Guests: Robert Butterworth, Diana Tennis, Foster Winans, David Callahan

Next, we˜ll meet a man who got caught up in his own insider trading scandal and served time in prison.  He has some interesting advice for Martha Stewart. 

UNIDENTIFIED MALE:  History is full of people who redeemed themselves

by talking about their circumstances. 

DEBORAH NORVILLE TONIGHT is coming right back.

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NORVILLE:  So, what˜s going to happen next with Martha Stewart? 

While Ms. Stewart awaits her June 17 sentencing, she reportedly had an emotional meeting with her company board today, pleading with them to allow her to continue as a creative force. 

In the meantime, questions continue to mount following that guilty verdict.  Was it justified?  Was she treated fairly?  Should the sentence include jail time?

It all began with a lie, and then with an apparent attempt to cover up the lie.  In today˜s Christian Science Monitor, another felon with a crime similar to Stewart˜s consider the burden of carrying a lie. 

Back in 1985, when he was a columnist at the Wall Street Journal, Foster Winans gave a tip to a stockbroker, and as a result, he was tried and convicted of insider trading. 

As punishment, he spent nine months at the federal prison in Danbury, Connecticut, the same correctional institution where Martha Stewart might likely be sent, if she˜s given time. 

Foster Winans is the author of Trading Secrets, and he˜s here with in the studio now. 

Nice to see you. 

FOSTER WINANS, AUTHOR, TRADING SECRETS:  Thank you. 

NORVILLE:  You had written a column for the paper and made the mistake of sharing it with a broker before you shared it with the rest of us who buy the paper. 

WINANS:  Yes. 

NORVILLE:  And for that, they sent you away. 

WINANS:  Well, my case was very similar to Martha˜s, in that mine was a unique legal theory.  What I did was wrong.  I admitted what I did.  That˜s one of the big differences between what I did and what Martha did, was I admitted it.  I confessed. 

NORVILLE:  And you admitted it almost as soon as you told the lie. 

WINANS:  Right, exactly.  Well, exactly...

NORVILLE:  Pretty close. 

WINANS:  I got the phone call that I didn˜t expect being asked by a stock cop questions I didn˜t want to answer, and I lied, of course.  But within two or three weeks of that, I admitted what I did. 

I went in and told the story and said, I˜ll take my medicine.� 

But obviously, we did go to trial, because we were fighting it on a legal basis, and it went all the way to the Supreme Court. 

NORVILLE:  And ultimately, it went all the way to the Supreme Court, and it didn˜t go your way. 

WINANS:  Yes.  Exactly right, yes. 

NORVILLE:  At that point they sent you to prison. 

WINANS:  Right, exactly. 

NORVILLE:  And you were sent for nine months. 

WINANS:  Yes. 

NORVILLE:  For insider trading. 

WINANS:  Yes. 

NORVILLE:  What do you expect Martha Stewart, with your knowledge of the correctional system? 

NORVILLE:  What do you expect Martha Stewart˜s sentence might be?

WINANS:  Well, I˜m sort of in the same category of most people.  I think she˜s going to get about a year.  She˜s going to have to serve 85 percent of that year.  It will probably be in Danbury, where I was.

NORVILLE:  Right.

WINANS:  Which is now a women˜s facility. 

NORVILLE:  It˜s co-educational, or...?

WINANS:  No.  It was a men˜s facility.  But they closed it and turned it into a women˜s facility. 

NORVILLE:  Well, there are some federal institutions that are co-ed. 

WINANS:  I˜m unaware of them. 

NORVILLE:  Well-segregated, so we˜re told.

You, unlike a lot of people out there, who have been commenting on the Martha Stewart case, don˜t think it˜s necessarily completely over for her. 

You˜ve come up with your own recipe that you think, if she followed it, as she has instructed so many millions of us to follow her recipes, it could actually rebuild her reputation. 

WINANS:  Well, I look at these cases and I see two very distinct ends of the spectrum.  You˜ve got Martha Stewart lies and they throw the book at her and she eviscerates herself. 

And then on the other end, you˜ve got”for whatever you think of Arnold Schwarzenegger, who on day one confesses to serial groping, which is a much worse crime.  It˜s almost sexual assault.  And three days later, the voters rush to the polls to forgive him. 

So my recipe for Martha˜s redemption begins with an apology.  I think the first thing she should do is tell the world that she˜s not going to appeal her sentence.  I think that would be the best thing to do is let us off the hook from this media circus. 

Make a very heartfelt apology to the entire world, to her friends, her family, her stockholders, all of those people. 

When she gets to jail, she should do her time and not complain and not pay somebody else to make her bed, not pay somebody else to wash her clothes, which is something that rich people do when they go to jail. 

NORVILLE:  Can they get away with that?

WINANS:  Yes.  You pay somebody 50 cents a day to do your clothes. 

It˜s an interesting little world.

NORVILLE:  What else are you going to do?  You˜ve got nothing but time in prison.  You may as well make your bed and save 50 cents.  I don˜t get that.

WINANS:  I don˜t get it, but some people like to pay other people to do their work.

And while she˜s in prison, I think she should help other inmates write letters, help them write petitions to their judges, help them write whatever they want to do.  Use her talent, maybe you know, run a clinic for women who want to get into business.

And then I think she should come out and become a spokesman for prison reform and maybe start an institute for young women. 

NORVILLE:  Let˜s throw the list up there.  We saw a couple of points. 

Can we just put up one through seven, so we can see the whole recipe? 

Because a lot of us like to read down to the end.

So dedicate your life to a cause.  You think that the woman who built a mega-business can teach other women how to do the same thing. 

WINANS:  Absolutely.  I mean, she˜s smart.  She˜s very successful. 

She really knows what she˜s doing, and she has a lot to offer. 

And you know, it˜s not the same as”I˜ve heard people say well, she should do what Michael Milken did.  Showing up at celebrity charity balls and things like that and showing up for photo ops for centers for the less-advantaged people...

NORVILLE:  But he˜s done a lot to raise money for prostate research, as well. 

WINANS:  He does, he does.  But that, I don˜t think, is about personal redemption.  Personal redemption is one-on-one. 

When I was in trouble, I worked with AIDS patients, and I went to their homes and I helped them, you know, cook and things like that.  And I˜m not bragging, I˜m just saying I did it. 

NORVILLE:  Because you felt you were making a difference. 

WINANS:  Yes. 

NORVILLE:  And it was a way of paying. 

And then what was the last three points?

WINANS:  The last three points are she should embrace prison life, advocate prison reform and sentencing reform.  And then she should volunteer to go on SATURDAY NIGHT LIVE.�

NORVILLE:  You think so?

WINANS:  I think she needs to show the world that she has a sense of humor and a sense of context.  With all the horrible things that happen to people in this world, what happened to Martha is a tempest in a teaspoon.  And she should just get over herself and let people see that she˜s real. 

NORVILLE:  Kind of the same way that Janet Reno came dancing on, you know, Janet Reno˜s Dance Party.�  She busted through the wall, and there were the two Janets?

WINANS:  Yes.  And the last thing she should do, is she should do what all crooks do.  She should write a book.  And she should write a book and donate the proceeds to charity.  And she should tell us who she really is and how she feels about what happened to her. 

NORVILLE:  And you think that could put Martha on a new start?

WINANS:  I think that people will love her all over again if she follows that recipe, seasoned to taste. 

NORVILLE:  All right.  There you have it.  Foster Winans.  So stick with us.  We˜re going to take this discussion up to the next level. 

We˜ve been talking about people cheating.  Why?  The answer might surprise you. 

And when we come back, we˜re also going to look at some of the most memorable lies ever told. 

We˜ll be back after this quick break.

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CLINTON:  I did not have sexual relations with that woman. 

NIXON:  I˜m not a crook. 

MARTHA STEWART, FOUNDER, MARTHA STEWART LIVING OMNIMEDIA:  I am innocent, and I think that the judicial system, the upcoming trial will prove that. 

ROSE:  I did not bet on baseball. 

MILLI VANILLI (singing):  Baby come alive.  Call me any time.

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NORVILLE:  Well, we couldn˜t resist.  We just had to give you a look at some of the most memorable lies of late.  That last one, you may recall pop group Milli Vanilli, they faked everyone out by lip-syncing their way to fame and fortune. 

So what do all those folks have in common?  Well, they˜re all part of a lying and cheating culture.

Martha Stewart˜s conviction on Friday is just the most recent in what is a long list of high flyers who˜ve gotten busted for lying and cheating. 

My next guest is the author of The Cheating Culture,� David Callahan, who says that lying and cheating in America are so pervasive that when it comes to cutting ethical corners, there is no us� and them.�

Welcome, and we˜re glad to have you.  We should not that Foster Winans is still with us, as well.

David, let me ask you, I know the easy answer to the question why do people cheat is because everybody else does.  But there˜s got to go more to it than that. 

DAVID CALLAHAN, AUTHOR, THE CHEATING CULTURES�:  Well, there is more to it.  You know, I think the people at the top of our society, the wealthy, the CEO˜s, the powerful, I think they˜re cheating because they often think they can get away with it. 

And in many cases, that is”that˜s the case.  A lot of these government watch dogs, like the SEC and the IRS have been flat on their back. 

A lot of these people think that they˜re”you know, the wealthy and the powerful think they˜re above the law and untouchable. 

Meanwhile, more ordinary Americans, I think they˜re cynical, you know.  They think no rules are worth following, that the rules aren˜t enforced fairly, and they want to get back at the system. 

NORVILLE:  But as your book points out, a lot of people who would clearly look at the news footage we just showed, Andrew Fastow from Enron and Dennis Koslowski from Tyco and some of the other disgraced executives, they know what they˜re accused of doing.  And they would say that˜s terrible.  I would never do it. 

But they might pad their time sheet.  They might cheat on their golf score.  They might get cable without paying for it, because their neighbor knows how to rig the thing, even though they˜d never steal a coffee mug from the shelf at the store.  But they˜re cheaters, too. 

CALLAHAN:  Well, that˜s the interesting thing.  I mean, we live in a time when crime is way down over the last decade.  Drunk driving is down; abortion is down. 

I mean, there˜s all sorts of ways in which our values have changed in the last decade or two. 

And yet, cheating is up; cheating is everywhere.  And what I say is that, you know, it reflects our culture.  We˜ve become a very materialistic, cutthroat culture where people are focused on money, focused on financial success.  They judge their self-worth by their net worth. 

Meanwhile, the watch dogs have been sleeping, and, you know, it just flows naturally from that kind of environment. 

NORVILLE:  The watchdogs are also overwhelmed.  I read one statistic a few years ago where, statistically speaking, it would take the SEC 10 years to hit every publicly traded company to do a really thorough check of their books.

There˜s not the manpower to do that, and the guys, you know, who would be the fat cats that cut the corners know that.

CALLAHAN:  And you have to wonder, why isn˜t there that manpower? 

I mean, we are spending $20 billion a year on a war on drugs.  We have two million people in prison.  We˜ve put 100,000 new cops on the street, and yet we can˜t find the money to police Wall Street and the financial markets.  The SEC have been overwhelmed.  The white-collar criminal task forces have been overwhelmed.  Despite the scandals that we˜ve had, there˜s been very little bolstering of these enforcement agencies.  And I think it˜s a big scandal. 

NORVILLE:  But the big thing with the Martha Stewart verdict”and the prosecutors said on the front steps of the courthouses”is, this is a message to everyone out there.  You must be honest.  You must tell the truth.  Liars will be punished.

Foster Winans, you went to federal prison and sat next to an awful lot of liars during the nine months you were there. 

R. FOSTER WINANS, AUTHOR, TRADING SECRETS:  Yes. 

NORVILLE:  Did they learn anything from the experience? 

WINANS:  It˜s an interesting question.

A lot of people in prison sit around and complain about getting caught and how lousy the system is. 

NORVILLE:  Right. 

WINANS:  There aren˜t very many people who sit around and talk about, geez, I screwed it up.  I hurt all these people.  I don˜t really think so. 

(CROSSTALK)

NORVILLE:  They didn˜t learn anything. 

WINANS:  Well, a lot of them don˜t learn anything.  That˜s true, yes.

NORVILLE:  They˜re still cheating when they get out. 

WINANS:  Well, some of them are cheating while they˜re in. 

There˜s a guy in Allenwood who managed to get $40,000 out of a sheik˜s account into his bank account from a prison telephone.  It˜s not a good environment.  By the way, maybe some of those people shouldn˜t be there.  Maybe they should be in some kind of rehabilitation setting. 

NORVILLE:  David Callahan, it˜s a great book and it˜s a good read.  I didn˜t know that 82 percent of golfers cheated on their scores, for instance, among many of the other facts that you have in here. 

But what I˜m not sure is, is, what˜s the answer?  You talk about ethical education in school, making the case that parents are overburdened, overworked, and not able to spend the kind of quality time that back in a less-rushed time parents did. 

CALLAHAN:  Right. 

NORVILLE:  We can˜t ask the schools to do everything. 

CALLAHAN:  Well, what I argue in my book is that we need tougher rules and better values. 

I mean, one thing we really need to do is we need to crack down on all this cheating at the top of our society, because, you know, the CEOs, the celebrities, they are the role models in America today, and if they are seen getting away with cheating, it sends a bad signal to everybody else and makes people cynical, which is why I think this Martha Stewart verdict is a good thing. 

Meanwhile, we need better values.  Character education works.  We can teach kids to think through the tough ethical dilemmas that come their way in life.  We˜ve been saying, talk to your kids about sex, talk to your kids about drugs. Well, you also need to talk to your kids about how to be honest in a society where there˜s a lot of temptations to cut corners to get ahead.

NORVILLE:  I see Foster Winans˜ head going up and down. 

I˜m going to let that be the last word, but I know you agree with what David said. 

WINANS:  Parents set our role models, too.  He˜s right.  At the top, people need to be role models, but parents have a job, too. 

NORVILLE:  All right, Foster Winans, David Callahan, thank you both very much.