Committee asks Justice Department to investigate Martha Stewart

WASHINGTON -- Lawmakers asked the Justice Department on Tuesday to begin a criminal investigation into whether Martha Stewart lied to a House committee trying to determine if she received inside information before selling her ImClone stock.

"As members of Congress we believe it is our obligation to forward specific and credible information in our possession that could suggest a federal crime has been committed," the Republican and Democratic leaders of the House Energy and Commerce Committee wrote to Attorney General John Ashcroft.

Shares of Stewart's company, Martha Stewart Omnimedia, jumped almost 10 percent immediately after the lawmakers' announcement Tuesday afternoon. Analysts said investors apparently viewed the referral to the Justice Department as preferable because it spares Stewart from having to appear before Congress under subpoena. The shares closed Tuesday at $9.05, up $1.30, or 16.8 percent, from a day earlier in afternoon trading on the New York Stock Exchange.

Stewart's attorneys said they welcomed the committee's action because the Justice Department is the appropriate authority to address questions related to her stock sale.

Ready for investigation

"I strongly disagree with the analysis of the committee and its staff but am pleased that the matter will now be exclusively in the hands of professional law enforcement authorities who are trained to conduct a responsible and thorough investigation," said Stewart attorney Robert Morvillo. "I'm glad that the political aspects of this matter will now terminate and am confident that the investigation will lead to Ms. Stewart's exoneration."

At the Justice Department, spokesman Mark Corallo said the agency will review the lawmakers' letter.

Stewart is a friend of former ImClone chief executive Sam Waksal, the only person so far charged in the federal investigation of ImClone Systems Inc., which he founded. He pleaded innocent last month to charges of securities fraud, perjury, bank fraud and obstruction of justice.