Spotlight closes in on media-shy billionaire

Times Staff Writer

Since Philip Anschutz became one of the nation’s youngest billionaires at 42, he has enjoyed a low profile.

The publicity-shy tycoon routinely refuses to talk to reporters, even though he owns daily newspapers in San Francisco, Washington and Baltimore. The last time he sat down for an on-the-record interview was in 1974.

For the record:

12:00 a.m. April 19, 2007 For The Record
Los Angeles Times Thursday April 19, 2007 Home Edition Main News Part A Page 2 National Desk 1 inches; 54 words Type of Material: Correction
Philip Anschutz: An article in the April 5 Business section about the possibility that Denver billionaire Philip Anschutz would testify in a Hollywood breach-of-contract case said the last time he sat down for an on-the-record interview was in 1974. Anschutz granted on-the-record interviews in the 1990s to a Times sportswriter and a Forbes reporter.

Anschutz also prefers to stay out of courthouses, despite spending a small fortune on litigation and attorney fees. The last time he raised his right hand in front of a jury was in 1990.


Now, the 67-year-old Denver resident may be forced to relinquish some of the privacy he has fiercely preserved. He will face intense media coverage and hostile questioning in the next couple of weeks if he takes his turn as star witness in two highly publicized jury trials.

He soon could testify in a Hollywood breach-of-contract case that began in late January in Los Angeles County Superior Court. A production company owned by Anschutz is fighting novelist Clive Cussler over who is to blame for the financial failure of the movie “Sahara.” Both sides are seeking tens of millions of dollars in damages.

In addition, Anschutz could be summoned to U.S. District Court in Denver as a defense witness in the prosecution of Joseph Nacchio, the former chief executive of Qwest Communications International Inc. Nacchio, whom Anschutz handpicked in 1997 to run Qwest, is charged with 42 counts of insider trading.

Even though his name is on witness lists in both cases, Anschutz could avoid appearing in either courtroom.

In the Denver trial, which began two weeks ago, Nacchio’s lawyer said he would call Anschutz as a witness after federal prosecutors finished presenting their case. But a source close to the proceeding said Anschutz might not show up unless he was served with a subpoena.

At the outset of the Los Angeles trial, an Anschutz lawyer told jurors they would hear from the media mogul in court. But his lead counsel now says he is debating whether to risk subjecting Anschutz to cross-examination by Cussler’s side.

“They have not remotely proven their case,” said Marvin Putnam of the O’Melveny & Myers law firm. “We don’t need Mr. Anschutz to prove ours.”

Cussler is represented by Bert Fields, a legendary entertainment lawyer who is regarded as one of the toughest players in Hollywood. If presented with the opportunity to grill Anschutz, Fields said, he will attack the billionaire’s credibility by showing that he previously gave false testimony in depositions.

“There are fundamental, irreconcilable differences on key points between Anschutz and other witnesses,” Fields said. “I intend to show that Anschutz is making things up.”

Putnam accused Fields of seeking to embarrass his client. “Mr. Fields is doing precisely what he has done from the beginning of the case,” Putnam said. “Unable to refute the facts that Clive Cussler committed fraud and breached this contract, he has attempted to divert the jury’s attention.”

Anschutz has emerged in recent years as one of Southern California’s most influential entrepreneurs. He constructed the $400-million Staples Center, assembled the nation’s largest chain of movie theaters, acquired a 30% share of the Lakers and has plunked down $2.5 billion to finance a sports and entertainment district in downtown Los Angeles.

Anschutz’s estimated net worth of $7.8 billion ranks 31st on Forbes’ list of the richest people in America. Yet little is known about his more than 100 companies because nearly all are privately held.

As he built his oil and gas, railroad, telecommunications, real estate and entertainment empire, Anschutz paid handsomely to keep himself out of the limelight.

According to court records in California, Colorado, Wyoming and other states, Anschutz and his firms have provided large cash settlements -- nearly all of them confidential -- to companies that claimed they were denied their fair share of profits or victimized by deceptive business practices.

Anschutz quietly resolved a lawsuit with George Ablah, a Kansas real estate baron who claimed that Anschutz had duped him into investing $14.5 million in a failed oil and gas deal.

The Ablah case led to Anschutz’s last known appearance on the witness stand.

After testifying on July 24, 1990, in Denver district court, Anschutz awoke the next morning to see a photograph of himself leaving the courthouse splashed across the front page of the Denver Post. Rather than take the stand for a second day, Anschutz abruptly ended the trial by striking a deal.

Anschutz agreed to pay Ablah $750,000 in cash and forgive an overdue $2-million promissory note plus $900,000 in interest, according to confidential records obtained by The Times.

A source close to Anschutz said the billionaire was more concerned about protecting his privacy than losing the trial.

In January, Anschutz avoided testifying in San Francisco Superior Court when Qwest reached a $46.5-million settlement with the California State Teachers’ Retirement System. The nation’s third-largest pension fund alleged that Anschutz and Nacchio schemed to falsely inflate the company’s profit.

Anschutz has maintained through a spokesman that he was unaware of any improprieties. He has not commented publicly on what role, if any, he played in Qwest’s downfall.

But Anschutz’s role as Qwest’s founder and then-largest shareholder could attract scrutiny from prosecutors when he testifies as a defense witness in the Denver trial. According to SEC filings, Anschutz sold 58.5 million Qwest shares worth $2 billion from 1998 to May 2001 as the stock price plummeted from $64 in March 2000 to just above $1 in August 2002.

Four former Qwest executives have pleaded guilty to federal charges that include wire fraud, falsifying documents and insider trading. Nacchio is accused of illegally benefiting from the sale of $101 million in Qwest shares before May 2001.

In the Los Angeles trial, jurors have heard Anschutz portrayed as an astute entrepreneur. Last week, Anschutz Film Group Chief Executive David Weil testified that his boss deserved credit for financing acclaimed films such as “Ray,” a biography of singer Ray Charles.

“We are proud of the fact that it was a story that most of the studios were not interested in,” Weil said. “Phil Anschutz felt it was a film worth making. It went on to be a critical success and a financial success.”

Anschutz’s golden touch did not extend to “Sahara,” the action film starring Matthew McConaughey and Penelope Cruz. Based on Cussler’s novel featuring adventurer Dirk Pitt, “Sahara” was released in April 2005. It has lost $105 million.

Cussler sued, claiming that Anschutz’s producers broke a contractual agreement that gave him sweeping approval rights over the screenplay.

Anschutz countersued, alleging that Cussler acted unreasonably and failed to promote the film as promised. Anschutz’s attorneys later added accusations of fraud, claiming that Cussler and his agent grossly exaggerated his book sales.

If Anschutz takes the stand, Fields will confront him about his role during daylong negotiations in June 2000 that led to Cussler’s receiving a $10-million-a-book deal for film rights to Dirk Pitt novels.

In two depositions, Anschutz recalled that he had little involvement in the marathon session, that he did not discuss terms of the agreement and that he secured a promise from Cussler to promote the film during a private meeting.

All of these claims are contradicted by other witnesses, Fields said, adding, “It’s a terrific conflict.”

But Putnam said the argument by Cussler’s attorney was without merit.

“What Mr. Fields is trying to do is attack Mr. Anschutz’s credibility because his memory of unimportant events is somewhat different than other people,” Putnam said. “And the jury is not going to fall for it.”


Times researcher Maloy Moore contributed to this report.