- The Washington Times - Thursday, February 5, 2004

NEW YORK (AP) — The star witness against Martha Stewart testified yesterday that she had berated him at least twice and once threatened to take her business to another brokerage because she did not like the telephone hold music.

Douglas Faneuil, who handled the questionable stock trade at the heart of Mrs. Stewart’s trial, confirmed he wrote e-mails to friends describing tirades by the homemaking queen.

In one e-mail on Oct. 23, 2001, after handling a call from Mrs. Stewart at Merrill Lynch & Co., Mr. Faneuil told a friend: “I have never, ever been treated more rudely by a stranger in my life. She actually hung up on me!”

Three days later, he wrote to another friend: “Martha yelled at me again today, but I snapped in her face and she actually backed down! Baby put Ms. Martha in her place!!!”

Shown copies of the e-mails in court yesterday, Mr. Faneuil said: “I believe I wrote those words exactly.”

The e-mails emerged under questioning by an attorney for Peter Bacanovic, Mrs. Stewart’s former stockbroker, who is accused of ordering Mr. Faneuil to give Mrs. Stewart the tip that led her to dump all her ImClone Systems stock on Dec. 27, 2001.

Mr. Faneuil initially supported Mrs. Stewart and Mr. Bacanovic’s story that they had a deal to sell her ImClone shares at $60. Mr. Faneuil claims Mr. Bacanovic ordered him to tell Mrs. Stewart the family of the ImClone founder was dumping its shares.

Attorneys for Mr. Bacanovic have described Mr. Faneuil as “fixated” on Mrs. Stewart while he worked at the brokerage, and were using the e-mails to try to convince the jury he did not like Mrs. Stewart and might have been out to get her.

Bacanovic attorney David Apfel asked Mr. Faneuil whether it was true Mrs. Stewart once said “something about how bad the hold music was. She told you she was going to leave Mr. Bacanovic and leave Merrill Lynch unless the hold music was changed.”

Mr. Faneuil confirmed the account. Jurors broke up in laughter.

In one e-mail to a friend, Mr. Faneuil described Mrs. Stewart mocking someone who answered phones at the brokerage.

“This is not a joke!” he quoted Mrs. Stewart as saying, just before hanging up. “Merrill Lynch is laying off 10,000 employees because of people like that idiot!”

As the e-mails from Mr. Faneuil were flashed on a giant screen in the courtroom, Mrs. Stewart maintained the stoic expression she has held throughout the 2-week-old trial. She did not speak to reporters as she left court.

Mrs. Stewart has been mocked by pundits, comedians — even in a campy TV movie — for a fierce temper. The image is at odds with the calm, gracious image she has projected in her media outlets and her line of homemaking products.

Mr. Faneuil is the government’s star witness against Mrs. Stewart and Mr. Bacanovic, who are charged with repeatedly lying to investigators about why Mrs. Stewart dumped her ImClone stock.

Earlier, Mr. Faneuil said he believed he would lose his job unless he lied to cover up the true reason Mrs. Stewart sold.

“I felt I would be fired if I didn’t lie,” Faneuil answered.

The remark came as Mr. Apfel apparently was trying to show that the payment plan stockbroker Mr. Bacanovic arranged for Mr. Faneuil had no connection to Mrs. Stewart’s stock trade.

But when Mr. Faneuil answered instead that he believed his job was at risk, Mr. Apfel asked U.S. District Judge Miriam Goldman Cedarbaum to strike the remark 1from the record. She did not.

In addition to working with Mr. Bacanovic to obstruct justice, Mrs. Stewart is accused of deceiving investors in her company, Martha Stewart Living Omnimedia.

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