Using a little-known federal statute (Title 18, Section 1001 of the U.S. Code), federal prosecutors are threatening to send Martha Stewart to jail for lying to government officials and for publicly declaring her innocence of insider trading even though the government refuses to charge her with the actual crime of insider trading. That's outrageous.

Today, the federal government regulates virtually every facet of our lives, and consequently there is hardly a crime conceivable that cannot be swept up in a federal indictment. This includes securities regulations that are so broad and vague that a determined federal prosecutor can literally convict you of making "misleading public statements." This is precisely what federal prosecutors are attempting to do to Stewart. So much for the First Amendment.

Everyone has the right to remain silent when questioned by the police. If police fail to read you your Miranda rights, the courts must exclude from evidence against you statements you made to the police, even a confession.

The rationale for such strict enforcement of the Supreme Court's Miranda

decision rests on the premise that the Fifth Amendment right against self-incrimination is so fundamental to our freedoms that it must be protected against erosion and government encroachment, even at the expense of occasionally allowing obviously guilty defendants to go free on a technicality.

The problem is that this right can only be exercised once you are in the clutches of the government. Before that, if one stands on his constitutional right to silence and refuses to "cooperate" with authorities by not answering a single question or responding to a single allegation in the press, one's reputation can be ruined, his or her business can be destroyed and their lives can be made miserable by unrelenting, harassing government officials who leak harmful stories to the press and business associates.

The natural inclination is to "cooperate" with authorities and answer allegations levied in the press. Gotcha! The minute you open your mouth or allow your attorney to speak on your behalf, not only does the protection of silence go right out the window, you expose yourself to an assault by federal prosecutors who are given virtually limitless powers to intimidate you under Section 1001.

Sitting right alongside the Fifth Amendment and the Supreme Court's interpretation of it in its Miranda decision, Section 1001 makes it a crime to "knowingly and willfully make any materially false, fictitious or fraudulent statement or representation in any matter within the jurisdiction of the executive, legislative or judicial branch of the United States," even if you are not under oath. The sweep of Section 1001 and the unchecked discretion it gives to federal prosecutors are awesome.

Insider-trading regulations are so broad and vague that if someone comes to learn more than others about information relating to a particular firm or industry, then the Securities and Exchange Commission is perfectly able to rule that possessing - and acting upon - that knowledge is a crime. That's why it is impossible to draw a line around what is and isn't permissible under the regulations, which leaves anyone engaged in business open to the arbitrary whim of federal prosecutors. Continued...