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Last Updated: Friday, 30 June 2006, 05:20 GMT 06:20 UK
Jackson video screened in court
Michael Jackson
Jackson is not expected to appear in court
Michael Jackson says he believed he had paid a former business associate who is suing the pop star for $3.8m (2.1m).

The statement was part of videotaped testimony shown to the California jury during the second day of the trial.

But the lawyer for video producer Marc Schaffel told the jury Mr Jackson frequently claimed he could not remember details of his own finances.

Mr Jackson, who is counter-suing, is not expected to appear in court as he currently lives in Bahrain.

The BBC's Peter Bowes in Los Angeles says the trial will mainly be about financial transactions and accounting.

But he says more snippets of information about the unusual world of the singer may emerge.

'He seemed happy'

Mr Schaffel worked on a charity song for the star, which was never released, and two TV documentaries planned to portray the singer in a good light following the furore that followed the British TV documentary Living With Michael Jackson.

He says he is still owed money for those productions, as well as for expenses and loans that were not repaid.

Marc Schaffel
Jackson's lawyer accused Schaffel of greed

The pop star has filed a counter-claim that Marc Schaffel failed to pay costs from the song production and kept sculptures and paintings worth $250,000 (138,000).

In portions of a video-taped deposition recorded last September and shown to the jury on Thursday by his opponent's lawyer, Mr Jackson says: "I'm sure he got money."

Asked how he could be so sure, he said: "Because he always seemed to be happy."

Mr Schaffel's lawyer Howard King responded: "Money doesn't buy happiness."

Mr Jackson's lawyer, Thomas Mundell, said his client had hired Mr Schaffel to produce the charity record but severed ties with him after learning he had no record industry expertise and was a producer of gay pornography.

But Mr King downplayed Mr Schaffel's business background on Thursday, insisting it included "legal adult entertainment... In 2000 he was done with that and he began to work with Mr. Jackson", he said.

He said he would call a number of former associates of the star to testify to his disordered approach to his finances.

Counter claims

Mr Mundell, meanwhile, claimed Mr Schaffel actually owed Mr Jackson hundreds of thousands of dollars, and that large sums of money delivered to Mr Jackson by Mr Schaffel were actually wire transfers from other people.

He said Mr Schaffel was a normally meticulous record-keeper, but had no receipts to attest to his transactions with Mr Jackson.

"The evidence will show Mr Schaffel should have left well enough alone," he said.

"He could have gotten away with a chunk of money from Michael Jackson... but he sued for several million dollars."

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