For Bonds, Lying Worked Well: Interview With James B. Stewart

Tap for Slideshow
Source: The Penguin Press via Bloomberg

The cover of "Tangled Webs: How False Statements Are Undermining America: From Martha Stewart to Bernie Madoff" by James B. Stewart.

Close
Source: The Penguin Press via Bloomberg

The cover of "Tangled Webs: How False Statements Are Undermining America: From Martha Stewart to Bernie Madoff" by James B. Stewart. Close

The cover of "Tangled Webs: How False Statements Are Undermining America: From Martha Stewart to Bernie Madoff" by James B. Stewart.

Photographer: Paul Goguen/Bloomberg

James B. Stewart, author of "Tangled Webs: How False Statements Are Undermining America: From Martha Stewart to Bernie Madoff." Close

James B. Stewart, author of "Tangled Webs: How False Statements Are Undermining America: From Martha Stewart to Bernie Madoff."

Photographer: Daniel Acker/Bloomberg

Martha Stewart went to prison in 2005 for five months for obstructing justice in a federal investigation of trades involving ImClone Systems Inc. Close

Martha Stewart went to prison in 2005 for five months for obstructing justice in a federal investigation of trades... Read More

Photographer: Jin Lee/Bloomberg

Bernard Madoff pleaded guilty to defrauding investors in a massive Ponzi scheme. His wine collection, consisting of 58 lots, was sold at Morrell $ Co. Fine Wine Auctions on May 18. Close

Bernard Madoff pleaded guilty to defrauding investors in a massive Ponzi scheme. His wine collection, consisting of... Read More

Once upon a time, perjury was an offense so serious that in England you could get your tongue cut out. Nowadays people lie with impunity under oath and live to babble about it.

But imagine if Martha Stewart had to mime her TV show. Or if a lingual intervention kept Bernie Madoff from another promotional interview. Might make people lie a little less.

Stewart and Madoff join baseball slugger Barry Bonds and Lewis “Scooter” Libby, an aide to former Vice President Dick Cheney, in James B. Stewart’s remarkable new book “Tangled Webs.”

False statements, writes the Pulitzer Prize-winning author, undermine “the ideals of fair play, integrity, and trust to which people of goodwill everywhere aspire.” His quartet illustrates the ripple effects of lying on friends, associates, investors, voters and society.

We spoke at Bloomberg’s New York headquarters shortly after Bonds was found guilty on one miserable count of obstructing justice, but not perjury, after an investigation lasting almost eight years and costing millions of dollars.

Hoelterhoff: Were you surprised?

Stewart: I was surprised he was convicted of anything, even though outside the courtroom I think the evidence is overwhelming.

Juries can be faced with overwhelming evidence, but if they have an overarching sense of “this isn’t fair because everybody else is getting away with it,” then they don’t convict.

Hoelterhoff: So, for Bonds, lying worked.

Massive Lying

Stewart: I’m afraid that’s the conclusion people will take away.

But what I was trying to illustrate in the Bonds case, even before the verdict came out, was how perjury cripples the judicial system. In this country the entire judicial system rests on an honor code. That people will put their hand up, swear to tell the truth, and then actually tell the truth.

The amount of lying in the steroid investigation that led to Bonds was massive. Most of the people started out lying. They lied, they changed the story, and they were never held accountable for it.

Greg Anderson, Bonds’s trainer, refused to talk. He could either have exonerated Bonds if he were innocent or convicted him if he were guilty.

As he was getting out of jail, his fellow inmates gave him a standing ovation, and to me that pretty much says it all. That silence, that kind of loyalty, is the code of the prison yard, of the Mafia, of organized crime. This is the society that values loyalty, and silence and lying, over telling the truth.

Hoelterhoff: A clinical psychologist you cite observes that highly successful people tend to lie more easily and more frequently than normal or average people.

Worse Than Ever

Stewart: I think she’s right, and there are a number of reasons why people at the top are more prone to lying. The simplest answer is they lie because they think they’re going to get away with it. And they’re shrewd evaluators of risk and reward.

Hoelterhoff: And quite a number end up on Wall Street.

Stewart: Lots of them. I had the idea for this book when I was giving a talk about all those corporate scandals of the last 10 or 20 years: WorldCom, Adelphia, Tyco. And I was thinking, what’s the common thread here? And I realized it’s lying, flagrant lying by CEOs misleading investors.

Hoelterhoff: What’s changed since you wrote “Den of Thieves” about the high flyers of the 1980s, Milken and pals?

Stewart: It’s worse. I look back nostalgically to an era where we thought, “Oh my God, that’s so horrible, that whole junk bond scandal and insider trading!”

I mean insider trading is rampant. We have a Sarbanes-Oxley bill making it illegal for CEOs and CFOs to sign false financial statements. But who ever would have thought such a thing would even be necessary? Law enforcement is important in this area, but it can’t do it all. If everyone is lying under oath, there isn’t enough law enforcement in the world to curb that.

It’s got to start at a deeply personal moral level.

Hoelterhoff: You ask that the president speak out on lying. It seems to me we might be better off importing a thousand nuns from Manila.

Past Presidents

Stewart: Call me naive. When I ask the president to say something about it from the top, it’s because I think that’s what it takes because we have such a sorry track record.

In Bill Clinton we had a president who did lie under oath, and very grudgingly admitted it. Then George Bush -- after a top aide, Scooter Libby, was convicted of lying and flagrantly committing perjury on multiple occasions, Bush commuted his sentence. Libby didn’t have to go to jail.

What kind of message does that send?

Hoelterhoff: You detail how Madoff was actually a terrible liar and it still took decades to nail him.

Stewart: I really use him as the main example of what happens when law enforcement is confronted with perjury, false statements under oath, and they just shrug and say, “Oh well, everybody lies.”

Hoelterhoff: Martha Stewart, of course, insists she didn’t lie about that well-timed stock sale and made quite the comeback.

Stewart: And she’s now saying she doesn’t even remember why she was prosecuted. But OK, let’s say Martha Stewart is fine -- look at all the other people she damaged.

Her stock broker isn’t fine, his young assistant isn’t fine, the shareholders of her company are not fine. Many of her employees at the time were put through the ringer; they’re not fine.

“Tangled Webs: How False Statements Are Undermining America: From Martha Stewart to Bernie Madoff” is published by Penguin Press ($29.95, 473 pages). To buy this book in North America, click here.

(Manuela Hoelterhoff is executive editor of Muse, Bloomberg’s arts and leisure section. All opinions are her own. This interview was adapted from a longer conversation.)

To contact the writer responsible for this story: Manuela Hoelterhoff at mhoelterhoff@bloomberg.net.

To contact the editor responsible for this story: Jeffrey Burke at jburke21A@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.