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--- Begin Message ----Caveat Lector- Bad fortune http://www.guardian.co.uk/jackson/story/0,15819,1506780,00.html In the mid-80s Michael Jackson was the biggest star in the world, having made the most successful album of all time and amassed a fabulous fortune. This week he was cleared of child abuse charges - but with debts of $270m, his life is in ruins. What went wrong? Oliver Burkeman and David Teather unearth a tale of folly and outlandish excess Wednesday June 15, 2005Guardian On the surface of things, 1998 was an unremarkable year for Michael Jackson - which is to say, of course, that almost any of the things that happened to him would have been interpreted as highly bizarre had they happened to anyone else. He was nominated for the Nobel peace prize. He had a second child with his former dermatologist's nurse. He reached an out-of-court settlement with the Daily Mirror newspaper, which was forced to apologise for having described his face as "hideously disfigured and scarred". Steven Hoefflin, the high-profile Hollywood plastic surgeon alleged to have operated on Jackson's nose, reportedly advised him against further surgery. And across the world, Jackson's die-hard fans flooded nightclubs, including the Equinox on Leicester Square, to celebrate his 40th birthday. But at the Waldorf Towers on East 50th Street in Manhattan that year - according to court documents only reported by the US media years later - something genuinely remarkable did happen. Jackson's attorney, John Branca, whose other clients have included Elton John, the Rolling Stones, Aerosmith and Carlos Santana, reportedly hosted a meeting at his Waldorf suite with Jane Heller, Jackson's personal banker at the Bank of America. The singer was desperate for cash. Fifteen years after releasing Thriller, the bestselling album of all time, he was struggling to meet his bills. Having made out-of- court settlements totalling $25.5m with the families of boys who had accused him of child abuse, he still had to find the $2m annual staff salary budget at his Neverland ranch, along with the $3m extra spent maintaining and guarding its fantastical, and fantastically expensive, equipment and facilities: the zoo, the movie theatre, the fairground, all linked by a miniature train system. And then there were the spending sprees. "I once saw him looking through a magazine and ordering almost everything he saw," a source described as a "frequent Neverland visitor" told the US journalist John Connolly in 2002. "'I want that motorcycle. That bike. This. That ...' It was like one of those shows where the contestant has five minutes to run through a store and fill up as many shopping carts as possible. It was crazy." Hence the Waldorf Towers meeting, and its highly confidential outcome. A loan would be made to Jackson from Bank of America for $140m. It was to be secured against the star's most cherished asset - his half-ownership of the Sony/ATV music catalogue, a massive earner that includes control over 251 Beatles songs such as Yesterday and Hey Jude. The loan was the equivalent of at least seven years' income for Jackson at the time. And yet, by the middle of the following year, his former business manager Myung Ho Lee would later claim, it had been depleted. It was increased to $200m. Jackson was clearly in trouble - and yet not in nearly so much trouble as he finds himself now, even though, two days ago, he was cleared of all child abuse charges in a California courtroom. With the amount he owes now totalling at least $270m, "his finances are in ruins," says Maureen Orth, the Vanity Fair writer who has been investigating Jackson's finances for years. "He would have to go out and be able to earn half a billion dollars in order to clear himself. Otherwise he's going to be forced to give something up." The crunch, exacerbated by an estimated $10m in legal fees, could come at any time. Two months ago, according to the Wall Street Journal, Jackson defaulted on the Bank of America loan to the tune of $300,000. His bank balance was so low, one source was quoted as saying, that he worried about being able to pay his electricity bill. Treating Jackson like any deadbeat, albeit one on a stratospheric scale, Bank of America sold his debt to a New York company, Fortress Investment Group, which specialises in what the financial world euphemistically describes as "distressed" debt. Fortress can now determine Jackson's fate. For a man often portrayed by his defence team as a naive Peter Pan, unaware of the machinations of those around him, Jackson showed an extraordinary shrewdness in the way he first acquired the Beatles catalogue. In 1984, he had been collaborating with Paul McCartney, who mentioned to Jackson his plans to buy the catalogue himself from the Australian businessman Robert Holmes � Court. But before McCartney could make his next move, Jackson telephoned John Branca, his lawyer, and, for $47.5m, the deal was done. The catalogue should have been a source of lasting economic security - but economic security, it turned out, was not to be Jackson's preferred mode of mega- celebrity. Over the next two decades, successive lawsuits brought against him would bring into the public domain the astonishing details of his spending. There were, for example, the extravagant transportation arrangements for the 1987 Bad tour: a bus, a plane and a helicopter had to be available, all at the same time. There was the video for Bad, directed by Martin Scorsese, which cost more than $2m, according to Connolly's investigations. Then there was Neverland itself, purchased for $26m in 1988, not to mention the Rolls-Royce he bought Branca as a thank-you for reaching the deal. Expense reports disclosed during subsequent lawsuits would reveal even more eyebrow-raising reasons for Jackson's financial haemorrhage: a charge of $62,600 from the Mickey Fine Pharmacy, in Beverly Hills; a $150,000 bill, incurred with an audiovisual supplies firm, apparently for equipment allowing Jackson to monitor his own staff at Neverland; a $150,000 shopping spree at Harrods. It was the pressures of expenditure on this scale that led, in 1995, to a complex deal that would come to haunt Jackson, fuelling his increasingly paranoid view of the world beyond Neverland's gates. The singer arranged to merge the Beatles catalogue with part of Sony's, splitting ownership 50/50 between himself and his record label. (If Jackson now tries to sell his stake, Sony has first refusal. Whoever buys, Branca will take home 5%.) The deal set up a tortured double relationship between Jackson and Sony. The firm was now his financial partner - but it was also pumping money into the star's own albums, which were proving less and less successful. Whatever the motive behind Jackson's strange protest in 2002, when he paraded in an open-top bus outside Sony Music's headquarters calling chief executive Tommy Mottola "very, very devilish", it may have had something to do with this. Jackson is not the only one thinking in terms of plots against him. His supporter Jesse Jackson told USA Today that he smelled a rat in the way Bank of America had swiftly offloaded Jackson's debt to Fortress. "Who was forcing the bank's hand and what did they stand to gain?" he asked. "That must come under scrutiny. I think the bank sold the loan rather than face the heat." But Jackson seems to have only ever known one response to financial crisis: he tries to spend himself out of it. He persuaded Sony to invest $51m in Invincible, which was supposed to be his comeback album; he reportedly recorded 84 songs before selecting just 16 to include on the finished product. And then, to burnish his image and help return him to the public eye, he agreed to participate in a documentary presented by a British television journalist called Martin Bashir. The rest of that story is well-known, but still the financial revelations keep coming. A former adviser to Jackson, Marc Schaffel, filed a suit last November claiming that the singer owed him more than $2m in unpaid loans and another $800,000 for work he carried out making two documentaries sold to Fox as a rebuttal to the Bashir film. The suit describes Jackson as "desperate for cash to support his uncontrolled spending habits". Schaffel claims that between 2001 and 2004 he either loaned Jackson directly or paid for business expenses to the tune of $8.6m; Jackson repaid only $6.3m, he alleges. Among the loans and payments he says he made on Jackson's behalf, Schaffel mentions $350,000, to buy a Rolls-Royce Phantom; $380,000 for other luxury cars, including a Bentley, and $600,000 to buy Elizabeth Taylor a piece of jewellery she had picked out in return for allowing Jackson to use footage of her in one of his documentaries. Among other payments, he alleges he gave the singer $250,000 to pay off a Beverly Hills antiques dealer who was threatening to sue for non-payment; $46,000 in August 2001 to cover the costs related to a failed attempt to buy a $30m mansion on Sunset Boulevard; and $500,000 in September 2001 as emergency cash after the terrorist attacks on New York, "in case he needed to take shelter underground somewhere with his family". Jackson is now also understood to be considering a deal to sell Neverland and various rights, perhaps including ringtones of his songs, for $35m, to investors who want to turn the ranch into a theme park. The question now is whether, with no new record contract, he will be able to generate any significant revenues again from the sale of records or tours. Despite his belief that each record will do better than the last, the opposite has held true. His most recent release, the greatest hits collection called Number Ones, has sold just 906,000. The singer last toured in 1997, when his 40 shows grossed between $80m and $90m, according to various reports - making him second only to U2 that year. It is far from clear that he would generate anything like that success if he took to the road again. Nor is it likely that he would be able to find a lucrative sponsor such as Pepsi, who backed him then. "As far as advertisers are concerned, he is completely untouchable," Donny Deutsch, who runs the Madison Avenue advertising agency Deutsch Inc, told the New York Post. "His endorsement days are over. But this country loves a comeback. I think he should lay low for a while and come back with a new album. Right now, all he is seen as is a little weird. A few little public displays of less weirdness would also help him." Guardian Unlimited � Guardian Newspapers Limited 2005~ ~ ~ ~ ~ ~ ~ Alamaine Grand Forks, ND, US of A ------------------------ Yahoo! Groups Sponsor --------------------~--> <FONT COLOR="#000099">Take a look at donorschoose.org, an excellent charitable web site for anyone who cares about public education! </FONT><A HREF="http://us.click.yahoo.com/_OLuKD/8WnJAA/cUmLAA/zgSolB/TM";><B>Click Here!</B></A> --------------------------------------------------------------------~-> www.ctrl.org DECLARATION & DISCLAIMER ========== ctrl is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance�not soap-boxing�please! 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Let us please be civil and as always, Caveat Lector. ======================================================================== Archives Available at: http://www.mail-archive.com/[email protected]/ <A HREF="http://www.mail-archive.com/[email protected]/";>ctrl</A> ======================================================================== To subscribe to Conspiracy Theory Research List[CTRL] send email: SUBSCRIBE CTRL [to:] [EMAIL PROTECTED] To UNsubscribe to Conspiracy Theory Research List[CTRL] send email: SIGNOFF CTRL [to:] [EMAIL PROTECTED] Om
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