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NANCY GRACE

Investigation Into Michael Jackson`s Death Continues; Discussion of Caylee Anthony Case

Aired July 20, 2009 - 20:00:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


NANCY GRACE, HOST: Breaking news tonight. The mystery surrounding the sudden death of music icon Michael Jackson intensifies, questions mounting as to his sudden death, his half-a-billion-dollar empire, and more important, custody of the star`s three little children. After murder charges leveled in the death of Jackson, his family publicly claiming Jackson was murdered, bombshell tonight.

After it is revealed police seized evidence from Jackson`s bedroom to make a case for homicide, including a bedside oxygen tank, a bag of liquid from a bedside IV pole, multiple tanks of oxygen in the bedroom and garage, tonight reports emerge Jackson`s family keeping his body on ice, planning to reclaim a portion of the music icon`s brain still held by the medical examiner.

This as we learn grandmother Katherine strategizes to challenge terms of Jackson`s will. Now charges leveled against Jackson`s live-in doctor, Jackson`s family pointing the finger at the music icon`s private doc. And tonight: As Jackson took his dying breath, was he robbed of nearly $2 million and a cache of jewels? TMZ stands by the report this is a homicide case. The DA`s office denies it.

Reports emerge dozens of doctors probed over Jackson`s death. Was there a massive cover-up? We learn a highly sophisticated high-tech security system allegedly monitoring every inch of the home, including Jackson`s private living quarters. That secret video of Jackson`s final moments gone. Also, a huge black leather bag full of drugs, an IV pole, syringes and IV bags gone.

Jackson`s body still hidden and protected by armed guards to stop would-be body snatchers. After a second autopsy reveals fresh needle marks in Jackson`s neck, other veins riddled with track marks, his skin paper white, his body emaciated, drugs banned for consumer use found in the home. This amid reports he wanted to be put under with an IV drip for days on end, essentially lying there like a living corpse up to 72 hours at a time.

Bio mom Debbie Rowe allegedly, quote, "in negotiations" over Jackson`s three children. Alternative, father Joe Jackson wants the children on the stage making money, and he`s boasting he himself will raise them. In a stunning statement, he blamed 79-year-old grandmother Katherine for all of Jackson`s childhood beatings. Has Jackson`s worst nightmares come true?

And of course, the FDA now announcing it may classify Diprivan as a controlled substance. Hey, Washington, you`re a day late and a dollar short, as usual! As vultures circle Jackson`s dead body, including corporate giant AEG, trying to sell Jackson`s rehearsal video for $50 million -- that`s right, make a buck off the dead man`s last dance -- the fate of his three children unknown.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: He`s not responding to anything, to no -- no -- he`s not responding to CPR or anything.

UNIDENTIFIED FEMALE: There were many pill bottles that were found at the home with various names on them.

UNIDENTIFIED MALE: ... reports about the powerful sedative Diprivan found in Michael Jackson`s home.

UNIDENTIFIED MALE: This powerful drug is used in operating rooms to knock out patients.

UNIDENTIFIED MALE: If there`s indications that these drugs may have been administered by another party via injection, then this very well could be a homicide investigation.

UNIDENTIFIED FEMALE: A documentary about Michael Jackson`s final days could be in the works. "The Wall Street Journal`s Web site says AEG Live may reach a deal with a major Hollywood studio this week. The documentary would be made mostly from footage of Michael Jackson preparing for a 50-run show in London that was supposed to kick off a week ago.

UNIDENTIFIED MALE: He should not have been getting ready for a 50-day concert tour. He should have been in a hospital, getting proper medication and proper attention. And unfortunately, the enablers around him disregarded that. They had dollar signs in his eyes, and today there`s a dead man and there`s three children without a proper game plan.

UNIDENTIFIED MALE: Are you ready for fight for your children?

DEBBIE ROWE, JACKSON`S EX-WIFE: Do not touch me!

UNIDENTIFIED MALE: Nobody touched you here.

ROWE: You just did! Don`t!

UNIDENTIFIED FEMALE: A source close to the family told us that Katherine Jackson`s attorney is actually trying to broker a deal regarding custody. A source told us that Rowe stands to be paid, quote, "many millions" if she agrees to give up any contact and any custody with her two children.

(END VIDEO CLIP)

GRACE: And breaking news in the search for a 2-year-old Florida girl. Six months of searching culminates when skeletal remains found in a heavily wooded area 15 houses from the Anthony home confirmed to be Caylee`s. A utility meter reader stumbles on a tiny human skeleton, including a skull covered in light-colored hair, the killer duct taping and placing a heart- shaped sticker directly over the mouth, then triple-bagging little Caylee like she`s trash.

Bombshell tonight. The defense fires a torpedo at Lady Justice, filing legal motions to keep a high-profile bounty hunter and his employees who got close to tot mom off the stand. Why? What does he know?

(BEGIN VIDEO CLIP)

LEONARD PADILLA, BOUNTY HUNTER: I want to put her back in jail.

(INAUDIBLE) out of jail is the big thing.

You can take her back to jail.

I can`t change my mind.

She said if she got out, she wanted to go find her daughter.

UNIDENTIFIED MALE: (INAUDIBLE) 150 on count 2, 100 on count 3 and no contact with the victim, Amy Huizenga. Do you understand, Ms. Anthony?

CASEY ANTHONY, CAYLEE`S MOTHER: Yes.

UNIDENTIFIED MALE: Not a word. Not a word.

PADILLA: She`s sitting there at home. She hasn`t uttered one word. And she says, (INAUDIBLE) has the baby.

She didn`t say a word to me. She didn`t say a word to her mother or her dad.

UNIDENTIFIED MALE: (INAUDIBLE) claimed Casey Anthony stole checks and money from a friend while that friend was out of town. And she did this during a time when Caylee was missing.

UNIDENTIFIED FEMALE: These are grand theft charges, fraud and forgery charges for check.

PADILLA: What, I can`t change my mind?

I believe the baby`s alive.

The little girl is deceased.

I believe she passed it off to one of her friends.

I don`t believe that somebody else put a body in the car.

UNIDENTIFIED MALE: ... that your daughter had taken money from your mother. Is that right?

CINDY ANTHONY, CASEY`S MOTHER: Correct.

UNIDENTIFIED MALE: And when was that and how much was that?

CINDY ANTHONY: I believe there was $27 or $47-something one time, and (INAUDIBLE) $100-and some one time.

PADILLA: Once. I changed my mind once.

And I`m still hoping that the little girl is alive.

I don`t think she`s alive anymore, no.

UNIDENTIFIED FEMALE: Do you still estimate it will take you a week to get her back?

PADILLA: A week from today.

The little girl is deceased.

I don`t think the little baby`s dead.

I`ve changed my mind 180 degrees.

CINDY ANTHONY: I don`t know what your involvement is, sweetheart. You`re not telling me where she`s at.

CASEY ANTHONY: Because I don`t (DELETED) know where she`s at! Are you kidding me!

PADILLA: Bail can be pulled anytime.

Practicing to run for president with all the flip-flops.

(END VIDEO CLIP)

GRACE: Good evening. I`m Nancy Grace. I want to thank you for being with us. Tonight, the mystery surrounding the sudden death of music superstar Michael Jackson intensifies.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: The attorney general`s office is looking at dozens of doctors who may have been involved in getting prescription drugs for Michael Jackson.

UNIDENTIFIED FEMALE: A source involved with the investigation told us numerous bottles of prescription medication had been found in Jackson`s $100,000-a-month rented mansion.

UNIDENTIFIED MALE: They`re running through their state database that tracks prescription drugs the names of several of Michael Jackson`s doctors, as well as those aliases that Michael Jackson used. And what they`re trying to do is track who wrote him what prescription, how much and when, and over what period of time.

UNIDENTIFIED MALE: There are reports that police found Diprivan, a powerful anesthetic, in Michael Jackson`s house.

UNIDENTIFIED FEMALE: The source tells us Jackson had, quote, "numerous" track marks on his arms and that those marks, quote, "could certainly be consistent with the regular IV use of a drug, like Diprivan."

UNIDENTIFIED FEMALE: Generic name is propofol. Brand name is Diprivan. Both interchangeable, same drug, supplied in vials like this.

UNIDENTIFIED FEMALE: Diprivan is not something that should really ever be prescribed.

UNIDENTIFIED MALE: If that power anesthetic was the cause of death, if anyone who issued that anesthetic to Michael Jackson and was not physically there to administer it, committed gross negligence and should be held accountable.

UNIDENTIFIED FEMALE: The problem is propofol is not on that database because it`s not a controlled substance.

UNIDENTIFIED MALE: (INAUDIBLE) still believe in a conspiracy?

LA TOYA JACKSON, MICHAEL JACKSON`S SISTER: It`s murder. I think someone did it. That`s my opinion.

(END VIDEO CLIP)

GRACE: Family members now publicly saying, He`s a doctor, he`s a live-in doctor. Why is Michael Jackson dead?

Everybody, you are seeing Michael Jackson`s sister, La Toya, giving her opinion to TMZ cameras that someone murdered her brother.

Out to Mike Walker, senior editor with "The National Enquirer." Mike, explain to me what the family -- what the family -- what the charges are they are leveling against this private live-in doctor?

MIKE WALKER, "NATIONAL ENQUIRER": They are saying that they suspect foul play, that this was murder. For whatever motive, who knows. It could be insurance. It could be a myriad of things. Or it could be just plain incompetence. If this doctor, Dr. Murray, was not a trained anesthesiologist, he is not allowed to use propofol or Diprivan in a home setting like that. Even if he were, he would have to have the devices that you need to keep somebody breathing. This is a drug that is only to be used in an operating room.

If propofol was used here, when the toxicology reports shows that that caused the death, if it does, you`re going to hear a cry of murder go up. At the very least, it will be a manslaughter charge, in my opinion.

GRACE: So while all of these doctors are scurrying around L.A. claiming they`re not being probed, there are literally dozens of doctors being probed in a potential homicide case. This as we learn Jackson`s body allegedly being kept in a freezer, as they demand a portion of his brain be returned to the body before burial. What do you know, Mary Margaret, senior news editor at Radaronline?

MARY MARGARET, RADARONLINE.COM: Well, the family -- in terms of the doctors, Dr. Murray, who is sort of the lead antagonist in this storyline - - he said that he has not been dodging the -- dodging the LAPD, as reports have been surfacing over the weekend, that he`s been working with investigators, completely 100 percent complying. And so far, he`s saying that this pretty much is a character attack on him.

GRACE: Out to the lines. Bernadine in Illinois. Hi, Bernadine.

UNIDENTIFIED FEMALE: Hi, Nancy.

GRACE: What`s your question, dear?

UNIDENTIFIED FEMALE: I was wanting to know, how can they possibly say that this is not a murder? This Dr. Conrad Murray, for one thing, if he was a doctor, how could he give this man Diprivan?

GRACE: Exactly. Let`s go out to Dr. Michael Bell, Palm Beach County chief medical examiner. Dr. Bell, you know, obviously, this is an overnight dosage of Diprivan. Explain to me how you can prove a shot of Diprivan caused cardiac arrest, Dr. Bell.

DR. MICHAEL BELL, PALM BEACH COUNTY MEDICAL EXAMINER: Well, the short answer is you have to rule out any other causes of death besides the Diprivan. And that would include subtle heart or brain abnormalities and other drug overdoses.

GRACE: So you`re telling me, Doctor, it`s a process of elimination?

BELL: Yes.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: A source close to the investigation saying murder charges are not likely. We`re wondering how`s that? If a doctor irresponsibly gave Michael Jackson Diprivan and that`s the primary cause of death, how`s that not murder?

UNIDENTIFIED MALE: A senior law enforcement tells "The LA Times" there`s nothing to suggest it, so remote, unsupported by the facts so far.

UNIDENTIFIED MALE: The coroner has to rule this a homicide, which means it wasn`t an accidental death. If it is ruled a homicide, there are still a number of charges that the DA can proceed with, among them illegally prescribing drugs, prescribing drugs under a number of aliases.

UNIDENTIFIED FEMALE: For the prosecutors to go after first degree murder, they have to prove that someone intended to kill Michael Jackson. Then you look at second degree, which is basically a willful disregard for human life. Then you look at the involuntary manslaughter, and that might be the best way to go, if, in fact, they`re going to prosecute anyone.

UNIDENTIFIED MALE: Michael Jackson had a very good relationship with all of his doctors. Michael Jackson was controlling everything. Remember, he put a physician on his payroll for this concert! So evidently, he was the one who was telling him what he needed.

GRACE: We are taking your calls live. Back to Mike Walker, senior editor of "The National Enquirer." Why don`t they bury him? It`s been 25 days. I don`t even know where the body is, except that it`s on ice somewhere.

WALKER: It`s on ice. If this was your child, would you not, at this point, say, Bury him? We`re waiting for this little piece of brain, which by now is as hard as a brick? They slice little slices off it to show under a microscope. What they`re doing is they are building the mystery and the mystique. That`s why you`re hearing all this "murder" and "foul play" from Joe. He wants to keep this exciting. He wants it to be a mystery.

Why are these boys, his brothers, going down to do a concert with Michael not even in the ground yet? This is barbaric. It`s disgusting behavior!

GRACE: Whoa, whoa, whoa, whoa, whoa, wait!

WALKER: Fans should rise up against this!

GRACE: What concert? I understand that there`s a ghoulish plan to resurrect, literally, the Jackson Five.

WALKER: I am breaking in my column tomorrow what I call the "zombie zone," and this Joe Jackson -- we`ve already heard him suggest the Jackson Three, right? Prince Michael and Blanket and -- and the daughter...

GRACE: Paris.

WALKER: ... going out as -- Paris. I mean, unbelievable! But this is even more unbelievable. He`s going to put the boys out there, the other brothers who were in the Jackson Five, out there doing shows, Nancy, with Michael, or Michael`s voice, with those unreleased records we heard about that are in the vault, OK? So what he`s going to do -- and Michael may rise up out of the grave when he hears this -- he`s going to turn his son into a dumbass oldies act.

GRACE: So nobody had a bad reaction when Natalie Cole did it. However -- go ahead, what`s the difference?

WALKER: A labor of love. A labor of love. That was a labor of love. It was one thing, one song. It meant something -- (SINGING) Unforgettable, that`s what you are...

GRACE: That`s right.

WALKER: This is not that. This is a whole concert!

GRACE: So this would be them going on tour and essentially putting him up like a hologram behind them while they dance and sing...

WALKER: Right.

GRACE: ... to his brand-new songs that they had never even heard of?

WALKER: Yes. Like the Platters, when there wasn`t one person from the Platters left, you know, touring the world in obscure places.

GRACE: And what can you...

WALKER: That`s what he proposes to do.

GRACE: ... tell me about AEG starting -- starting at $50 million for the video of his last rehearsal?

WALKER: Well, I love AEG. I`d like to say that right up front because, boy, these guys are some smart businessmen. They`re making money from this. I have sources inside the music industry and in the studio industry telling me about all these deals going on. John Branca is doing a terrific job selling off all these different rights while the selling`s hot.

And don`t get mad at AEG. Why shouldn`t they sell the rights to these concerts and this video footage, and so forth?

GRACE: Mike Walker...

WALKER: Why not?

GRACE: ... you and I rarely disagree, but there is something wrong with this steady stream of people and entities and corporate giants, everybody taking a little piece of Jackson`s dead body. Some people may say it`s good business. To me, it`s distasteful. There`s something wrong with it. I don`t like it.

WALKER: OK.

GRACE: Maybe I`ve got it wrong.

WALKER: But at least AEG -- AEG is selling video, OK? Nothing wrong with selling video. What Joe Jackson is going to do is take the living brothers and put them out on the stage, and I don`t know, have a little animatron or something be Michael and it`ll be Michael`s voice. Ghoulish.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CHERILYN LEE, REGISTERED NURSE: I got this chill through my body. And I said, Michael, if you take that medicine, you might not wake up.

UNIDENTIFIED MALE: We`re not investigating the doctors, we`re investigating Mr. Michael Jackson`s death.

UNIDENTIFIED MALE: You`ve doctors who allegedly overprescribed or abused...

(END VIDEO CLIP)

GRACE: To Brian Oxman, Jackson family confidant, host of "Insight" on newsradio KLAA. Brian, I understand that while Katherine Jackson says she`s not contesting the will, she is, in fact, planning to contest terms of the will, specifically who the executors will be.

BRIAN OXMAN, JACKSON FAMILY CONFIDANT: When an executor is challenged for things such as a conflict of interest or not having the best interests of an estate in their business practices, that`s not a challenge of the terms of the will. There`s no disputing the executor was named in the will, so you`re not challenging the will. What you`re saying is that in the interim period of time, an executor has developed a conflict of interest. She`s being very careful, very cautious. And yes, Nancy, this is exactly the way she should do it.

GRACE: OK, so Oxman says she`s not contesting the will but she is contesting a term of the will. OK, Brian, spoken like a true attorney.

OXMAN: It`s not a term.

GRACE: OK.

OXMAN: No, no. It`s not a term of the will. It`s saying that in the interim period that a conflict has developed, and that does not challenge...

GRACE: I heard you the first time.

OXMAN: ... the terms of the will.

GRACE: Heard you the first time. Out to Dorian Holley, vocal director who worked with Jackson for 22 years, saw him the night before that last rehearsal. Thank you for being with us, Dorian Holley. What can you tell me about his demeanor when you last saw him?

DORIAN HOLLEY, VOCAL DIRECTOR (via telephone): Well, Nancy, you know, the assumption is, since this tragedy has happened, that -- and because of what people have been saying, people believe that Michael was ill and that he was weak and that he couldn`t go through with the 50 shows -- his demeanor couldn`t have been more different. He was energetic. He was happy. Rehearsals were great. He seemed to be excited about the prospect of doing the tour. As you know, the tickets sold like -- in record time, and there were lots more tickets that could have been sold, if they wanted to.

The fact is that it seemed to me that he was completely ready to do the tour and excited about doing the tour.

GRACE: With me, Dorian Holley, who saw Jackson the last night before his rehearsal.

To Robin Sax, former L.A. County prosecutor. Robin, thank you for being with us. What is your take on what is going on?

ROBIN SAX, FORMER L.A. COUNTY PROSECUTOR: As a former L.A. prosecutor and having friends still in the office and been involved with some of the people who are in the office, it is pretty clear to me that there is a thorough investigation that`s going on. All aspects of the investigation are being looked at, both the homicide aspect, the illegal prescription of drug aspect. They`re taking their time. They`re going through the mountains of evidence on everything. And that`s where they`re at right now, waiting for the final confirmation on the autopsy report.

GRACE: And Robin Sax, what would a theory -- if they go forward with a homicide charge, what would the theory be?

SAX: I think that they would go through -- if they`re going to do it, it`s going to be an involuntary manslaughter or a reckless disregard for human life as a doctor.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: That Casey had stolen from her grandparents from an account dedicated to paying for assisted living expenses. Tensions had been building over the theft.

CPL. YURY MELICH, ORANGE COUNTY INVESTIGATOR: Did you tell Cindy what happened?

SHIRLEY PLESEA, CASEY ANTHONY`S GRANDMOTHER: Yes. I told Cindy that.

MELICH: How did she take it?

PLESEA: She didn`t blame me. And she was sorry.

MELICH: She upset?

PLESEA: She said, mom, we`ll pay you back. I said, no, don`t pay me back. I said if the bank wants to arrest her, they`re going to. I would`ve passed charges but for Caylee`s sake and for Cindy`s sake I didn`t want to.

UNIDENTIFIED MALE: She said, I stole money from you. You have been untrustworthy.

GEORGE ANTHONY, CASEY ANTHONY`S FATHER: There were deposit slips that she forged for $400.

UNIDENTIFIED MALE: With her mother`s name on it?

G. ANTHONY: Yes. With our account.

UNIDENTIFIED MALE: You also have an understanding that your daughter had taken money from your mother, is that right?

CINDY ANTHONY, CASEY ANTHONY`S MOTHER: Correct.

UNIDENTIFIED MALE: And when was that and how much was that?

C. ANTHONY: I believe there was a $27 or $47 one time and 200 and some dollars one time.

UNIDENTIFIED MALE: And that she actually took money from your grandmother -- I`m sorry, from your mother, her grandmother, by writing a bad check, is that your understanding?

C. ANTHONY: Correct.

UNIDENTIFIED MALE: Did Casey ever take money from you by using your credit cards without your permission?

C. ANTHONY: It`s not relevant to this case.

(CROSSTALK)

C. ANTHONY: I`m not answering the question.

(END VIDEO CLIP)

NANCY GRACE, HOST: Straight out to Jean Casarez, legal correspondent, "In Session." Jean Casarez, the big headline on the bad check days where she, tot mom, allegedly took money from her best friend by using all of her checks, is they want a delay.

Surprise. Surprise. Surprise. I`ve told you ever since I`ve met you, Jean Casarez, 10 years ago, that is a defense attorney`s best friend. Delay, delay, delay. No big headline for me there.

The big headline for me is the defense fires a torpedo at lady justice demanding that bounty hunter Leonard Padilla and his employees who got close to top mom be kept off the stand.

Now I`ve got a problem, Jean, when a lawyer doesn`t want the jury to hear some testimony. Why?

JEAN CASAREZ, CORRESPONDENT, "IN SESSION": Well, this has just happened. This is a motion the defense has filed with the court. And he`s telling Leonard Padilla that they don`t want any statement that Casey Anthony said to Leonard Padilla about the case to come into her trial, to be told to prosecutors or to be told to the media because they say that Leonard Padilla was an agent of the defense when he was providing security to Casey Anthony last year and because of that, Nancy, he`s therefore subject to the attorney/client privilege.

GRACE: Out to Leonard Padilla joining us from Sacramento, California.

Leonard, long time no see. Did you ever think you`d be in the middle of.

LEONARD PADILLA, BOUNTY HUNTER, DEFENSE WANTS SILENCED IN TOT MOM CASE: Good to be back.

GRACE: In the middle of a legal fight where you`ve got a whole fleet of defense attorneys trying their best to keep you muzzled? What do you know that they don`t want a jury to hear, Padilla?

PADILLA: Well, I really believe that the situation that Jose Baez and his team don`t want in front of the jury is that testimony that would be forthcoming from us which would be 180 degrees out of focus with what they have from law enforcement as far as what she told law enforcement.

You know as well as I do when you`re in front of a jury and there`s two stories told, the jury generally picks one or the other. Here they would have a choice of whether she gave the child up to a baby sitter at Sawgrass, or did she have the baby taken from her at the Jay Blanchard Park, through force, and given a list of 30 instructions to give law enforcement which was nothing more than lies.

And the jury would, obviously, sit back and say, hold on, this is ridiculous, and choose both stories as being untrue.

GRACE: So Leonard Padilla.

PADILLA: That`s what they want to keep out.

GRACE: You think that -- well, what this signifies to me, Padilla, is that they`re going to stick with the nanny took the baby. And you can`t tell a jury well, she took her at Sawgrass Apartments when I dropped her off for her typical nanny day care as opposed to she took the baby from my arms at a public park in broad daylight.

You can`t have your cake and eat it, too. And your testimony and your people`s testimony would totally destroy that.

PADILLA: Absolutely. And if you some day down the road -- I don`t know about what Tracy she`s going to testify to, or what her testimony will be.

GRACE: That`s your former employee?

PADILLA: There`s Rob Dick, there`s my nephew, Tony -- it`s all these people that Baez is afraid of.

GRACE: And how did they get closing to tot mom to hear all this?

PADILLA: Well, basically, when I took on the deal that I was going to put up the $50,000, my nephew is going to put up the half a million bond. The agreement, even before we went to Florida, with Jose Baez, for several conversations that I had with him, was hey, we want to be in the room with this young lady constantly. We don`t want to do it to be eavesdropping on her, but we certainly don`t want her to be able to flee.

The ankle monitoring system that a lot of people used which was used on her isn`t 100 percent fool-proof and I certainly didn`t want to put my nephew at risk for half a million dollars. So there was a lot of contingencies that were agreed to by Jose and we also agreed that we would not be making any money off of any book and movie rights. We also agreed that we would not interfere with any of her constitutional rights.

GRACE: OK. Leonard, Leonard.

PADILLA: That`s part of the same agreement.

GRACE: OK. Yes. Liz, you could quit showing that classy shot of tot mom urinating in a parking lot. I believe we`ve all seen that enough. But thanks for the refresher.

Leonard, who paid you? Did anybody pay you for the security?

PADILLA: No. The fact is, Rob Dick told me, Miguel and Kevin.

GRACE: OK.

PADILLA: . went as volunteers.

GRACE: That was a yes-no.

PADILLA: When I offered to pay them they said no.

GRACE: That was a yes-no. That was a yes-no answer. Did you get paid?

PADILLA: Nobody paid -- nobody paid me.

GRACE: OK.

PADILLA: And I did not pay the security of.

GRACE: Let`s unleash the lawyers. Joining me tonight, veteran former prosecutor, Robin Sax, out of the L.A. jurisdiction, Randy Kessler, defense attorney out of Atlanta. And former federal prosecutor, now defense attorney out of New York, Doug Burns.

Robin Sax, the defense didn`t pay him. So why are they suggesting that he worked for them and is therefore bound by attorney/client privilege?

ROBIN SAX, FORMER PROSECUTOR: Listen, Jose Baez isn`t going to stop at anything. Any sort of way that he can hassle the prosecution with every motion possible, is considered a win for him and if you keep Leonard off the air, it`ll be better for him later on.

I think that this is frivolous waste of time and I don`t think that the attorney/client privilege is going to hold where there`s no attorney/client relationship.

GRACE: You know, Doug Burns, another thing I think Baez doesn`t want this jury to hear about is not just what she said but how she said it. Her demeanor in the days and hours after she sprung out of jail for the first time, while Caylee is allegedly still missing. What about that?

DOUG BURNS, DEFENSE ATTORNEY: No, you`re absolutely right. Statements and conduct. But the minute Leonard Padilla got involved in this case, I said to myself, 20 red flags of attorney/client privilege went off of my head and I knew it wasn`t going to be privileged.

Back to Robin there. Definitely going to lose that motion and he`s going to lose that motion and he`s going to testify.

GRACE: Now, Doug, if you claimed red flags of alarm or.

BURNS: Right.

GRACE: . or waving in that back of your mind.

BURNS: Yes.

GRACE: Did you think that there was at any point a privilege? I`m talking, everybody, about husband-wife, priest-parishioner.

BURNS: Right.

GRACE: Attorney-client privilege, where that attorney can`t get on a stand and blurt out what you have told him or her. Same thing applies to people that work for the lawyer. So if you were concerned, do you think that there`s an argument, do you think he`s got a leg to stand on to keep Padilla off the stand?

BURNS: Well, they signed a confidentiality agreement but most confidentiality agreements have the specific laws that said law enforcement subpoenas.

GRACE: Got it.

BURNS: You know, are an exception. So I think they`re going to lose.

GRACE: Randy Kessler?

RANDY KESSLER, DEFENSE ATTORNEY: He`s got to make a record, because you know what, the prosecution has something to lose. If they filed an appeal because this privilege was invaded, that`s a risk. The prosecution may forego this testimony from Padilla just to make it a cleaner trial. Yes.

GRACE: And very quickly, back to Leonard Padilla, who is staying with us to answer your question.

Leonard, what was her demeanor during those hours and days when you first - - and your people were first around her?

PADILLA: Let me tell you something that I suggested to Jose Baez in the five-minute -- the first five minutes that I met him. I said, Jose, pay us each a buck if you want the privilege to stick. Otherwise, there`s no privilege. He says no, I`m not interested in that at all.

The demeanor is one of a compulsive liar. Constantly lying.

GRACE: Right now, tot mom still behind bars as she awaits trial.

(AUDIO CORRUPTED)

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UNIDENTIFIED FEMALE: The state attorney`s office issued formal charges against tot mom Casey Anthony for allegedly forging checks belonging to a friend.

G. ANTHONY: This might be a tough thing to answer.

CASEY ANTHONY, MOTHER OF CAYLEE ANTHONY: No. Go ahead.

G. ANTHONY: But did you borrow something from anyone or remove it without their permission that Caylee might be being held for?

C. ANTHONY: No.

MARK WILLIAMS, NEWS DIRECTOR, WNDB NEWSTALK 1150: These checks came from her friend`s car, Amy Huizinga. Amy went on vacation to Puerto Rico allowing Casey to use the car and she allegedly took some checks. She`s passing this bad paper. Apparently she has passed some additional bad checks to area businesses.

G. ANTHONY: I know that`s a tough question, sweetie. But I just need to ask you.

C. ANTHONY: It`s not a tough question, Dad. I mean Mom knows the stuff that I had taken from her. We discussed that, you know, on numerous occasions and with Amy. You know, I mean, I feel guilty about that. I feel extremely guilty but I was under a time of desperation.

UNIDENTIFIED FEMALE: Channel 9 has learned that an intense fight right before Casey left with Caylee in mid-June was over money that Casey had stolen from her own grandparents from an account dedicated to paying for assisted living expenses. Tensions had been building over the theft.

UNIDENTIFIED FEMALE: OK. What did the person do that you need arrested?

C. ANTHONY: My daughter.

UNIDENTIFIED FEMALE: For what?

C. ANTHONY: For stealing an auto and stealing money.

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GRACE: And we learned today the defense wants the bad check charges trial delayed. That is not a surprise.

Drew Petrimoulx with WDBO is joining us from Orlando. What is their excuse for a delay in the check trial?

DREW PETRIMOULX, REPORTER, WDBO RADIO: They say they need to have it -- they need to have time to study for the murder case. That it takes a lot of resources, a lot of time, a lot of money, and if they`re forced to focus their attention on a fraud case now that will take away from Casey`s right to a fair trial in her murder case.

GRACE: OK. That`s BS, Robin Sax, because we already know they`re getting a further notice or a continuance in the murder case. We already know that. And a death penalty case will linger for years before it goes to trial sometimes. They`ll give them all the time in the world they want to get ready on the DP case.

Do they need more time on a bad check case? Repeat. A bad check case may take three days once you strike a jury. Maybe to try.

SAX: That`s absolutely true. A check case will take no time at all. And the delay and the need to study up for the death penalty case and the murder is really just an excuse.

However, the real question and the real point that`s going to resonate with the judge is the economic resources and the economic condition of bringing in a full set of jurors, having to call witnesses in a case where she does get the penalty, who cares about the punishment on the check case.

GRACE: You know, the kicker, though, to you, Doug Burns, is that if the death penalty trial goes to DP phase, if they get a guilty verdict on murder one, then you go to sentencing case. It`s a (INAUDIBLE) trial where you tried guilt-innocence, then you try the sentence.

If she`s already got a felony conviction for passing -- writing bad checks on her friend`s checking account, that may come in in aggravation at death penalty case.

BURNS: Yes, no, that`s a good point and then another point which is kind of interesting, Nancy, is that if she gets convicted on the check payment, then theoretically.

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PADILLA: You could immediately tell within the two hours after her release that the parents were very protective of anything that might come about as a result of our contact with her, although they didn`t negate our contact with her.

It was a type of situation where they didn`t really want her around us, which, obviously, Jose had instructed everybody, hey, I don`t want her to talk to anybody, including her parents.

GRACE: Well, were they.

PADILLA: Especially Leonard.

GRACE: . involved.

PADILLA: That`s not a problem.

GRACE: Were they involved in trying to find Caylee? What was their attitude?

PADILLA: No, never. Never. Never. Not the father, not the mother, not Lee, not the tot mom.

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G. ANTHONY: I know she`s been taking money from my granddaughter`s bank, because I`m always dropping a buck, five bucks, quarters. And one day you go in there and that bank`s heavy, I mean, it`s a good-sized piggy bank and you know you put money in there, you know it. There`s nothing.

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GRACE: Out to the lines. Vicki in Florida. Hi, Vicki.

VICKI, CALLER FROM FLORIDA: Hi, Nancy. I absolutely love you and your twins are beautiful.

GRACE: I`m blessed. I am blessed. And you know, they`re coming up on 2 years old. I cannot believe it.

VICKI: I know. You`re an inspiration to me. I watch you every night. I have been dying to ask this question for months.

GRACE: OK.

VICKI: With the evidence of decomposition in the car and the nanny, which I think is a bunch of BS, how and why are they not explaining how that baby got in the trunk of that car?

GRACE: You know, excellent question. It`s because they don`t want to touch that one with a ten-foot pole.

Jean Casarez, joining us from "In Session." Everybody talks about what happened in the trunk. Did she have tape over her mouth, was she gagged, she purposefully killed, but what about why she was in the trunk to start with?

CASAREZ: Well, we haven`t seen it yet, but the defense is going to attack the forensic evidence. They`re going to say the evidence in the trunk does not show signs of decomposition, that the forensic experts are wrong.

GRACE: So they`re going to have the battle of the experts.

Drew Petrimoulx, what about it? No one has even really discussed this, as Vicki points out from Florida? Why was the child ever in the trunk to start with?

PETRIMOULX: You know they haven`t touched on that but you have to think that what their strategy is going to be is to attack the forensics. They`ve already come out calling it bogus science and saying that the -- you know gas samples and particles that they took from the trunk don`t actually show human decomposition.

GRACE: They`ll probably argue she was never in that trunk. You`re right. You`re right, Drew Petrimoulx.

Everyone, let`s stop and remember Marine First Lt. Jared Landaker, 25, Big Bear City, California, killed Iraq. Loved TV shows "Rescue Me" and "24".

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