More Head Wind for Martha: As Investigators Run out of Patience, the Diva of Domesticity May Be Ordered to Testify in Washington

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Byline: Keith Naughton

Even when Martha Stewart cooperates with the insider-trading probe that's dogged her all summer, she still manages to appear less than forthcoming. Last week her lawyers delivered more than 1,000 pages of e-mails, phone records and other documents to congressional investigators demanding the domestic diva clear up discrepancies in her story about her ImClone stock sale. Stewart met the deadline for the document dump with an hour to spare. The only problem: investigators couldn't read portions of her documents because they were blacked out. Stewart's people contended the blacked-out sections "had nothing to do with ImClone." But investigators had run out of patience. "Her credibility has been stretched pretty thin," says congressional spokesman Ken Johnson. Late last week Martha's lawyers appeased investigators a bit by returning to Capitol Hill with unedited documents.

Stewart herself may be trudging up to Capitol Hill soon. Congressional investigators, annoyed that she continues to rebuff their requests for an interview, say they are strongly considering compelling the queen of perfection to testify. Investigators tell NEWSWEEK they found no "smoking gun" in Martha's s documents. But they are surprised at the relatively small number of relevant e-mails and they've asked her lawyers to look for more. If they subpoena Stewart, it could come as early as next week, when Congress returns from summer break. In fact, sources tell NEWSWEEK that the congressional committee is already considering specific dates to schedule the hearing. "If she's innocent, then why won't she come before the committee and clear this up?" says Johnson. "There are growing questions in our minds." The biggest question: who's telling the truth about ImClone? Stewart still insists she dumped her ImClone holdings on Dec. 27 because of a prearranged sell order, not because she had inside info that federal regulators would nix ImClone's cancer drug the next day. …