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Howard Stutz

Denials by MGM's Kerkorian challenged

25 September 2009

LAS VEGAS, Nevada -- A federal judge in Los Angeles believes MGM Mirage majority shareholder Kirk Kerkorian knew a now-convicted Hollywood private eye was illegally wiretapping his ex-wife during their child custody dispute.

However, it doesn't appear that Kerkorian, a 92-year-old Los Angeles billionaire who was never charged in the case, will face criminal prosecution.

The statements were part of a 2008 order issued by U.S. District Judge Dale Fischer, which was recently unsealed and surfaced in connection with a Los Angeles state court lawsuit.

Kerkorian is considered one of the founders of modern Las Vegas, having built the MGM Grand and spurred the expansion of MGM Mirage.

Kerkorian negotiated the $6.4 billion buyout of Mirage Resorts to then-MGM Grand Corp. in 2000 and regularly consults with company executives on various matters.

Kerkorian is still an active member of the MGM Mirage board of directors. He currently controls 43 percent of MGM Mirage's outstanding shares. Kerkorian had owned 53.8 percent of the company until May when MGM Mirage completed a $2.6 billion restructuring package that kept the casino operator from filing bankruptcy.

Nevada Gaming Control Board Chairman Dennis Neilander said Thursday he was withholding comment until he had a chance to further review the matter.

Kerkorian's personal wealth has taken a hit during the recession. In March, Forbes magazine dropped him from 41st to 98th on its list of the world's richest people. His stake in MGM Mirage at the time, once valued at $15 billion, had shrunk to less than $400 million.

Kerkorian has repeatedly denied knowing that his attorney, former MGM Mirage board member Terry Christensen, and celebrity private investigator Anthony Pellicano, had tapped the phone of his ex-wife, Lisa Bonder Kerkorian, in 2002. Christensen resigned from the MGM board when he was indicted in 2005.

Christensen and Pellicano were convicted in a criminal trial last year and sentenced to federal prison for their roles in the wire tapping. Christensen was given a three-year prison term while Pellicano was sentenced to 15 years. Kerkorian testified in the case.

Reuters news service reported that Fischer, who oversaw the trial, said there was "reasonable cause to believe that (Kerkorian) was" complicit in their illegal conduct, according to court documents.

"Because the conversations are not privileged, the Court need not decide whether Kerkorian was complicit in the alleged illegal conduct," Fischer wrote in the opinion, according to Reuters. "However, the communications themselves provide a reasonable cause to believe that he was."

The judge noted that recordings show Christensen "does not deny that he is telling Kerkorian what Pellicano is hearing" on the wiretaps, Reuters reported.

Both a spokeswoman for Kerkorian's Tracinda Corp., his privately held investment arm, and a spokesman for MGM Mirage, declined comment.

Christensen was a 35-year confidant, personal attorney and adviser of Kerkorian and had been on the MGM Mirage board since Aug. 1, 1987, when he resigned in February 2006. He spent a year as president of Tracinda in 1987, helped form MGM Grand Air and MGM Grand Corp.

He was alleged to have sought details about Bonder Kerkorian during the high-profile legal battle with her former husband over child support in 2002.

Bonder Kerkorian wanted $320,000 a month from Kerkorian to support her then 4-year-old daughter, but she later admitted that she faked a DNA paternity test by using saliva she obtained from Kerkorian's adult daughter.

A judge later ruled that the child was entitled to $50,316 a month.

Kerkorian had a decade-long romantic relationship with Bonder Kerkorian, but they were married for only a month in 1999.

Prosecutors claimed Christensen paid Pellicano at least $100,000 to illegally wiretap the phones of Bonder Kerkorian.

MGM Mirage is facing a licensing hearing in front of New Jersey gaming regulators over the company's suitability to hold a gaming license in the state because of its Macau joint venture partnership with Pansy Ho, daughter of casino magnate Stanley Ho, who is alleged to have ties to organized crime.

Observers speculated the Kerkorian matter could now be an issue for the New Jersey Casino Control Commission.

"I'm sure the Division of Gaming Enforcement is aware of the litigation and will review the matter and report to us at the appropriate time," commission spokesman Dan Heneghan said Thursday.

Denials by MGM's Kerkorian challenged is republished from