Former Jackson Associate Speaks Out

A former associate of Michael Jackson says "The King of Pop" sometimes called him in the middle of the night while high on drugs to ask for money and that the beleaguered singer is a "ticking financial bomb."

On Tuesday, Marc Schaffel, a reputed porn producer and one-time Jackson confidant, filed a lawsuit in Los Angeles Superior Court against Jackson seeking more than $3 million for alleged breach of contract and other agreements. In his lawsuit, Schaffel alleges the entertainer is broke and has had problems with drugs and lavish spending.

In his complaint, which was obtained by ABC News, Schaffel says the pop star's need to borrow money "accelerated when Jackson's increasingly more frequent excessive use of drugs and alcohol impelled him into irrational demands for large amounts of money and extravagant possessions." In an exclusive interview with ABC News' senior legal correspondent Cynthia McFadden on "Good Morning America," Schaffel speculated that Jackson has a dependency on painkillers and pain medication and said the singer would call him in the middle of the night seeking loans for one of his spending sprees.

"When Michael would be on drugs, he would call two, three, four in the morning, very distorted," Schaffel said. "And he would say, 'Oh, can you give me $70,000 tomorrow? There's this table I saw. I gotta have it for my living room."

Handouts to Famous Friends

Jackson, 46, is set to face trial in late January for allegedly molesting a now-14-year-old boy who spent time at his Neverland ranch. The alleged victim is believed to be a cancer survivor who appeared with Jackson in the British documentary "Living With Michael Jackson." Jackson has pleaded not guilty to 10 charges that include felony conspiracy with 28 overt acts involving child abduction, false imprisonment and extortion. The conspiracy charge against Jackson refers to his alleged attempts through five associates to quiet the alleged victim and his family after the documentary aired early last year.

One of the unindicted alleged co-conspirators is Schaffel. Prosecutors in Santa Barbara, Calif., allege Schaffel and other associates played various roles in surveilling the alleged victim's family, taking the boy and his siblings out of school and making them virtual prisoners of Jackson.

Schaffel would not comment on any aspect of the molestation case against Jackson. But he claims Jackson was devastated by "Living With Michael Jackson" and asked him to oversee the creation of a rebuttal TV special that aired on Fox. The British documentary also showed Jackson on a lavish shopping spree in Las Vegas, spending hundreds of thousands of dollars on ornate urns and other objects.

Jackson, Schaffel said, failed to pay him for his work and has failed to reimburse him for money he lent him to shop, pay bodyguards and pay delinquent agreements to avoid lawsuits. Jackson, he said, also borrowed money to pay friends, such as the late actor Marlon Brando, to appear in a video and on his TV special in the summer of 2001 and to buy a $600,000 piece of jewelry for Elizabeth Taylor so she would agree to sign a release agreement to use video of her on another TV special, "Michael Jackson's Private Home Movies."

"Michael had come back and said that Liz wanted this piece of jewelry that she had picked out in order to sign the release," Schaffel said.

Jackson Camp Discredits Pornographer

Schaffel also said Jackson was very careless and generous with money and that it was not uncommon for him to give friends $10,000 handouts.

"He would be with a group of friends in Vegas and give them wads of $10,000 each and say go get busy and buy things and get some stuff," Schaffel said.

Jackson spokeswoman Raymone Bain denied Schaffel's allegations and told ABC News' "Good Morning America" that they question the timing and validity of his "slanderous" statements. Jackson's representatives also said Schaffel's words cannot be trusted because of his reputation as a pornographer. However, Schaffel pointed out that Jackson had no problem trusting him at one time.

"They didn't say that when they needed things from me," he said.

Schaffel's lawsuit says he has had a business relationship with Jackson since 2000 and that he created Neverland Valley Entertainment with Jackson. He says he "was at all times a loyal and devoted associate and confidant" of Jackson and feels "betrayed" by the pop legend. He says Jackson stopped paying him in June 2004 as his financial representatives claimed he was broke.

Schaffel wants to get reimbursed for his work while he still can -- especially if Jackson has severe financial woes. "He is a ticking financial bomb," he said.

Jackson's former associate also said he is writing a tell-all book about his relationship with the singer.

News of the apparent breach between Jackson and one of his associates came as a boxed set of the singer's greatest hits spanning his entire career, "Michael Jackson: The Ultimate Collection," was released Tuesday.

Jury selection in Jackson's child molestation is expected to begin Jan. 31.

ABC News' Eileen Murphy, Santina Leuci and Eric Avram contributed to this report.

Comments