2ND UPDATE: Michael Ovitz on the witness stand at the Pellicano trial today pointed an accusatory finger at his former friend and CAA partner Ron Meyer, now president/COO of Universal Studios, and at his longtime nemesis David Geffen, the billionaire co-founder of DreamWorks. Ovitz testified that he suspected they were the sources behind those co-bylined New York Times articles damaging to him and his AMG business written in 2002 by freelance writer Anita Busch and staff writer Bernie Weinraub. So he says he hired Hollywood private eye Anthony Pellicano and paid him $75,000 to find out.

Ovitz: I called him because I knew he was sourcing the articles. Not the people writing the articles. He knew a substantial number of people in the West Los Angeles business community. He was working with people I was having problems with — Ron Meyer, David Geffen.
Cross-Examination by Chad Hummel, the attorney for defendant LAPD Sgt Mark Arneson: Did you believe these two individuals were sourcing the articles?
Ovitz: I did.
Hummel: What did you want to know?
Ovitz: When I was going to be ambushed. When the other shoe was going to drop… He told me I had a huge problem with Ron Meyer.

On the subject of Anita Busch:

Hummel: Did he [Pellicano] give you embarrassing information about Anita Busch?
Ovitz: No. He was rather dismissive of her.
Hummel: Did he give you embarrassing information about Bernard Weinraub?
Ovitz: No.
Hummel: Did you ever hire Mr. Pellicano to put a fish on Anita Busch’s car?
Ovitz: Absolutely not.

Busch added Ovitz as a defendant to her civil suit against Pellicano stemming from the threat to her.

In court this morning, an audiotape was played of an April 2002 phone call from Ovitz to Pellicano asking for a secret meeting. It was obtained by freelancer writer Allison Hope Weiner and is available exclusively on The Huffington Post here. The 2-minute call takes place right around the time the NYT articles were published, and Ovitz is heard saying, “I need to see you” to Pellicano as the one-time most powerful man in Hollywood requests an emergency appointment. ”This is the single most complex situation imaginable… I’ll come to you but I’m not coming to your office.”

ovitz-leaving-trial-100.jpgHere’s complete coverage of Ovitz’s Pellicano testimony this AM. (FYI, MO was so press shy today leaving the Pellicano trial that he sat in the front seat of this Range Rover with his hand over his face and the visor shielding himself from photographer Jim Stevenson who snapped 2 pics for DHD (left and below):

Michael Ovitz began testifying at approximately 8:51 AM and was wearing a dark suit, white shirt, tie, eyeglasses and carrying an Aquafina water bottle. His hair was a longer length than when he’d been at CAA or Disney. And he looked “puffy”, according to spectators. During his testimony, Ovitz had a habit of clasping his hands, making it look as if he were praying. His demeanor on the stand was “as though he were discussing a bad day on the golf course”. The federal prosecutor would use words like “backing down” and “shutting down” to discuss the history of Ovitz’s failed management and production company AMG, and Ovitz kept responding in a way designed to mitigate the damaging impression that was left about his business prowess.

Assistant U.S. Attorney Daniel Saunders himself questioned Ovitz. Asked he’d been one of the founders of Creative Artists, Ovitz said yes and noted that he’d left after 21 years. (As has been the case throughout the Pellicano trial, I’ve tried to reconstruct today’s testimony from the notes of my trial correspondent, Steven Mikulan of LA Weekly. But there is always the possibility of inexact language).

Q: Did you hire Bryan Lourd and Kevin Huvane?
A: Yes.

Ovitz was asked very briefly about his Disney tenure, and then the subject came up of Artists Management Group, the short-lived management and production company which Ovitz founded in 1998. Saunders zeroed in on AMG’s problems.

Q. In the summer of 2001, did you lose an investor?
A. AT&T backed out of the deal. They had a conflict.

Ovitz then explained that AT&T was “up for licensing” and it would have looked bad for the carrier if it was seen as going into a business with a company that involved production in both TV and the Internet.

Q. Were a large part of AMG’s staff laid off [because the AT&T investment never took place]?
A. Not right away.
Q. What was happening in early 2002?
A. By early 2002, we were reeling from having to shut down the television group.

Saunders then focused on a very touchy subject for Ovitz: that February 2002 audit of the film unit of AMG, Artists Production Group, conducted by Vivendi Universal, the parent company of Canal Plus. Back in 2000, Ovitz’s firm entered into a 3-year venture with the production arm of Canal Plus, StudioCanal to make 12 to 15 films. No films were produced under the deal, nevertheless Canal Plus provided $8 million a year to APG: $4 million for development costs and $4 million for overhead.

ovitz-leaving-trial-200.jpgSaid Ovitz, “I don’t think they [Canal Plus] pulled out of the agreement because of the audit. Because the audit found no wrongdoing.” He may say that now. But, according to a March 22nd, 2002, New York Times article co-bylined by then freelance writer Anita Busch and staff writer Bernard Weinraub, “At issue is at least $1 million to $2 million allocated for films that may have been used for other expenses. ‘Money is missing — the facts are the facts,’ said one executive engaged in the audit. ‘We’re trying to figure it out.’ ” Canal Plus pulled out of the deal with Ovitz’s APG.

By this time, Saunders established in court, Ovitz was trying to find buyers for AMG. He testified that one possiblity was Paradigm, the talent agency owned by Sam Gores, and the other was The Firm, a management and production company run by Jeff Kwatinetz.

Q. Was it during this time that AMG hired defendant Anthony Pellicano?
A. One of my law firms retained Anthony Pellicano.

Ovitz identified the law firm as Gorry, Meyer & Rudd. At the time, Ovitz testified, he was engulfed in three litigations. Saunders asked about one of them involving former AMG exec Arthur Bernier, who was in the process of suing Ovitz for wrongful termination. The feds charge that Pellicano ordered an illegal law enforcement database check on Bernier in May 2002.

Q. Do you know what was asked of defendant Pellicano in the Bernier matter?
A. No.

Another lawsuit was brought by sports agent James Casey who sued Ovitz and Artists Management for $450,000 over a disputed finder’s fee regarding Boston Celtics basketball star, Paul Pierce. The feds charge that Pellicano ordered an illegal law enforcement database probe done on Casey, too.

Q. Do you know what was asked of defendant Pellicano in the Casey matter?
A. I don’t know who he was. To this day, I don’t know who he is or what he does. The reason why Pellicano was hired was because Casey had sued AMG but they couldn’t find him.

trial-logo-smaller.jpgOn the third litigation, a trademark infringement case brought by Advantage Management Group, Ovitz explained how Pellicano “was extraordinarily helpful in negotiating the matter. He had a relationship with opposing counsel.”

Ovitz was shown Exhibit 413 consisting of copies of three checks all written on May 14, 2002 by Gorry, Meyer & Rudd to Pellicano.

Asked about the significance of that date, May 14, 2002, Ovitz replied at first, ”I don’t know about the timing.” But he proceeded to state that he did have an offer for AMG the deal was “we were already in escrow”. Ovitz subsequently sold AMG to The Firm.

Q. Did you have conversations with defendant Pellicano?
A. Yes.

Asked by Saunders if he had ”any concerns about negative publicity”, Ovitz replied that the NYT publicity surrounding AMG made it “more than difficult” to sell the business.

Q. Did you and defendant Pellicano discuss who was involved in this negative publicity?
A. Yes.
Q. Did that involve Anita Busch?
A. Yes.
Q. Did that also include Bernard Weinraub?
A. Yes. Mr. Weinraub spent 20 years writing articles about me.

Then Saunders asked if he discussed with Pellicano that might be “embarrassing.” But Ovitz didn’t answer directly. “It was an extraordinarily difficult time for me in the company. Rumors and innuendos were fueled by these negative articles. There were tensions among the partners. It was wildly embarrassing for me and my family. All I wanted was a graceful exit from this business.”

Ovitz also testified that he didn’t use the information which Pellicano provided him.

Q. What did you do with the information?
A. It was information that was extremely helpful to me, but I couldn’t speculate on what I would have done with it.
Q. What were the benefits that you saw in this?
A. I would get information, and Pellicano would get money. I assumed he had information that would be helpful for me to get to the finish line of this deal. I wanted any kind of information.

Ovitz said he made cash payments totalling approximately $75,000 to Pellicano through the end of 2002. (This was in addition to the $75,000 paid by his law firm to the P.I.) Ovitz verified that Pellicano in April 2002 gave him a code name — “Gaspar” — but said he didn’t know whether the name itself had any significance.

Then Ovitz was cross-examined by Chad Hummel, who established that the audiotape played in court this morning was recorded on April 11, 2002. And yet Exhibit 68 shows the three law firm checks to Pellicano dated May 14, 2002. So the checks were dated after Ovitz’s conversation with Pellicano. Hummel made the point that Ovitz first called Pellicano a month before the law firm ever got involved with the P.I. on behalf of Ovitz.

Ovitz: I called him because I knew he was sourcing the articles. Not the people writing the articles. He knew a substantial number of people in the West Los Angeles business community. He was working with people I was having problems with — Ron Meyer, David Geffen.
Q: Did you believe these two individuals were sourcing the articles?
A: I did.
Q: What did you want to know?
A: When I was going to be ambushed. When the other shoe was going to drop… He told me I had a huge problem with Ron Meyer.

Hummel asked Ovitz what he meant by the word “campus” heard on the audiotape played in court. Replied the one-time mogul: “The campus is what I had always referred to for the past 40 years as the entertainment business. It’s like a high school.”

Also about the audiotape, Hummel queried:

Q. Isn’t it true that you poured your heart out to him [Pellicano]?
A. I did.

Hummel also questioned Ovitz on the subjects of Anita Busch and Bernie Weinraub:

Q. Did he [Pellicano] give you embarrassing information about Anita Busch?
A. No. He was rather dismissive of her.
Q. Did he give you embarrassing information about Bernard Weinraub?
A. No.
Q: Did you ever hire Mr. Pellicano to put a fish on Anita Busch’s car?
A: Absolutely not.

Later Ovitz said about Pellicano, “I assumed what he did was legal.”

Then there was this peculiar exchange:

Q. Was it your perception that the government or the FBI was threatening you?
A. Do you mean that Mr. Saunders was going to come up and hit me?
Q. Did Mr. Saunders try to put words in your mouth?
A. No. He told me to tell the truth. I testified to the best of my ability.
Q. Were you threatened with prosecution if you didn’t testify in this case?
A. No.

The jury looked especially attentive to Hummel’s entire cross-examination with Ovitz. At 10:05 AM, Saunders did re-direct to basically ask Ovitz if he was telling the truth.

Anita Busch and Bernie Weinraub testimony will be posted shortly…

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