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Nancy Grace
Ken Lay Dies of Heart Attack
Aired July 07, 2006 - 20:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JANE VELEZ-MITCHELL, GUEST HOST: Good evening. I`m Jane Velez-Mitchell filling in tonight for Nancy Grace. The founder, former chairman and CEO of Enron dies at age 64 while vacationing in exclusive Aspen, Colorado. What now for investors who lost millions and will Ken Lay go down in history without a conviction? So many questions tonight as we try to sort out the strange and tragic saga. For the very latest let`s go straight out to Shaheen Pasha, a writer for cnnmoney.com who was in court for the whole trial. Shaheen, what now that Ken Lay is dead?
SHAHEEN PASHA, CNN CORRESPONDENT: Now that the initial disbelief and shock over Ken Lay`s death is subsiding, we are starting to see issues about the money and the assets. We expect that his lawyers are going to go to the judge and ask for an abatement. What that means is that since Ken Lay did not have the ability to appeal his conviction, the judge can say that his conviction and indeed his indictment are expunged which means that he was never convicted. He was never indicted. So without an indictment, without a conviction, it`s going to be very hard for the government to go after the money and the assets that they`ve been trying to get. And just last Friday, they filed a motion trying to seize about $43.5 million from Ken Lay which includes his line of credit that he borrowed from Enron as well as bonuses. And also $1.5 million towards his big posh Houston condo, as well as $6.3 million that he had in a Goldman Sachs account. That is actually going to become available this month. So with his death, it looks like that may not be a possibility.
VELEZ-MITCHELL: Now former prosecutor Pam Hayes, what I don`t understand not being an attorney, is what`s the philosophy behind this because we give people awards after death. We say lovely things about them. So why can`t we keep them to a conviction in death?
PAM HAYES, FORMER PROSECUTOR: Because a conviction requires that you are found guilty by fact fires (ph) and that you are sentenced. It`s only part of the procedure. You have to have both aspects of the case. And if you don`t have one or the other, you cannot have a conviction. Like the young lady was saying, you need to get it abated and that`s what`s going to happen.
VELEZ-MITCHELL: Because he hasn`t done the whole appeals process. Therefore theoretically he could have had his conviction overturned so therefore you can`t say for sure that he would have remained convicted. `Is that the bottom line?
HAYES: Absolutely.
VELEZ-MITCHELL: All right. Let`s talk hear what the coroner had to say about how Ken Lay died.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: There was no evidence of foul play. The postmortem examination revealed that Mr. Lay had severe coronary artery disease. There was evidence he had had a heart attack in the past. The only aspects of the examination that are outstanding at this particular point are toxicology and microscopic analysis of tissues.
(END VIDEO CLIP)
VELEZ-MITCHELL: So much controversy surrounding Ken Lay`s death. But before we go any further, Elly (ph), please tell us about the funeral arrangements.
UNIDENTIFIED FEMALE: Right. They`re going to have a private memorial service for Ken Lay on Sunday there in Aspen. Then on Wednesday, they are going to have another service for him, another memorial in Houston on Wednesday. These are both family and friend only events. Then, now here`s the new thing that we`re finding out. The "Houston Chronicle" is reporting and others sources are picking it up. They are quoting a family source that Ken Lay has asked or his wish was that he was cremated and buried there in Aspen.
VELEZ-MITCHELL: And what I understand (INAUDIBLE) is even in death Ken Lay is causing controversy over this cremation because there are a lot of people who are very suspicious about whether it was really an accident. Or that he may have theoretically committed suicide even though the coroner is saying it was an accident. It was natural cause of death I should say. So what is the controversy over this cremation?
PASHA: Absolutely. Conspiracy theories abound when it comes to this. We are not just talking about that he committed suicide or that it was an accident. We are talking about people theorizing that he is off somewhere in Bermuda and enjoying his millions. There`s a lot of conspiracy theories out there and a lot of people that actually want to see a body which obviously is not going to happen because of the cremation. So basically we have to understand. This is a man that was larger than life before he was the corporate icon. Then he became the corporate villain. So it`s very hard for people to just accept that he was a mere mortal man who was 64 years old and went through a lot of stress in the last few months of his life. So I think that that`s going to continue especially now with this cremation. It`s going to be very hard to have those non-believers actually believe that yes, Ken Lay actually did pass and that now his millions may not be available to investors.
VELEZ-MITCHELL: It`s so astounding to hear that people think he may not have even died, that he may have somehow pulled a fast one on everybody. Let`s go out to Dr. Daniel Spits, forensic pathologist. (INAUDIBLE) It wasn`t a suicide, but essentially what they were saying is he died of natural causes. Can you explain it for us? What exactly do they say he died of?
DR. DANIEL SPITZ, FORENSIC PATHOLOGIST: What he died of was simply coronary artery disease causing a heart attack or a myocardial infarction, with the scientific term. When you have somebody such as Ken Lay die under these circumstances, the conspiracy theories are going to abound. But the bottom line is that there`s no indication that he died of anything other than a natural event. There`s no indication that somebody was directly involved in his death either himself or somebody else. There`s just nothing to indicate that and with the autopsy results showing severe coronary artery disease and the fact that he`s had a previous heart attack and the fact that he`s 64 years old and died very suddenly, everything is pointing to a natural death. And certainly the stress of the last few months and the stress of the trial and what was coming up in the next few months and for the rest of his life likely spending in jail, that was going to play a role in this death as well. Being that stress is a big factor in people`s heart disease.
VELEZ-MITCHELL: And clinical psychologist Dr. Patricia Saunders, his pastor said his heart just gave out. How much can stress contribute to death? In other words, let`s say he wasn`t under this kind of stress and he did have that physical condition. Could stress push him over the top?
PATRICIA SAUNDERS, CLINICAL PSYCHOLOGIST: Easily, Jane. We know far long time there`s a connection between the heart and the brain. And sustained stress for a man like this who would be a textbook type A personality, control and power, the corner stones of his life. It affects the body as well as the mind and it could be enough to push him into a heart attack.
VELEZ-MITCHELL: All right. And we have the phones opening up right now. Dave from Texas, your question, sir?
CALLER: Yeah, Jane. The question I have is with all the creditors coming after the Ken Lay and the family, if there`s any death benefits from an insurance policy. Will they be able to go after that? Or is that going to be like hands off?
VELEZ-MITCHELL: Death benefits from an insurance policy? That`s a very good one. We are going to write that down. Right now, let`s go to the whole money issue. It`s almost hard to figure out whether to start because there`s so much of it out there. Now essentially, I think I should start with Russ Alba who is a corporate and securities attorney. Now let`s assume for a second that Ken Lay`s attorneys get this conviction vacated. The government had been seeking something in the range of $40 million. What happens to that effort to get that money?
RUSS ALBA, CORPORATE SECURITIES ATTY:V Well Jane, the government`s efforts on the criminal side are going to be vacated. They are not going to be effective. But keep in mind that there is a host of civil actions outstanding against Mr. Lay and his death does not change them. They are more than adequate claims to evaporate the entire Lay estate subject to certain laws that protect debtors and for example, with respect to the question about insurance proceeds. In Florida, the proceeds of a life insurance policy are exempt from the claims of creditors. If Mr. Lay had been a Florida resident, those assets would not be available to the creditors.
VELEZ-MITCHELL: Now, let`s talk money again because it is so confusing. And we want to understand it in layman`s terms. Shaheen, during the trial, Ken Lay said he was actually in the red by $250,000. And yet, at one point, his net worth was $400 million. But I understand a lot of that was in Enron stock which obviously plummeted. So where did he really stand in terms of his assets at the time of his death? Because that`ll tell us well, what is everybody going to be looking for?
PASHA: I think that`s an excellent question. Basically right now is what all lawyers are doing. They are going to look at his assets. And you have to keep in mind, he had a very large posh home in Houston which they had wanted to take a part of. He had on this Goldman Sachs account which they also wanted to see. So really right now from the attorneys I`ve spoken to that are involved with the civil litigation, they say that they are now, right now, taking a look at what his assets are and determining what there is. A lot of people feel that he doesn`t really have much left. I mean aside from the $250,000 in debt, he also has a ton of legal bills that he has to pay. So some feel it`s just not in their best interest to go after him and prefer to go after some of the larger banks that were involved with Enron as opposed to the individual man and his family.
VELEZ-MITCHELL: But very cut and dried. He had this Houston condo that was worth approximately what, $5 million. And then he supposedly had about $6.3 million in this limited partnership through Goldman Sachs that was coming due which apparently didn`t he hide that allegedly from the court, that he had this limited partnership?
PASHA: That`s what the government contends. They`re saying that it was something that was maturing this July. So he didn`t have it available when he started testifying. It was actually, only became available as of this month. So that`s something that they are taking a look at.
VELEZ-MITCHELL: A couple of things I didn`t understand. Russ Alba, if he`s only worth about $11 million, why would the government go after $43 million?
ALBA: Obviously the government had a different view of his potential net worth. And you know the position of the Federal prosecutors is to leave a man like Ken Lay broke, homeless and without wheels. So it`s not unlikely, it`s not unusual for them to attack every possible source of assets. And overshooting the mark really doesn`t hurt anybody because they are going to get what`s available. They`ll take all that`s legally available to them.
VELEZ-MITCHELL: And they can even go after a home. In other words, you always see these guys basically going broke in a way. But they always go back to these lavish homes at night.
ALBA: That`s largely a function in our system of state law. Again, certain states in our union are debtor havens and the state of Florida being one, where back in the days of the insider trading scandals, the Michael Milken days. A number of convicted felons bought large homes in Florida in order to be able to be exempt from the claims of their creditors. Even people they defrauded.
VELEZ-MITCHELL: Timothy Noah, a writer with "Slate" magazine. You are looking at this from a sociological perspective. Can you give us the big picture because there`s so many mixed emotions. There`s sadness. There`s rage. There`s even a little tragic-comedy.
TIMOTHY NOAH, SR. WRITER, SLATE MAGAZINE: It`s a remarkable end to the story. I mean here is this guy who was pursued and pursued and pursued in the courts over the spectacular failure of Enron and who was convicted of defrauding. finally convicted of defrauding stock holders. And there was nothing left when he was done. But now there`s no Ken Lay either. The timing is kind of exquisite. And obviously it`s always a terrible thing when somebody dies. But he does seem to have chosen a fairly choice moment to do so.
VELEZ-MITCHELL: Indeed, it`s true. And that`s why everybody is so suspicious because it is such a pivotal moment to die. Charles Presswood, you are a former Enron employee. You consider yourself a victim of Enron. I understand, sir that you lost $1.3 million or thereabouts. Good evening, what was your emotional reaction when you heard that Ken Lay had died?
CHARLES PRESSWOOD, FMR. ENRON EMPLOYEE: Well ma`am, it was kind of hard to believe because I would figure a man of his talent. And I would surely be trying to take care of his health. When I first heard it, I didn`t understand that what type of heart attack he might have had, you know? But then when I found out that it was just from stopped up arteries, it looks to me like he`d of had that taken care of a long time ago. Because apparently, I don`t think that the plaque in your arteries gets there overnight. In other words, he should have had that found and taken care of.
VELEZ-MITCHELL: Well, I`m going to get back to you after our break because you sound a tad suspicious as many are. So stand by.
To tonight`s case alert. A terror plot targeting New York City`s tunnels foiled by U.S. and Lebanese agents. The plot uncovered several months ago through Internet chat rooms. A man being held in Lebanon confesses to the planned attack and two more suspects are in custody abroad. Other suspects appear to be involved. The FBI says there is no imminent threat to the New York transportation system or other places in the U.S.
Also tonight, Britain marks one year since suicide bombings --
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: securing those tunnels and making sure that a truck carrying a large explosive device will not enter the tunnel. So there`s been great efforts in both the New York City law enforcement agencies. New Jersey and the Port Authority individuals assigned to that security to make sure that doesn`t happen.
(END VIDEO CLIP)
VELEZ-MITCHELL: Also tonight. Britain marks one year since suicide bombings in the London underground system. And a bus took the lives of 52 people. Several tributes around Britain today, honoring the memory of victims, including the laying of wreaths, moments of silence and the unveiling of a commemorative plaque.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
PRESSWOOD: I lost $1,310,507 and some few cents.
KEN LAY: I take responsibility for what happened to Enron both good and bad. I firmly believe I`m innocent of the charges against me.
UNIDENTIFIED MALE: The cause of death is coronary artery disease. There was no evidence of foul play.
UNIDENTIFIED FEMALE: I know there had to be a tragic loss for them. You know, he`s a father. He`s a husband.
(END VIDEO CLIP)
VELEZ-MITCHELL: Hi. I`m Jane Velez-Mitchell, in for Nancy Grace. In the wake of the death of former chairman and CEO Ken Lay, what is next in the Enron saga? I want to go straight back out to Charles Presswood who is a former Enron employee, a victim of Enron. You sir, lost approximately $1.3 million. As we went to break, you were expressing what sounded like suspicion over the cause of death, saying, you basically were saying you figured a wealthy man like Ken Lay would have had the clogged arteries taken care of. Is that what you were saying?
PRESSWOOD: Yes, ma`am. That`s exactly --
VELEZ-MITCHELL: What are you saying? Are you saying that you don`t believe that he died of a heart attack?
PRESSWOOD: Yes, ma`am.
VELEZ-MITCHELL: Or heart disease I should say?
PRESSWOOD: You have to go with what the coroner said. And I do believe that. But you know what I mean, I guess I believe in preventive maintenance. You have to have maintenance on the old body, you know to keep things, to find things out. In other words, don`t go to the doctor when you are on your last step, you know?
VELEZ-MITCHELL: Well -- I`m trying to understand whether you are saying that he was showing bad judgment in not taking care of it or that you doubt how he died, if you are a conspiracy theorist.
PRESSWOOD: No ma`am, I`m just showing what I believe is he just showed bad judgment. You know.
VELEZ-MITCHELL: So kind of karmic justice is what you`re talking about here.
PRESSWOOD: Yes, ma`am.
VELEZ-MITCHELL: All right. We got Shawn in Texas. Thank you for coming to the phones. What is your question?
CALLER: My question is basically, why is everyone so quick to just blow off the notion that this man could have possibly faked his own death, fearing the consequences?
VELEZ-MITCHELL: All right. Well that`s what we are talking about tonight. Dr. Daniel Spitz, forensic pathologist, obviously there are people who have their doubts. What would you say? What causes coronary artery disease? How do you get it?
SPITZ: You certainly can`t fake coronary artery disease. And you can`t fake any type of heart disease. This is a type of disease that takes years and years to build up. I don`t know Ken Lay`s medical habits and whether he went to the doctor frequently. Many people who have this disease don`t know they have it. As a medical examiner, I deal with this type of situation all the time so it`s a frequent cause of death. It`s nothing he could have faked. And there`s really no way to exacerbate it to help cause your death. I think the only way exacerbating factor is the fact that there was a lot of stress in his life related to his recent trial and upcoming court dates and ultimate prison term.
VELEZ-MITCHELL: Very briefly, is it genetic or is it dietary lifestyle?
SPITZ: There`s a lot of factors involved. Certainly genetics play a large role in it. His children would be smart to take heed of his death at 64 years old and try and do what they can to minimize their factors. But lifestyle and stress and eating habits and basic health are all part of the factors that result in type of coronary artery disease.
VELEZ-MITCHELL: All right, to trial tracking. A Florida judge throws out more evidence in the upcoming trial of a 47-year-old man charged in the death of nine-year-old Jessica Lunsford. A jury will not hear about 1978 assault allegations against John Couey. At the time, Couey was accused of burglarizing the central Florida home of a 12-year-old girl he allegedly battered. The same judge threw out Couey`s confession in the Lunsford case because he repeatedly asked for an attorney during interrogation.
Also tonight, bond set at $750,000 for a Tennessee minister`s wife accused in the shooting death of her husband. Mary Winkler, facing first degree murder, told police the March 22nd shooting happened after an argument over finances and other family matters. If Winkler cannot post bond, she will remain behind bars until her trial starts this October.
(COMMERCIAL BREAK)
UNIDENTIFIED MALE: We completed the postmortem examination this morning and the cause of death is coronary artery disease. And there isn`t any other particular information that we are releasing at this particular time. Any other additional information would come from the (INAUDIBLE) County coroner and from the sheriff`s office.
(END VIDEO CLIP)
VELEZ-MITCHELL: I`m Jane Velez-Mitchell, in for Nancy Grace tonight. As the family of Enron`s Ken Lay makes funeral arrangements, what are the repercussions of his death? Let`s go straight out to defense attorney Courtney Anderson. We want to ask you about the civil cases now that it appears that this conviction is going to be thrown out. You have former employees. You have former stock holders. Is it going to make it harder for them to win in a civil trial without a conviction in a criminal case?
COURTNEY ANDERSON: Yeah. I mean absolutely. Obviously if you had a criminal conviction, you can go into court and you can say look, here`s a large amount of proof that this person engaged in some sort of illegal activity that we are going to use as the basis for our civil action. It certainly would help them. I do want to mention here in Texas we do have as the other gentleman was saying the homestead exemptions here that are very popular which basically says in most cases that your primary homestead property can be almost unlimited in value. Which would explain why you were asking how can he have this fantastic Houston mansion, I guess by some standards as an apartment and still be broke? It`s because of some of our state laws are pretty friendly.
VELEZ-MITCHELL: And that`s also going to apply to Jeffrey Skilling, right because I`ve seen his house and it`s pretty big.
ANDERSON: Absolutely. I mean Florida, Texas, beautiful states. Wonderful weather, nice people but also have some very friendly laws that help you if you are in a bankruptcy or civil judgment situation for homestead protection. So I certainly think the civil cases are going to go forward. They`re going to go forward very aggressively. Just because someone passes on, we all know, doesn`t mean that your legal problems necessarily end. The challenge is going to be how much money is going to be left over in Mr. Lay`s estate? Is there going to be anything left over? Or was it all passed through contract like insurance policies and through trusts which are outside of his estate and outside the arm of creditors?
VELEZ-MITCHELL: Shaheen Pasha, cnnmoney.com writer. Enron had grown into the nation`s seventh largest company before it imploded. Has this sent a shock wave through corporate America? Is corporate America really changing how it does business?
PASHA: You`d like to think so. At this point I can definitely say we are a little better off than we were a few years ago. But I mean just five years later, there`s already talk of changing Sarbanes-Oxley. It seems like in some cases people feel that we went too far.
(COMMERCIAL BREAK)
VELEZ-MITCHELL: I`m Jane Velez-Mitchell, sitting in for Nancy Grace. Pop star Michael Jackson on the defense in a civil lawsuit in Santa Monica, California. We will play clips from Michael Jackson`s video-taped deposition for you tonight. The question, will it convince jurists he does not owe his former business associate more than $1.5 million. Let`s go straight out to "Inside Edition`s chief correspondent Jim Moret who was in court today. Jim what is the latest?
JIM MORET, CHIEF CORRESPONDENT, INSIDE EDITION: You know I was afraid you were going to come to me first. Basically what`s happened is, Marc Schaffel a former business associate of Michael Jackson`s. He`s suing Michael Jackson first for 3.8 million, that number has now been reduced to $1.6 million for unpaid receipts and various work he did. The reason the amount has been reduced and it`s been reduced in the last 24 hours is because apparently Marc Schaffel didn`t keep enough receipts to support the claim of $3.8 million owing. Basically the plaintiff`s case has rested today and the defense case is beginning. So Michael Jackson`s lawyers will get to now take the helm and produce their witnesses to say that in fact Michael Jackson not only does not owe Marc Schaffel money, but they came Schaffel owes him money.
VELEZ-MITCHELL: So it could boomerang on them. Now there are some aptly fascinating clips from the deposition that Michael Jackson gave last fall in London. It starts out with a rather dramatic encounter. Let`s take a look.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: First thing I`m going to do Mr. Jackson is let the record reflect that I`m going to hand you a subpoena requiring your attendance in trial next month in Los Angeles.
Okay. Just for the record Michael just so you know, that subpoena is ineffective.
MICHAEL JACKSON: OK, I know.
That doesn`t mean a thing. That`s just (INAUDIBLE) trying to intimidate you and throw you off. It`s the sort of thing he does. You can take this and just tear it up.
Let the record reflect that Mr. Mendell has torn up the trial subpoena I just served.
That`s right.
Where is your place of residence?
Now Bahrain.
(END OF VIDEO CLIP)
VELEZ-MITCHELL: Now this looks like something more out of a TV show or a reality show like "Punk`d" than it does a deposition. We`re going to go right out to Howard King, Marc Schaffel`s attorney, the man who is suing Jackson. I believe you were the voice there that says here`s the subpoena. Just paint a picture of what it was like, a surreal moment to hand Michael Jackson a subpoena and then have his attorney rip it up?
HOWARD KING, MARC SCHAFFEL`S ATTORNEY: Listen, lawyers do that at the beginning of depositions to try to prove who`s the biggest dog, so, we`ll see who`s the biggest dog later. But yet it was surreal. We`re sitting in a luxury suite in London and he`s there. And you know, I want him to know, just like the jury`s going to hear over and over again, you know he should be here in Santa Monica.
VELEZ-MITCHELL: And why were you not able to ultimately get him to appear in person? Because in a civil suit, theoretically, if you ask somebody, subpoena them to appear, they are supposed to appear.
KING: Well it depends on whether or not he`s a California resident. If he`s truly not a resident, he doesn`t have to honor a subpoena.
VELEZ-MITCHELL: Alright. Well that`s why we have Jackson Family attorney Brian Oxman with us tonight. Who by the way is also being called as a witness in this case. Brian, why did Michael Jackson not want to appear in Santa Monica to set the record straight, if he feels he`s done nothing wrong? Was it simply that he didn`t want to take a trip from Bahrain where he apparently was at the time, living most of the time, to Santa Monica?
BRIAN OXMAN, JACKSON FAMILY ATTORNEY: Jane, this is an accounting case. And this involves accountants. It involves checks, receipts, documents, none of which Michael really had any dealings with during the course of his time when all this took place. So his contribution to this particular matter is really very limited. And I think that`s what came out in court today. He is not the one who can tell you what happened in this case, the documents and the accounts tell you what happened in this case.
VELEZ-MITCHELL: And by the way, while we have you there, let`s try to pin you down. Where is Michael Jackson as we speak? We`ve heard that he`s shown up in Paris, we`ve heard Ireland. And that he might be moving to Europe, permanently?
OXMAN: Well the last we heard he was in Ireland and he was enjoying himself there.
VELEZ-MITCHELL: Doing what?
OXMAN: Michael just goes from place to place as he sees fit. And he does his business and meets with people as he wants to.
VELEZ-MITCHELL: Alright. But I mean was he doing an Irish jig? Was he meeting with Bob Dylan? What was going on there?
OXMAN: There was lots of discussion of him meeting with Bob Dylan. And we really don`t know whether that took place. Hadn`t heard.
VELEZ-MITCHELL: Alright. As always, a mystery. Let`s hear and see what Michael Jackson said during his deposition about this much-discussed charity album. Or charity project. What more can I give?
(BEGIN VIDEO CLIP)
Did you direct somebody to make sure that since you were disassociating from Marc Schaffel that you wanted to do it in a kind and humane matter? Manner that somebody make sure that Mr. Schaffel was reimbursed for whatever expenses he had laid out on the song "What More Can I Give"?
JACKSON: At the time, I remember juggling probably 200 different compositions in my head. Writing them, working in the middle of an album. Also visualizing short films for each song. And something like this to just be my main focus of attention, I can`t imagine, no.
(END OF VIDEO CLIP)
VELEZ-MITCHELL: Jim Moret, what is the reaction these tapes had in court? What`s the reaction of the jurors and those in the gallery?
MORET: Well sitting in this morning, one thing that struck me and Howard King did a very good job with this I thought. And that was the fact that he would ask Michael Jackson in the series of these depositions about various business relationships that he had. And Michael Jackson would invariably say he didn`t recall. And then a document would be produced and so forth. What struck me specifically about this charity project was the fact that in the deposition, Michael Jackson seemed to be saying he didn`t even know what the charity was. He just knew it was for charity. And so it would be for the good of mankind or for public awareness.
You know some things just don`t seem to make sense. Yes, we know Michael Jackson is very creative. Maybe he`s disassociated with certain business affairs on a day-to-day basis. But there would be things that would be brought up, for example, a million-dollar loan. A $2 million loan. Michael Jackson simply wouldn`t have any recollection of. And I think that for the jurors, you know, those of us who work on a normal job, that`s a lot of money. It`s hard to imagine not remembering that stuff.
VELEZ-MITCHELL: Psychologist Patricia Saunders, doesn`t Michael Jackson operate at another level? He`s an artist. He`s working subliminally. I think at the time right after he was charged in the criminal case and arraigned, he went out and jumped on his SUV and did a little dance. Which to me was sending a signal to the whole world, don`t take this seriously, it`s a big joke. Look at me, ha ha.
SAUNDERS: Because somebody shows poor judgment or acts in a weird way doesn`t mean that they`re operating in a different world or in a different plane. In fact I doubt that Mr. Jackson was able to juggle 200 compositions in his head. I read the deposition, Jane. And I saw somebody who was extremely intelligent, cagey, and thoughtful. Asking the attorney to define what he meant. Answering in very general and cautious terms. It was impressive.
VELEZ-MITCHELL: Well I agree with you. I think he`s extremely intelligent and cagey. That was precisely my point. He`s very, very cagey. Dawn, Pennsylvania, your question, ma`am?
DAWN: Yes. Michael Jackson is supposedly broke, where would the money come from if Marc Schaffel would win a judgment?
VELEZ-MITCHELL: Well that is an excellent, excellent question because we`ve all been wondering will Marc Schaffel ever see money, Howard King. So many people have sued Michael Jackson and walked away empty handed.
KING: Well, Michael Jackson`s actually extremely wealthy. He has no cash. But the value of his ownership in the Beatles catalog is probably worth $200 million. His real estate holdings are probably worth $20 or $30 million. God knows how many antiques and artifacts he owns. He`s a high net worth individual with no cash.
VELEZ-MITCHELL: It must have been completely surreal for you to do this deposition. When we come back, I want to ask you about what it was like to actually interview and depose Michael Jackson. Stay with us. We`ll be right back.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Did you ever have a cash flow problem in 2003 where you wanted to spend money on something or you needed to spend money on something and didn`t have it?
JACKSON: I`d be guessing, I don`t know. 2003 -- I don`t know.
UNIDENTIFIED MALE: Have you ever had a cash flow problem in your adult life?
JACKSON: I`ve heard of some cash flow problems. But I`m not sure if it was accurate or not.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
VELEZ-MITCHELL: I`m Jane Velez-Mitchell filling in for Nancy Grace. We are talking Michael Jackson who is being sued in a Santa Monica, California courtroom. And he has not appeared in person, rather on videotape via a deposition that was done last fall in London. Now part of the controversy surrounding this case involves the background of the man suing Jackson. That man`s name is Marc Schaffel. Let`s hear what Michael Jackson has to say about that.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: You learned at some point and time about Mr. Schaffel`s background and what you call gay pornography?
JACKSON: Not what I call, that`s what it was.
UNIDENTIFIED MALE: It was gay pornography?
JACKSON: Yes. I was shown a videotape by the lawyer and I was shocked at what I saw. Because I didn`t want to believe when he told me. Then he said well you have to see this. Because I was surprised that he was in that business which he never told me. And it was something that is not appropriate from what I was projecting with my work. So it just didn`t match.
(END VIDEO CLIP)
VELEZ-MITCHELL: Now, by the way for clarification. Brian Oxman, who we`ve been talking to tonight, is a Jackson family attorney. There is another attorney who actually represents Michael Jackson in the Santa Monica courtroom. And he said today, quote, I think Michael came across as sympathetic, credible and the kind of individual who could easily be taken advantage of by somebody like Marc Schaffel. Defense attorney Courtney Anderson, you have been watching and listening to this depo. Do you think Michael Jackson came across as sympathetic?
ANDERSON: I think viewed in light of the case last year, I think yes. I think last year with the resolution of his criminal trial, many people felt that he was taken advantage of by these unscrupulous people who were greedy and out to cause him harm. And I think that this case falls right in line. And I think that the deposition shows that he is busy. Maybe he doesn`t have 200 compositions that he`s working on. But maybe he has 20. And I do think he is a creative person. None of us can deny that we`re here talking about him because of what he has done with the entertainment and the music that he`s brought to the world. That`s true. So he certainly earned his status. I think that this ongoing perception of him is someone who really doesn`t understand the day to day. Who is just from --
VELEZ-MITCHELL: But do you buy that? Do you buy that? He is so smart. How could he not remember multimillion dollar deals?
ANDERSON: Obviously, with the acquittal he had last year, obviously he was taken advantage of by that family. At least that`s what the jury believed. And if that could happen to him in that situation, people came into his home and took advantage of him, then certainly I could believe in a civil jury that this, in a business situation that this person came into his life pretended to be an appropriate associate. And then Mr. Jackson is stunned to find that this man is actually involved in this kind of seedy underworld and doesn`t want to associate with him. So I think in light of the big picture, I think a lot of people are going to believe that yes, he is taken advantage of.
VELEZ-MITCHELL: Marc Schaffel`s attorney Howard King, you conducted the deposition last fall of Michael Jackson. What is it like to question him? Because he is a dancer both literally and metaphorically you might say. I mean he dances around things brilliantly. You have to say that.
KING: Well, listen, it`s like extracting teeth. But after 10 hours, I think I got all the teeth out.
VELEZ-MITCHELL: So you`re -- you think you`ve won? You think you are winning this?
KING: Well, listen, everybody thinks they`re winning their case. I think the case is going very well. I think what the jury heard today was a very cagey individual who signed document after document. And I just don`t think they`re buying that he`s some idiot savant who doesn`t know what`s going on. Especially after they heard 20 telephone messages that he left that were very lucid.
VELEZ-MITCHELL: But he`s very careful in these telephone messages to say, hey Marc Schaffel, don`t give me your money. Just give me money. Give me seven, give me ten. He doesn`t say Marc, I`d like to borrow some money from you.
KING: Well listen, there`s no claims in the case any longer for borrowed money. I mean the cash that Marc Schaffel delivered, he`s out. He should have got a receipt, he`s an idiot. But he`s owed money.
VELEZ-MITCHELL: You`re calling your own client an idiot?
KING: He called himself an idiot on the stand for trusting Michael Jackson and not getting receipts.
VELEZ-MITCHELL: Well, we have a full screen graphic of the money that he says he is owed by Michael Jackson. Maybe we can put it up. We don`t want to get too technical here. But let`s go over it very quickly. $675,000 for the rebuttal documentaries. $340,000 for two cars delivered. $300,000 for loans to Jackson which is what we can`t talk about I guess. $200,000 for various expenses totaling $1.6 million. Now you`re saying that he doesn`t really have documentation for any of this? Because if I were to do a job, let`s say, for somebody to do a documentary on a rebuttal, I would get a contract to say hey, I`m going to do this and this is how much I`m going to be paid at XYZ dates.
KING: No, he absolutely has a contract for all of that money. He has a specific contract signed by Michael Jackson for that FOX documentary. The jury has seen it. And the only defense is going to be gee, you know, he was in mars, he didn`t know what he was signing.
VELEZ-MITCHELL: Or there were no receipts I guess, there were no cancelled checks. So he could say hey, here`s when I paid your client.
KING: Well he can`t show he paid. In fact they acknowledge he never paid that money.
VELEZ-MITCHELL: Alright so Jim Moret, chief correspondent, "Inside Edition." You`ve covered Michael Jackson for many years, you were in court today. Can you try to give us the big picture here? Because we don`t want to nitpick about every little item on this ledger. But we`re trying to get a sense of A, who`s winning. And what this whole money debate comes down to.
MORET: Look, I`ve been a lawyer long enough and a reporter long enough. It`s very difficult to give a scorecard on a day-to-day basis. It generally isn`t worth much because you know things can change quickly. I do want to bring up one point. You played that part of the deposition where Michael Jackson said he was appalled then he discovered that Marc Schaffel was in adult entertainment. And he wanted to severe all of his relationship and business with him at that point. The problem is, and it was pointed out in the deposition, that was in 2001. But in 2003 is when the rebuttal documentary, the rebuttal was made. So, you know, there`s a two-year lapse there.
Michael Jackson apparently was doing business with him long after he learned about Marc Schaffel`s past. So I think that argument is really difficult to fly with the jurors. When you really come down to it, a lot of it comes down to credibility. Who are they going to believe? Are there receipts? Sure, there are no receipts for some of the things. But if the jurors ultimately believe that Marc Schaffel is owed money, then he could win.
VELEZ-MITCHELL: Well you make a very good point. If you had somebody fired in 2001 because they were a gay porn producer, why are they working for you in 2003 and you`re leaving a whole series of voice mails on their answering machine asking them for money? I would think that that might resonate with the jury, but with Jackson juries, you can never tell, right Jim?
MORET: You can never tell. I mean many of us thought with the case last year that it could go either way. But we were frankly stunned that it went so dramatically in one direction. You can certainly analyze it in retrospect. But it`s very difficult going into a case and going forward to know what`s going to happen. This is a jury. These are 12 men and women. And they are going to go by their gut. They`re going to go by the facts that are delivered in the case. It`s just hard to predict.
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VELEZ-MITCHELL: What a week in America`s courtrooms. Take a look at the stories and more important, the people who touched all our lives.
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If she trusted him and she wasn`t afraid of him, she would do that. But if she lived in fear of him, she might have felt that she couldn`t express that horrible thing that she did to her husband. Can this kind of a money problem even, let`s say its involving $17,500, drive somebody to murder their husband?
I don`t know what it takes for you to murder your husband.
GRACE: It must have been very, very difficult for those three children to visit their mother in jail, see her behind bars, knowing that their father is gone. A registered sex offender named a suspect in the death of a 16-year-old Utah girl. What exactly happened to Samantha?
Mr. White has a 16-year-old son and it was through his 16-year-old son that he met Samantha.
There are some indications they may have had some kind of long-term thing going on. I guess the big question is how do you think the girl died? Was she assaulted? What his original charge ten years ago, lewdness with a child involved, according to authorities. He put holes in the wall between his apartment and the adjoining apartment so he could watch minor girls in their bedroom. And he also admitted going into an apartment where minor girls lived and stealing their underwear.
Of course we`re talking Michael Jackson who is back in the spotlight. Over what else? A lawsuit filed by a former business associate who says the king of pop owes him almost $4 million. Now it`s down to about $1.5 million.
It`s already a slime fest. And the only defense to Marc Schaffel`s claim so far have been that he`s an adult film producer. Or as Michael Jackson`s people like to call him, a gay porn producer.
It`s the ongoing saga that keeps getting more and more bizarre.
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VELEZ-MITCHELL: Tonight, we remember marine corporal Pablo V. Mayorga, an American hero. Mayorga, just 33, killed in Iraq. Mayorga hails from Margate, Florida, and received several medals for his service, including a purple heart. A family man, Mayorga leaves behind his grieving widow, two daughters and two stepdaughters. Mayorga and his wife were expecting their first son. Pablo V. Mayorga, an American hero.
We`d like to thank all of our guests tonight for their insight. Thanks to you at home for helping us track these very important cases with us. Nancy will be back here Monday night 8:00 sharp eastern. Until then, have a terrific weekend.
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