Bush's electoral fortunes have much to gain from criminal cases involving the great and the good, writes Conor O'Clery.
It's not just the primary season that is upon us in this election year in America, but show time in the courts. If 2003 was the year of malfeasance, 2004 is the year of comeuppance. Executives are being hauled before the bench on a timetable almost as crowded as the Democratic party primaries.
On Monday this week the process began of selecting a jury for the January 20th trial in Manhattan of domestic diva Martha Stewart, who is charged with securities fraud and obstruction of justice. On February 4th Scott Sullivan, former chief financial officer of WorldCom, will face trial for lying, conspiracy and securities fraud in the same courthouse. He will be followed on February 9th by John Rigas, the elderly founder of Adelphia Communications, who, with his two sons, is accused of looting $1 billion from his company.
The list stretches on towards the summer and the party conventions. On February 23rd two executives of CUC International, Walter Forbes and Kirk Shelton, will face charges of accounting fraud that cost investors $19 billion; on March 22nd former Credit Suisse First Boston analyst Frank P. Quattrone returns to court after a hung jury to be tried again for obstruction of justice.
Without question the greatest number of TV cameras will be focused on Martha Stewart, whose criminal charges arise from an investigation of insider trading. Ms Stewart (61) has made a fortune personifying gracious living through books, a TV show and the million-plus circulation magazine called Martha Stewart Living. She is middle-class America's infallible guide to hors d'oeuvres, pies, curtains, weddings, herb gardens and gift-giving. To some she is a domestic goddess; to others she is unbearable.
So what did Martha do to get into such trouble that she is the subject of what in Wall Street terms amounts to a show trial, with a pool of 500 prospective jurors being asked to fill in a 35-page questionnaire demanding to know if they had ever bought her products or used her recipes in the kitchen or such like.
When on a holiday trip in her private jet on December 7th, 2001, Ms Stewart took advantage of a refuelling stop in San Antonio to call her New York office. She learned that there was a telephone call from her broker in Merrill Lynch, Peter Bacanovic, who also acted for her friend Sam Waksal, head of a biotechnology company called ImClone Systems.
The day before Mr Waksal had learned that the US Food and Drug Administration intended to reject ImClone's major new cancer drug, Erbitux, a blow which would depress share value. The news had not yet been made public.
Martha couldn't get Bacanovic but his assistant Douglas Faneuil advised Stewart that Waksal was selling his ImClone stock. Ms Stewart told Faneuil he had better sell all her 3,928 shares in ImClone, valued then at $230,000. When the stock tanked and the Securities and Exchange Commission later started sniffing around, Martha stated that the transaction was triggered by a standing order to sell if the stock fell below a certain price. Bacanovic swore this was true.
However, Faneuil subsequently admitted to prosecutors there was no such agreement and that Bacanovic had bribed him with free airline tickets to lie.
The SEC also found that Ms Stewart changed an entry in her telephone log from "Peter Bacanovic thinks ImClone is going to start trading downward" to "Peter Bacanovic re: ImClone", but she subsequently changed it back again.
Insider trading is as old as the stock market, though laws to curb common abuses were not introduced until after the crash of 1929. It is today a crime for a CEO to give a tip to a friend about something only he or she knows which could affect the company's share price. But titbits of insider information flow back and forth on golf courses and in bars and there is little that the SEC can do about it, unless the act is so egregious that it becomes a public scandal.
Many people in corporate America might look at the Martha Stewart case and think, "there but for the grace of God go I" - even the President himself. George Bush made a lot of money in 1990 by selling his stock in Harken Energy Corporation in Texas just before it plummeted in value.
At the time he was serving on Harken's board and on an audit committee looking at the company's financial health. He sold $850,560 worth of stock and failed to report the sale within a required space of time to the SEC. The SEC investigated Mr Bush for the stock sales but the SEC chairman, Richard Breeden, who had been appointed by the-then president, George Bush snr, took no action (four years later Breeden's firm of Baker Botts became the president's number 14 financial patron, just behind Arthur Andersen).
As George W. Bush said in 2002, "In the corporate world, sometimes things aren't exactly black and white when it comes to accounting procedures." He was referring to a specific charge of malfeasance - or "malfeeance" as he called it - against Harken over a bogus sale of a subsidiary to insiders to hide losses which resulted in a 1989 SEC review.
In the wake of the Enron, WorldCom, Tyco and other scandals that outraged America there is less tolerance now for corporate shenanigans.
That's not to say they have gone away: in recent weeks we have had a series of scandals at Boeing involving the theft of corporate secrets and funny business with government officials, and a scandal in Mutual funds where big-time money managers have been ripping off small investors. But shareholders have become more assertive, and the courts tougher. Sam Waksal has already been given seven years in prison and a $3 million fine for insider-trading, a sentence that US Attorney Jim Comey said "shows that corporate crooks will serve real jail time".
After mulling over the Martha Stewart case for 16 months, the SEC levelled charges against the celebrity not of insider trading but securities fraud and obstruction of justice. She is said to have lied to the FBI and claimed to be innocent in order to keep her company's stock price up. She has already paid a high price. She has had to step down as chairman and CEO of Martha Stewart Living Omnimedia Inc and has seen her company's stock price plunging 45 per cent. She has become a national figure of fun. Cartoonists like to show her in a jail cell decorated with chintz curtains.
A prison term for Martha Stewart would not upset Washington very much. It would show voters that things are being done to counter corporate fraud and restore faith in Wall Street. It would bolster the claim Mr Bush makes in his fundraising speeches that his administration is tackling corporate malfeasance.
As the trials continue, other big fish who came to symbolise the greed of the late 1990s could be fried. Tyco International CEO Dennis Kozlowski, with his liking for extravagant parties and outrageous pampering of his secretary-mistress, faces a long stretch on charges of stealing $600 million from his company and its shareholders.
And then there is Kenneth Lay. "Kenny Boy", as the former Enron boss and Bush fund-raiser was known to the president, is the poster boy for corporate callowness. He enriched himself as shareholders were left with worthless certificates. Some 20,000 workers lost their entire life savings in the debacle. Enron was the corporate Watergate.
It was run by people consumed by greed and hubris that collapsed in late 2001 when it became clear it was a giant house of cards, dragging down its accountants, Arthur Andersen.
Kenneth Lay has yet to be charged with anything. He is resisting requests for documentation and files. But he may yet be hauled before a judge. The strategy of prosecutors in the Enron case has been to put pressure on low-level executives to testify against their bosses. On Thursday this week Andrew Fastow, the former Enron chief financial officer, agreed to plead guilty to fraud after reaching a deal that his wife Lea would serve only five months in prison over her role in the accounting fraud. The deal will ensure that Lea is back home to look after their two children before any jail sentence is imposed on her husband, who faces 98 counts of fraud and conspiracy. As the architect of Enron's secret and complicated schemes to inflate profits and hide debt - from which he blatantly skimmed huge sums - Andrew Fastow knows company secrets like no one else.
Fastow is said to be negotiating a plea bargain for jail time and a fine of $20 million (which would still leave him $40 million to the good).
The deal could open the way for Mr Fastow to provide information that would implicate former CEO Jeff Skilling and Kenneth Lay.
All this, if it comes to pass, will do Mr Bush no harm electorally. Indeed it is likely to do him good. It would make the case that Kenneth Lay, top fund-raiser for Mr Bush in 2000, has not been "protected" all this time but has in fact been left twisting in the wind. As long as the main figures of Enron remained untouchable, the more vulnerable the president would be to charges of shielding political patrons. Nothing Martha Stewart did compares with the breathtaking enormity of the wrongdoing at Enron.
If the former Enron bosses serve "real jail time" it will convince a still-sceptical American public that the Bush administration is serious about corporate malfeasance. If not, they can be distracted by the all-channel, front-page show-time trial in which Martha Stewart is currently starring.