Martha Stewart: Taking Friendly Fire

Martha Stewart and Mariana Pasternak were friends for more than 20 years. They spoke on the phone almost every day and lived around the corner from each other in tony Westport, Conn. They went on vacations together, to places like Brazil, Egypt and the Galapagos Islands, where they would laugh that again they had no male company, but at least they had each other.

The friendship was over, however, by the time Pasternak, 50, delivered some of the most damaging testimony yet against Stewart in her trial for allegedly lying to the feds about why she dumped stock of biotech firm ImClone Systems in late 2001. When the two were staying at a luxury resort in Mexico in the days after Stewart sold her shares, Pasternak testified, Stewart confided that she had got rid of them because she knew that ImClone CEO Sam Waksal, their mutual friend, and his daughters had tried to dump their stock. "Isn't it nice to have brokers who tell you those things?" Stewart said, according to Pasternak. Another memorable quote from a memorable trial — until Pasternak, under cross-examination the next day, admitted she wasn't really sure Stewart had said it.

Pasternak — who may have been persuaded to testify after federal investigators quizzed her vascular surgeon ex-husband about selling his ImClone stock the day after Stewart sold hers — appeared cool and unruffled as she ratted on her former friend. Stewart, during the testimony, mostly avoided eye contact and scribbled notes. This week she'll be back in court — without her friend — as the defense makes its case.