AEG exec testifies he never checked Jackson’s budget

A ranking AEG executive testified Tuesday at the Michael Jackson wrongful death trial that he didn’t pay attention to the tour budgets that he approved, even though he was the tour manager.

Paul Gongaware said he didn’t read through the budgets, instead trusting that the tour accountant for Jackson’s planned comeback concert series “knew what he was talking about.”

A defendant in the civil suit filed against AEG by Jackson’s mother and three children, Gongaware testified that Dr. Conrad Murray’s salary, although included in the company’s budget for several months, wasn’t something he saw as an actual payment that would be made.

“If there’s a potential for cost we put it in our budget so there are no surprises later,” he said.

The civil trial that began more than four weeks ago hinges on whether it was Jackson or AEG who controlled Murray, now serving time for involuntary manslaughter after giving the singer a fatal dose of the anesthetic propofol.

Gongaware said he spoke on the phone twice with Murray. The first time, the doctor requested $5 million to join the “This Is It” tour as Jackson’s physician. The second time, Murray agreed to a salary of $150,000 a month, which was a figure suggested by Jackson.

“He started in saying that he wanted more and I said that offer came directly from the artist and he immediately accepted,” Gongaware said of their second phone conversation.

He added: “It wasn’t a done deal. We agreed on what the compensation would be, but there was still a lot of open issues that had to be resolved.”

Gongaware testified that he asked a doctor friend how much he would charge to do the same job. The friend said $10,000 a week.

Gongaware said although AEG never did a background check on Murray, in his view they had “checked out” the doctor according to their standard practices.

“When we check out someone, we either rely on if we know the person or if they’re known in the industry or if they’re recommended by the artist,” he said. “And in this case, Dr. Murray was recommended by the artist — in fact, the artist insisted.”

The Jackson family’s attorney pressed Gongaware. “You did nothing to verify anything about Dr. Murray, isn’t that true, sir?” Brian Panish asked.

“Well, Michael Jackson insisted on him, recommended him and that was good enough for me,” Gongaware replied. “It’s not up to me to tell Michael Jackson who his doctor should be.”

Panish asked: “You could have told Dr. Murray at any time that his services were no longer needed, couldn’t you?”

“No,” Gongaware replied.

Panish then pointed out that the AEG executive had fired Jackson’s nanny after being asked to do so by the singer’s aide.

Gongaware said he attended a meeting at Jackson’s Holmby Hills home in June 2009 with other AEG executives; Frank Dileo, Jackson’s manager; and Murray. Gongaware said the hourlong meeting was not about Jackson missing rehearsals, but about “whether Dr. Murray and Michael had everything they needed to take care of Michael’s health.”

Jurors were later shown a police summary of the meeting.

“The topic of the meeting was Jackson’s overall health, i.e., diet, stamina and his weight,” the document read. “Jackson had missed a rehearsal and was thought to be dancing at home. However they discovered he was only watching video. Doctor Murray was receptive to their concerns and indicated he would take care of the situation.”

Gongaware said in a separate meeting with Jackson, the singer had slurred speech and “was a little bit off.... I believe he was under the influence of something because he wasn’t quite right.”

Gongaware testified that landing Jackson, whom he felt was the biggest artist of his era, was huge for AEG.

In a 2008 email to AEG Live President and Chief Executive Randy Phillips, Gongaware described how the company should approach Jackson and his manager about a possible comeback tour.

“We need to start at the fundamentals. How we do it. The difference between [Live Nation] and us is huge. We are artist-based, they are Wall Street-driven,” Gongaware wrote.

“We are smart people. We are completely honest and transparent with everything we do. That’s how [founder] Phil [Anschutz] wants it.”

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corina.knoll@latimes.com

jeff.gottlieb@latimes.com