Questions Shadow New Jackson Adviser

New York Times/January 2, 2004
By Sharon Waxman

Los Angeles -- Leonard Muhammad, a man whom friends, employees and business associates of Michael Jackson say is running many of the pop star's affairs, has a history of failed businesses, fraud allegations and unpaid tax bills behind him.

According to State of Illinois public records, Mr. Muhammad, chief of staff and son-in-law of the Nation of Islam's leader, Louis Farrakhan, ran a series of companies in the 1990's that were dissolved by the state in recent years for failure to file proper documents or to pay back taxes, among them Nationway Ventures International Ltd., DiNar Products and Economic Solutions Inc.

Earlier investigations, by The Chicago Tribune in 1995 and The Washington Post in 1996, found that Mr. Muhammad helped run a company that sold an unproven treatment for AIDS in poor Chicago neighborhoods and ran companies producing and selling soaps, shampoos and other toiletries - including one called POWER Inc. - that were chased by tax authorities and creditors for hundreds of thousands of dollars.

Since then Mr. Muhammad, 58, has been principally responsible for the Nation of Islam's economic development programs. In the last six weeks he has become a close adviser to Mr. Jackson, who faces charges of child molestation.

Numerous friends, advisers and business associates of Mr. Jackson said Mr. Muhammad was guiding media, business and legal strategy for the singer and controlled access to him. Mark Geragos, Mr. Jackson's lawyer, has denied the assertion, saying that Mr. Muhammad was one of many advisers in Mr. Jackson's camp. Mr. Muhammad declined to respond to repeated requests for comment on Friday.

Mr. Muhammad hung up on a reporter who called on Friday to verify his business history and request comment. An associate later called back to say that Mr. Muhammad would be in touch. As of Friday evening he had not returned further calls.

Born Leonard Searcy in 1945, Mr. Muhammad married Donna Farrakhan, Mr. Farrakhan's daughter, in 1983, and changed his name to Leonard Farrakhan Muhammad.

In 1996 The Washington Post reported that Mr. Muhammad ran a series of toiletry companies that records indicated owed a total of $226,949 to creditors and tax authorities.

The Tribune reported that Mr. Muhammad was listed as an officer of a company that sold interferon as an anti-AIDS drug in African-American neighborhoods in Chicago in the early- to mid-1990's. The company, Per Ankh Inc., advertised in The Final Call, the Nation of Islam's newspaper, and was promoted vigorously by group leaders from the mosque podium. Doctors at the time called the treatment ineffectual and criticized the company for giving false hope to those dying of the disease.

According to public records Mr. Muhammad and his wife were sued in 1999 by South Shore Bank in a foreclosure action on a Chicago property for an unpaid mortgage balance of $34,699.52.

Born in Arkansas, Mr. Muhammad ran a Chicago tavern in the 1970's. In 1979 he started a health clinic in Chicago with a city contract to give checkups to children in the Head Start program.

The Tribune reported in 1995 that records showed the city chose not to renew the contract because of complaints from parents and Head Start directors who said that doctors gave cursory examinations that missed obvious ailments, or sometimes did not show up to examine children at all.

Mr. Muhammad then opened two Popeyes fried chicken restaurants in 1981 by taking $43,000 from the clinic's accounts, The Tribune reported. The restaurants went bankrupt within a few years, with Mr. Muhammad owing hundreds of thousands of dollars to banks and tax authorities.

South Shore Bank filed court papers accusing Mr. Muhammad of "fraud, dishonesty, incompetence and gross mismanagement" in running his chicken business, and a judge then ordered Mr. Muhammad to stop paying himself and his relatives out of the business.

Illinois state records show that Mr. Muhammad has frequently changed the name of his companies after tax liens or notices of delinquency were served by the state, and continued operating under other names.

Thus the real estate management firm Nationway Ventures International Ltd., dissolved by the state in 1994, continued to operate at the same address under the name Nationway Ventures International Group Inc. Similarly, New Life Self-Development Company, registered in 1993, was reconstituted in 1995 under the name New Life Self-Development Group Ltd.

DiNar Products was dissolved by the state in April 2001 for failure to file proper business documents, state records show.

Mr. Jackson is believed to have severe financial difficulties because of an expensive lifestyle that burns through $2 million to $3 million a month, current and former advisers say. His principal source of income is believed to be the Jackson and Beatles music catalog, to which he owns the rights.