push the focus in a different direction, highlighting the activities of Faneuil and Bacanovic in January 2002, after the federal investigation began and the alleged cover-up was launched. Morvillo will also emphasize the notion that Stewart’s right to free speech is being wrongfully criminalized. And when the government cites Stewart’s acumen, and her seven years as a stockbroker, as reasons she should have known her ImClone sale was illegal, Morvillo will parry: “If she really is that smart, why would she risk a billion-dollar company by engaging in a $40,000 transaction?”

Arguing the material evidence might be trickier. Bacanovic has claimed that on December 20, 2001, he wrote a note recording Stewart’s desire to sell ImClone if the stock price dropped to $60; the crucial scribbling, however, seems to be in a different ink than the rest of the document. Stewart has said she spoke to Bacanovic about ImClone just once after December 28; the Feds will likely counter with phone records showing multiple calls.

Then there’s the matter of an altered phone-message log in Stewart’s office computer. The indictment alleges that on January 31, four days before Stewart was scheduled to be interviewed by prosecutors, she neutered her assistant’s version of Bacanovic’s December 27 call, changing the computer note from “Peter Bacanovic thinks ImClone is going to start trading downward” to “Peter Bacanovic re imclone.” The assistant restored the original wording, apparently at Stewart’s behest, but the back-and-forth will be hard to explain away.

“This is a very tough case for Morvillo,” says veteran New York defense lawyer Peter E. Quijano. “The government doesn’t just have a rat, it doesn’t just have the inference from a series of events, it doesn’t just have some scientific evidence—it has each one supporting the other. Morvillo grew up in the federal world, and he knows exactly how the government will come after him. But he’s gonna need an incredible amount of finesse.”

The maneuvering is well under way. Morvillo, who rarely uses a jury consultant, has one onboard this time and is combing through poll results to understand who likes Martha and who hates her. “Most clients can’t afford a jury consultant, because it’s very, very expensive,” he says. “In this kind of case, where you have a client with a fair amount of money, and you have the ability to get public reaction to the client or the problem itself, I think they’re very useful.” He’s also been involved in decisions about Stewart’s pretrial PR campaign, including her Martha Talks Website and her Barbara Walters interview. “To the extent you can do constructive things to help the image of your client or help the jury pool understand your position—or even, God forbid, be biased for you rather than against you—sure, that’s great,” Morvillo says. “So you think about those things you can do within the rules.” The Walters interview was useful for a second reason: as a high-pressure rehearsal for Stewart’s possible appearance on the witness stand.

Not long after she hired him, Stewart treated Morvillo to dinner at Café Boulud. “To get to know each other a little better,” Stewart says. “I took another one of my attorneys, Allen Grubman, along with me, because I trust Allen’s intuitive nature, and Allen doesn’t do criminal law, so I wanted to hear what he had to say, too. During dinner, I asked Bob, ‘How many of your clients do you see after a case is done?’ And he thought for a very short period of time, and he said, ‘About maybe 5 percent.’ And I said, ‘Well, why?’ And he said, ‘Well, frankly, I represent people at the worst time in their life. And win or lose or draw, people don’t want to see me afterward.’ And I thought that was the most honest, nicest possible answer a person could give me in this situation. And I guarantee you I will be seeing Bob Morvillo after the case.”

Morvillo appreciates the sentiment; he’s grown fond of Stewart. But 40 years in the law has made him a realist. “This is a win-or-lose business,” he says. “If you win, even if the client doesn’t like you too much, the client is more tolerant.” And no matter how tight their pretrial bond, Morvillo knows that Martha Stewart will be a whole lot less thrilled to talk to him if she’s calling from prison.

Can This Man Save Martha?