Witness details financial trouble
Traces Jackson's assets, 'cash crisis'
SANTA MARIA, Calif. -- A forensic accountant testified in Michael Jackson's child molestation trial yesterday that the pop star was spending $20 million to $30 million more every year than he earns, a deep financial problem that the prosecution contends underlies conspiracy allegations in the case.
The prosecution also tried to undermine earlier testimony from one of their own witnesses -- Jackson's former wife Deborah Rowe -- by calling an investigator who said the former wife told him last year that the singer was a ''sociopath."
The testimony came as the prosecution neared the end of its case.
The detailed analysis of Jackson's multimillion-dollar empire was brought into the trial over vehement objections from defense attorneys who said it was irrelevant to the case and was based on hearsay statements contained in memos from various financial advisers.
Judge Rodney S. Melville instructed jurors that they were not to consider the accounting figures ''for the truth of the matter" but merely to show how the expert reached his conclusions.
Under questioning by Deputy District Attorney Gordon Auchincloss, forensic accountant John Duross O'Bryan traced Jackson's assets and liabilities from 1999 to 2004.
The witness said he obtained only one balance sheet, from June 30, 2002, and it showed Jackson with a net worth of negative $285 million. He said this included assets of $130 million and liabilities of $415 million.
He said the balance sheet was prepared on a tax basis and assets listed might actually have higher values.
''There was an ongoing cash crisis, not enough cash to pay bills," Duross O'Bryan testified.
He said he formed his opinions by reading through boxes of memos exchanged by Jackson's financial managers over the years, and he told of a warning to Jackson that if his overspending continued he might be forced to sell off his two greatest assets, the catalogue of his own songs and the
But the witness said that even selling the catalogues would be problematic because that would incur a huge tax liability.
On cross-examination, defense attorney Thomas Mesereau Jr. clashed with the accountant, suggesting in several questions that he underestimated the value of Jackson's stake in the Sony-ATV catalog and had not considered lucrative offers available to Jackson as an entertainer.
''Wouldn't it be relevant if you knew Mr. Jackson could accept one opportunity and solve [his liquidity problem] in a day," Mesereau asked.
''If it could be solved, why wasn't it?" the accountant replied.
Duross O'Bryan testified that as of February 2003, the month that a damaging documentary about Jackson aired on television, Jackson had $10.5 million in unpaid vendor invoices and only $38,000 in cash in bank accounts.
He also said Jackson owes
The testimony was offered to show that Jackson was in deep financial trouble when the documentary was aired and brought down a storm of criticism on the star for a statement in which he said he allowed children to sleep in his bed, although he insisted it was non-sexual.
Prosecutors are trying to show that Jackson had banked on the documentary as a way to reenergize his career and that it exploded in his face.
They say he then was frantic and organized efforts at damage control, including recording videos for a program in which his reputation could be salvaged.
