Jackson’s Debt Grows by Up to $30 Million a Year, CPA Says

Prosecutors on Tuesday produced an accountant to back their allegation that Michael Jackson was sinking into a multimillion-dollar financial hole, an abyss that would have grown even deeper if he lost control of his young accuser’s family.

A certified public accountant told jurors at Jackson’s child-molestation trial in Santa Barbara County Superior Court that the 46-year-old pop star consistently spends $20 million to $30 million a year more than he brings in. To fill the gap, Jackson has borrowed excessively, J. Duross O’Bryan said. He estimated that the singer’s debt in 2003 totaled $224 million.

The testimony was meant to support the prosecution theory that a British TV documentary in 2003 plunged Jackson into a struggle for survival. His globally telecast admission that he enjoyed nonsexual sleepovers with young boys imperiled his already fragile finances, making him desperate for the family’s appearance in a gushing rebuttal video, according to prosecutors.

To secure the family’s cooperation, prosecutors say, Jackson conspired to hold the family captive on his Neverland ranch in the Santa Ynez Valley. Jackson allegedly began molesting the eldest son, a 13-year-old cancer survivor, the night after the video was taped. The family’s comments were not included in the video that eventually aired on the Fox network.

Nearing the end of their case, prosecutors also put a Santa Barbara County sheriff’s detective on the witness stand to undercut last week’s testimony from Jackson’s ex-wife Deborah Rowe, who unexpectedly spoke glowingly about the singer. The officer, Sgt. Steve Robel, testified that Rowe described Jackson last year as a “sociopath” who viewed their two children as possessions.

On the witness stand, Rowe portrayed Jackson as a good father and his associates as “opportunistic vultures” who manipulated the pop star.

On cross-examination of O’Bryan, Jackson attorney Thomas A. Mesereau Jr. suggested that the accountant was grossly exaggerating Jackson’s difficulties. After all, Mesereau said, Jackson is half-owner of the Sony-ATV music catalog, a collection featuring songs by the Beatles and hundreds of other artists that has an estimated value of $1 billion.

However, that asset isn’t all that it seems, O’Bryan testified. He said Jackson has been steadily borrowing against his holdings in the catalog and has not paid his share of Sony’s continuing investment in it. Even if it fetched $1 billion, the accountant testified, Jackson’s take would come to “probably a couple hundred of million dollars” after he reimbursed Sony.

On top of that, he would have to pay off a $200-million loan from Bank of America securing the catalog and would owe millions in capital gains taxes.

“He’d end up with nothing,” O’Bryan said.

Compounding the problems, the sales of Jackson’s own work have waned, with royalties dropping by about 30% since 1999, the accountant said.

O’Bryan said the singer was mired in “an ongoing cash crisis” in 2003. He said the debt had been years in the making, pointing to a string of warnings from Jackson’s financial advisors dating to 1999.

Jackson created his problems by using a line of credit to pay for his lavish lifestyle, O’Bryan said, ticking off expenses that included $5 million for legal and professional fees in 2000, $5 million for security and the operation of Neverland, $2.5 million for insurance, and $7.5 million for personal expenses.

But Mesereau argued that the catalogs were far more valuable than the accountant indicated. If there was any cash shortage, the attorney said, it was because Jackson may have been waiting for his assets to gain even more value.

Even if Jackson were more than $200 million in debt, Mesereau said, the singer stood to gain only $7 million from the rebuttal video.

“It wouldn’t be worth committing a crime over $7 million, would it?” Mesereau asked.

Prosecutors successfully objected to the question.

The hours of testimony from the accountant came after a comparatively brief appearance by Robel, who recalled a taped interview he conducted with Jackson’s former wife last spring.

In the interview, he said, Rowe told him that the affectionate comments she made about Jackson on the Fox video were false. She told him that she and Jackson had a “plan” when they divorced in 1999 for her to say only positive things about him in public.

After Jackson’s arrest in November 2003, Rowe regained parental rights over the couple’s two children, who had been living exclusively with their father. She is fighting Jackson in court for visitation.