Jackson trial asks the other burning question: where did his millions go?

Click to follow
The Independent US

Officially, the burning question at the heart of the Michael Jackson trial is whether the 46-year-old performer can be shown beyond reasonable doubt to be a child molester. But a second, equally intriguing set of questions has been eating away at the case from day one. Just how badly does he mismanage his money? And, whether or not he is found guilty, how soon can we expect him to plunge into bankruptcy?

Officially, the burning question at the heart of the Michael Jackson trial is whether the 46-year-old performer can be shown beyond reasonable doubt to be a child molester. But a second, equally intriguing set of questions has been eating away at the case from day one. Just how badly does he mismanage his money? And, whether or not he is found guilty, how soon can we expect him to plunge into bankruptcy?

Over the past three months, we have heard stories from the witness stand of hundreds of thousands of dollars in cash being withdrawn from his bank accounts - for what purpose remains unclear - of debts soaring over the $300m (£160m) mark, of lavish expenditure that far outpaces the star's still considerable earning power, of loans and offshore accounts and emergency bridging loans arranged by his brother Tito.

Last week, one of Jackson's former lawyers, David LeGrand, testified for the defence that he had found almost a million dollars missing from Jackson's accounts early in 2003. According to the defence, the suspicion is that the superstar was being given the runaround by his aides in whom he foolishly placed far too much trust.

According to the prosecution, the money may have been siphoned out of the bank to arrange for the family now accusing Jackson of child sexual abuse to be whisked away to Brazil against their will.

Whatever the case, the casually vanishing million dollars seems to be symptomatic of a wider financial malaise. Mr LeGrand also testified that he found Jackson to be "highly illiquid", with around $10m in outstanding debts in February 2003 against only a few hundred thousand dollars in cash.

A couple of weeks ago, one of the last witnesses for the prosecution, forensic accountant John Duross O'Bryan, said he had examined Jackson's books and found that he was spending $20m-30m more each year than he was earning. With assets totalling $130m and liabilities amounting to some $415m, Mr O'Bryan said the Jackson balance sheet was in a state of "an ongoing cash crisis" relieved only by round after round of further borrowing.

For years, speculation has swirled that Jackson will be forced to sell his remaining 50 per cent share in the Beatles song catalogue. Sony seemed especially interested in the possibility of using the catalogue as collateral after Jackson spent more than $50m of the record company's money in 2001 to produce the underperforming album Invincible.

Jackson had a bad falling out with the then head of Sony Music, Tommy Mottola, whom he described as a racist and a devil. Mr LeGrand testified that he had investigated the possibility that Mr Mottola and others had set up an offshore bank account possibly intended to strip Jackson of his assets - a potentially actionable accusation which he said he was not in a position to substantiate.

But the intriguing wrinkle that has emerged from the trial is that, given the size of his debts as well as the tax liability he would incur, the sale of the Beatles catalogue might not actually put him back in the black. Jackson's lawyer Tom Mesereau has challenged Mr O'Bryan, saying he has vastly undervalued the Beatles catalogue. But the accountant insisted that if Jackson sold both the Beatles' songs and the rights to his own old hits, he might still end up $50m in the hole.

Comments