Santa Maria, Calif. – Michael Jackson had a deteriorating financial condition for years that left him with just $38,000 in cash when he had to cope with an avalanche of bad publicity, jurors at the star’s molestation trial heard Tuesday.
John Duross O’Bryan, a forensic accountant testifying as an expert witness for the prosecution, painted a grim picture of Jackson’s finances, estimating that from 1999 to early 2003, the pop singer spent $20 million to $30 million a year more than was coming in.
The prosecution maintains that financial pressures led the Jackson camp to conspire to control the family of the boy who has accused Jackson of molestation.
O’Bryan’s testimony came after the lead investigator took the stand to impeach last week’s testimony by Debbie Rowe, who glowingly praised Jackson, her ex-husband.
The investigator, Sgt. Steve Robel of the Santa Barbara Sheriff’s Department, said the woman had described the singer as a “sociopath” who called his children “his possessions.”
The prosecution is trying to tie up loose ends in the last days of presenting its case, and one of those untamed threads is Rowe, the mother of two of Jackson’s children. Rowe testified last week as a prosecution witness, but her testimonial of Jackson was so glowing that she seemed to be a defense witness.
O’Bryan was given access to reports by Jackson’s consultants from 1999 to Feb. 13, 2003. On Feb. 6, 2003, a British documentary was broadcast in the United States showing Jackson holding hands with the boy who later accused the pop star of molestation. Jackson on that video said he slept with children, but in a nonsexual manner.
O’Bryan said Jackson owed vendors $10.5 million and had just $38,000 in the bank that month.
The documentary set off a flurry of calls among Jackson aides, who launched their own campaign to protect the global singing star, whose sales have been sliding.
The prosecution alleges that Jackson conspired with his aides to pressure the accuser and his family to participate in a video praising the star so that his career would be protected.
O’Bryan said that a June 2002 balance sheet prepared by Jackson’s accountants showed he had a negative net worth of $285 million – that is, the sum of all of his many assets, including interest in two music catalogs and his Neverland ranch, was worth $285 million less than his outstanding liabilities.
O’Bryan cautioned that the number was an estimate because values constantly change.
Among Jackson’s prized possessions are the music catalogs. One is mainly of his music, and the other is his partnership with Sony/ATV for the songs of superstars including Elvis Presley and the Beatles.
Jackson owed about $270 million to the Bank of America for his share of the music, O’Bryan said.
About $18 million of one loan is also backed by the use of Neverland as collateral, he said.
Defense attorney Thomas A. Mesereau Jr. minimized Jackson’s degree of financial jeopardy. In his cross-examination, Mesereau estimated the value of the music at as much as $4 billion to $5 billion.
O’Bryan said Jackson consultants estimated the value of the Sony/ATV catalog at $1 billion. He said his analysis showed that Jackson’s portion was worth about $200 million and Sony’s about $800 million because Sony continued to put artists’ work into the catalog.
Jackson also would face a tax liability of between $40 million and $60 million if his interests were sold, he testified.
Mesereau pressed O’Bryan on whether the liquidity crisis was as desperate as the accountant testified.
“That liquidity crisis was real,” O’Bryan replied. “If it could have been solved, why wasn’t it?”
Mesereau again asked, if Jackson’s financial situation was really so dire, why wasn’t the singer forced into bankruptcy?
“He was able to continue to borrow,” O’Bryan said.
Earlier, the focus was on Rowe. Sgt. Robel, who listened to Rowe last week, was called to impeach her testimony and to re-establish the prosecution’s credibility with jurors.
Jackson, 46, is charged with molesting a 13-year-old boy in early 2003 and with giving him alcohol to aid in the commission of a felony. Jackson also is accused of conspiring with aides to control the accuser and his family.
