5:20pm PT by Ashley Cullins
Michael Jackson's Ex-Manager Takes the Stand in Tax Trial
Describing the relationship between Michael Jackson's estate and his ex-manager Tohme Tohme as adversarial is putting it mildly, and that tension was on full display Thursday as he took the stand in a trial over the King of Pop's taxes.
Tohme, a former Colony Capital consultant, began working with Jackson in 2008 when he coordinated the buyout of a loan on Neverland Ranch. He says Jackson brought him on because of his relationship with Colony CEO Tom Barrack and, as a finder's fee of sorts, he was to receive 10 percent of the total value of the loan. At the time, he says he was receiving $20,000 a month in consulting fees from Colony — plus a share of the deals in which he was involved.
The $23 million loan buyout allowed Jackson avoid foreclosure on the ranch and sealed Tohme's position as the entertainer's manager. Since 2012 he's been involved in a contentious legal battle with Jackson's estate over his pay. (More on that later.)
He was called as a witness by the IRS, presumably, to show that Jackson had business suitors in the time leading up to his death despite allegations of child molestation — which the estate claims hurt his brand and diminished the value of licensing his name and image. Tohme specifically mentioned prospects of a "Moonwalker" shoe deal with Nike and a Broadway musical based on Jackson's songs.
Jackson estate attorney Howard Weitzman pulled no punches during his cross-examination of Tohme, making it quite clear his goal was to impeach him as a witness.
After going through the potential list of deals Tohme had mentioned and pointing out that none had come to fruition, Weitzman turned his attention to a series of documents that suggest Tohme was terminated in the spring of 2009. Tohme claims he worked with Jackson up until his death, but the estate has held that he was fired several months before that.
Jackson's ex-manager has been known to go by "Dr. Tohme," which led Weitzman to ask him about his résumé. Did he attend medical school? No. Did he have a Ph.D. in economics? No.
Weitzman then asked why Tohme had said during a deposition in a previous case, in which he was a witness, that he held those degrees.
"You tortured me in the media," Tohme said, claiming that the estate hired a private investigator to dig up dirt on him and that the P.I. visited a woman he was briefly married to decades ago. "The reasons for these answers is I don't want you to know. I'm a very highly educated person. I speak many languages. I don't know what else to tell you."
The transcripts of that deposition were admitted to the record following an objection from the IRS, but only for the purposes of impeachment. The topic came up so often during Tohme's questioning that during a recess he asked someone in the hall what "impeachment" meant and why Weitzman kept saying it.
Tohme got a brief break while noted theater producer James L. Nederlander took the stand to discuss the never-launched Thriller play. But when Weitzman called Tohme back for round two he turned up the heat, asking him about his replacement by Frank DiLeo. Tohme's exasperation was clear as he angrily asked, "Who’s on trial here, me or the estate?"
Eventually, Weitzman brought up the estate's pending litigation with Tohme. "Did you ultimately file a lawsuit against the estate?" he asked. "Yes," said Tohme. He then noted to Weitzman that he's been seeing him in court for several years and added coyly, "I like your company." U.S. Tax Court Judge Mark Holmes took full advantage of the lighter moment to quip, "You’re under oath."
Chuckles echoed through the courtroom, as they would a few minutes later when Holmes had another burst of wit after Weitzman's final question.
Weitzman: Why do they call you Doctor?
Tohme: Why do they call me a doctor? You have to ask whoever calls me a doctor.
Weitzman: Is it in the same vein as Dr. J (Julius Erving) or Doc Holliday?
Holmes: Doc Holliday was a real doctor.
Weitzman: You don't have to answer.
Tohme decided to leave the matter "for another time" — which could likely be mere months from now during his own trial against the estate.
After Wietzman finished, IRS attorney Sebastian Voth pointedly asked Tohme about their relationship. “Is it fair to say that you and the estate have a very contentious relationship?" asked Voth. "Yes," answered Tohme.
The legal fight between Tohme and the estate dates back to 2012, when a pair of dueling lawsuits were filed. At the center of the dispute is whether Tohme's work near the end of Jackson's life was for the superstar's benefit or his own. They also dispute whether he is entitled to the $2.3 million from the Neverland Ranch loan and a share of the revenue that has been earned since Jackson's death.
Trial is currently set for October and, if Tohme's time on the stand Thursday is any indication, there will likely be fireworks in the courtroom.