MARTHA HOLDS OUT A HELPING HAND

As her sentencing date approaches, Martha Stewart is searching for a way to stay out of jail--or at least get out of jail early. NEWSWEEK has learned that Stewart will seek to serve all or part of her sentence helping underprivileged women start their own businesses. She recently approached the Women's Venture Fund, a New York nonprofit, offering to work 20 hours a week teaching low-income and minority women to become entrepreneurs. She even created her own curriculum to teach the art and science of cleaning. "Can you imagine if we had graduates of the Martha Stewart cleaning program bidding for contracts cleaning Hilton Hotels?" WVF president Maria Otero told NEWSWEEK. Sources close to the case confirm Stewart's strategy.

Martha faces long odds on transforming a felony conviction into a teachable moment. But she intends to ask U.S. District Judge Miriam Cedarbaum to shorten her jail time so she can work up to 1,000 hours at WVF. Last week Otero wrote a three-page letter explaining how Martha would be a boon to the women seeking to follow her example in business (if not in stock trading). Her lawyers are expected to forward that letter to the judge soon. But first they plan to ask the judge to throw out her convictions for conspiracy, lying to federal agents and obstructing the ImClone stock-scandal investigation. In a filing expected this week, her lawyers will argue that her conviction is tainted by the false testimony of a government witness. That maneuver might postpone her June 17 sentencing, but legal experts doubt it will work. "At the most, the judge might throw out the conspiracy count," says Columbia law professor John Coffee. "But that won't reduce the 10 to 16 months she's facing."

That's why Martha is working hard on what legal pros call an "alternative sentence.'' She called Otero about a month ago to seek a meeting. When she arrived at WVF's offices, she brought along her newly hired "sentencing consultant," Herb Hoelter. Known as the get-out-of-jail guy to the stars, Hoelter has helped shorten sentences for Leona Helmsley and Michael Milken and is reportedly working with Enron execs. For 90 minutes, Martha pitched herself like an eager job applicant. "She had a need to sell herself," says Otero.

Martha's detailed plan called for her to work at WVF 10 to 20 hours a week for one or two years. She would teach classes on how to start and run a business, as well as mentor a handful of women one-on-one. (Martha, after all, built a $250 million company from a small catering outfit.) The cleaning-service idea comes from her own experience of having difficulty finding employees to clean her estates. Martha's proposal overcame Otero's fear of associating with such a controversial figure. "Her conviction has nothing to do with her entrepreneurial skills," says Otero. A Stewart rep declined to comment, and Hoelter didn't respond to an inquiry.

Winning over the judge will be much harder. Judges are handing down stiff sentences to white-collar criminals. "If you give it to Martha Stewart," says Coffee, "then every white-collar defendant from Enron to WorldCom could ask for community service instead of jail." Even Martha is skeptical. "Her view is that the court will give her the harshest sentence possible," says Otero. But while expecting the worst, the meticulous Martha is crafting a softer side that could shorten her stay in the slammer.

MARTHA HOLDS OUT A HELPING HAND | News