Financial Woes Surround Jackson TV Special : Concert: Charities will receive $100,000 of the estimated $4.5 million raised even though production was billed as a benefit. Producer says cast and crew are still owed about $2 million, and money from ticket sales has been tied up.

The “Jackson Family Honors” NBC-TV show was brutally panned by critics when it aired Feb. 22, but the mishaps on camera were nothing compared to the financial imbroglio unfolding behind the scenes.

Five weeks after the show was taped at the MGM Grand hotel in Las Vegas, the producer says the cast and crew of the 200-member production are still owed about $2 million--with little evidence of money to pay them.

In addition, only $100,000 of the estimated $4.5 million raised from the musical benefit will ever reach charities.

“I’m angry and I’m embarrassed,” said Gary Smith, the Emmy-winning executive producer of the telecast, who said he has received only partial payment on his $400,000 producer fee.

“The Jacksons refuse to pay the money they owe me, and as a result I’m unable to compensate the people I hired to work on the show. The most frustrating part is how arrogant they act about it. In fact, Jermaine (Jackson) has never even called me since the show.”

The financial problems stem in part from the fallout of sexual molestation allegations made against Michael Jackson last summer by a 13-year-old boy. A series of complications resulted, including the loss of corporate sponsorships, debts incurred by postponing and moving the event to Las Vegas, and slow ticket sales. Since the event, financial disputes over possible ticket refunds have tied up concert proceeds, and revenues from foreign broadcast fees are still forthcoming.

Smith and others affiliated with the production also accuse members of the Jackson entourage of running up expenditures on security, wardrobe and limousines in the days leading up to the event.

Various sources said the Jacksons spent at least four times more on room service than the $5,000 going to the Library of Congress’ American Music Program--one of several charities advertised as a beneficiary of the concert’s net proceeds.

“Nobody here has heard a word from the Jacksons since the show,” said Jill Bret, a public affairs officer at the Library of Congress.

Jermaine Jackson, executive producer of the show and president of Jackson Communications Inc., said his family did not waste money from the charity event, but acknowledged that bills are still outstanding.

“All this negative stuff is just being cooked up to take away from the beauty of what took place,” the 39-year-old performer said.

“I’m sick and tired of people picking on the Jacksons. This family did not spend hardly any money in Vegas. I didn’t make one penny off this show and I mean, really, how much can clothing and limousines cost? I’m doing the best I possibly can. These people will get a check as soon as I get paid.”

Regardless of whether the production crew gets paid, the charities--who were promised the show’s net proceeds--will receive no more than $100,000 from Jackson Jubilee, a New Jersey-based nonprofit foundation.

As it stands, St. John’s Hospital in Santa Monica will receive about $50,000 with another $50,000 to be divided between the Northridge Hospital Medical Center, the Library of Congress, the Friends of Conservation, the Red Cross and the Salvation Army, according to officials of the Studio City-based Permanent Charity Committee of the Entertainment Industry, which could receive as much as $15,000.

Despite the lure of it being Michael Jackson’s first formal stage performance since halting his world concert tour, the “Jackson Family Honors” event raised only half the projected $2.2-million ticket gate--even though the price of thousands of mid-level seats were slashed from $350 to $150 after representatives of the pop superstar threatened that he would not appear if the house was not full, sources said.

After the discount failed to stimulate sales, sources said an estimated 3,500 tickets were given to Jackson associates, MGM employees, casino patrons, Nellis Air Force base personnel, charity groups and youth organizations from Las Vegas to Los Angeles at the last minute to fill the arena.

In the fallout, TicketMaster, which handled the sale of tickets for the event, has refused to turn over nearly $500,000 in proceeds after demands for refunds from customers who paid $350 for tickets only to find themselves seated next to people who paid $50 or nothing at all.

The MGM Grand hotel has frozen an additional $400,000 in box office proceeds after encountering similar ticket complaints and also to cover room service charges and labor costs associated with the event.

“When a show doesn’t turn out exactly the way it’s planned, everybody starts pointing fingers,” said real estate attorney Robert Petrallia, chief executive officer of the Iselin, N.J.-based Jackson Communications. “As soon as we have a full accounting of where all the money is, we will pay those whom we owe.”

Sources close to the concerts aid the family cannot possibly take in enough money to pay off the $5.7 million accrued in bills. The production was deeply in the hole before a single performer set foot on stage at the MGM Grand Garden Arena.

The special--originally scheduled to be taped Dec. 11 in Atlantic City and broadcast Jan. 10--lost $2 million in corporate sponsorships and incurred $1 million in debts because of the postponement after Michael Jackson went to Europe to reportedly treat a drug addiction that he said stemmed in part from the 13-year-old’s allegations of sexual molestation.

Jackson Communications secured $2.6 million from NBC for broadcast fees in the United States after moving the show to Las Vegas. But even if the Jacksons collect the $700,000 in outstanding foreign broadcast fees and recover the $900,000 frozen by MGM Grand and TicketMaster, the foundation will come up at least $1.7 million short.

It is unclear where the remaining $1.1 million from NBC went. Sources speculated that Jackson Communications--which collected a $300,000 fee--spent the money on advertising, security, travel arrangements, plus legal and accounting fees and other costs associated with the event.

Some insiders associated with the production have also begun to question the legitimacy of the Jackson nonprofit foundation.

“The Jacksons advertised this concert as a charity benefit, but all they really ended up doing was throw themselves a big lavish party,” said another executive close to the project.

According to the U.S. Securities and Exchange Commission, Petrallia--who organized the event with Jermaine Jackson and his parents--was the target of a 1978 securities fraud investigation and pleaded guilty in 1982 to a tax misdemeanor after being indicted for conspiracy and mail fraud by a New Jersey grand jury.

Petrallia said the Jackson Jubilee was incorporated under New Jersey law Nov. 8, 1993, and that applications were filed for nonprofit status soon after. The Internal Revenue Service, the New Jersey Charities Registration Office and the California Registry of Charitable Trusts have no record of the group.

“I am offended that anyone would try to turn all the work I’ve done for Mrs. Jackson and the Jackson family into something seedy and improper,” Petrallia said. “These allegations are absolutely erroneous.

Jermaine Jackson agreed. “This organization was set up solely to help people,” he said. “We have integrity. We’re going to make good on our promises.”