- The Washington Times - Tuesday, May 3, 2005

SANTA MARIA, Calif. (AP) — 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 accusations in the case.

The testimony came as the prosecution neared the end of its case.

Mr. Jackson, 46, is accused of molesting a 13-year-old boy at his Neverland ranch in February or March 2003, giving him alcohol and conspiring to hold the accuser’s family captive to get them to rebut a damaging documentary about the pop star.

The detailed analysis of Mr. 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 witness reached his conclusions.

Under questioning by Deputy District Attorney Gordon Auchincloss, forensic accountant John Duross O’Bryan traced Mr. 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 Mr. 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 have higher actual values. “There was an ongoing cash crisis, not enough cash to pay bills,” Mr. Duross O’Bryan testified.

He said he formed his opinions by reading through boxes of memos exchanged by Mr. Jackson’s financial managers over the years, and he told of a warning to Mr. Jackson that if his overspending continued he might be forced to sell off his two greatest assets, the catalog of his songs and the Sony-ATV catalog that contains rights to the works of numerous other artists, including the Beatles.

But the witness said that even selling the catalogs would be problematic because that would incur a huge tax liability.

The testimony was offered to show that Mr. 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 nonsexual.

Prosecutors are trying to show that Mr. Jackson had banked on the documentary as a way to re-energize his career and that it backfired. 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.

The accountant testified that he was aware Mr. Jackson negotiated with the Fox network to get $7 million for the rebuttal video.

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