James Brown’s rocky road to wealth: Financial turmoil part of ‘Godfather’ legend

Credit: AJC

Credit: AJC

Augusta — With a catalog of 750 songs ranging over 50 years, James Brown embodied consistency.

“The Hardest-Working Man in Show Business” pulled in an estimated $80 million a year in his prime some 30 years ago, a daunting sum drawn by just a handful of superstars.

But while Brown’s rags-to-riches story is epic, his legal and financial troubles provided a sobering back beat to his tale.

Those who knew the mercurial music legend who died Christmas Day at age 73 said his money woes — IRS liens, loan defaults, royalty disputes with band members and family — stemmed from a combination of his excessive generosity, personal and legal problems and having to pull a large sled with dozens of employees counting on him.

His financial worth at the end of his amazing life is a figure guarded by his closest advisers, who say Brown was on a financial upswing.

“It could be very hard to guess how much James Brown has made and lost over the years,” said Bob Young, a former Augusta mayor who also worked as a disc jockey and news anchor and was a friend of Brown.

He said Brown was an entertainer ahead of his time in accumulating assets like private airplanes, a production company and radio stations. But he was later forced to sell those assets.

“His business acumen — or lack thereof — is part of the total package,” Young said.

Those who know him said his empire was spread too thin; he had too many hands reaching for money; and he just made some poor decisions.

And then there were his spending habits. In 1968, rock critic Albert Goldman wrote that Brown owned “500 suits, 300 pairs of shoes, a silver gray Rolls-Royce, a Cadillac convertible, an Eldorado, an Oldsmobile Toronado, a Rambler saloon, a twin-engined Learjet and a moated castle in Queens, New York City.”

The superstar’s troubles with the IRS started early.

When Fred Daviss met Brown in 1969, the singer had a tax problem brewing with the Internal Revenue Service to the tune of $4.5 million.

“It eventually grew to $17.5 million; we did a deal with the IRS and wiped it off the books,” said Daviss, Brown’s comptroller for 16 years. He said the agreement, reached in the early or mid-1980s, was that “he pay his taxes in a timely manner.”

That didn’t happen, and his problems with the tax man continued. In fact, because of the new tax problems, old debts were added back to the ledger by the IRS, Daviss said.

In 1998, Brown paid more than $6 million in back taxes to the IRS, much of it dated back to the early 1970s, according to court records in Aiken, S.C.

Soon, he owed more back taxes. And then he paid those. “We methodically dealt with all that,” said Buddy Dallas, Brown’s longtime attorney. “It’s all clear now. He’s paid all his taxes; $28 million is cleared.”

Music earnings continue

Dallas represented Brown for 24 years after meeting him at a political reception. He said Brown was taken advantage of by handlers earlier in his career but finally “caught on” and became a better steward of his money.

He said Brown’s finances had gotten on solid ground and his songs will continue to earn money. For example, more than 80 James Brown songs are available as cellphone ring tones, said Dallas, whose phone intones “It’s a Man’s Man’s Man’s World.”

Elvis Presley’s estate, for instance, continues to make millions of dollars almost 30 years after his death. Brown’s estate should do the same, music analysts say, especially since many hip-hop artists incorporate cuts of Brown’s music into their recordings.

“We’re still managing him,” said Frank Copsidas, Brown’s agent. “There’s a lot to do. He still has a catalog. People want to use his music.

Dallas said Brown never fixated on his earnings. He saw his music and business endeavors as a mission and a responsibility.

“It was keeping 40 people on his payroll; it was keeping a livelihood for his band and their families,” he said. “He didn’t have to leave his home if he didn’t want to. But he enjoyed the stage and the adulation.”

Dallas steered the music legend through rough stretches.

In 1985, the IRS seized Brown’s Beech Island, S.C. estate for unpaid taxes and, according to deed records, Dallas purchased it at auction.

Fifteen years later, in 2000, Dallas deeded the home and 40 acres back to the Irrevocable Trust Agreement of James Brown, which was set up that year.

The trust was established to protect Brown’s assets, including his estate and James Brown Enterprises, his business arm. In establishing the trust, Brown turned over control of his assets to the trust, which upon his death was to provide education funds for his grandchildren and needy children.

Dallas was listed as one of its three trustees, as are business manager/accountant David Cannon and Alford “Judge” Bradley, a former South Carolina magistrate. The trust and a separate power-of-attorney grant Dallas and Cannon broad authority. The trust says that payments “shall be made in the trustee(s)’s absolute and sole discretion.” That included payments to Brown. In essence, the trust arrangement, which is not uncommon, protected James Brown’s assets, even from James Brown.

The trust provides “an orderly transition for his legacy,” said Dallas. It was set up a year after Brown entered into an unusual agreement with New York financier David Pullman to raise $26 million against future royalties.

With the deal, Brown pocketed a lump sum in exchange for future royalties and licensing fees that would pay the bondholders 7.98 percent for several years, according to Bloomberg News.

‘He was streetwise’

The influx of bond money did not end Brown’s money problems.

In 2000, his trust bought an empty bank building on Broad Street, Augusta’s main drag, for nearly $1 million. The soaring modernistic building was to be an office and recording studio.

The following year, the building was in default and Southtrust Bank sued.

In 2003, a judge in South Carolina ordered that a 1999 Lincoln Town Car owned by James Brown Enterprises be seized for nonpayment. The order was dismissed two months later when the “vehicle was recovered” by the credit company.

Despite his financial problems, those who know Brown say he had a knack for business.

“He had a grade-school education but he was streetwise,” former comptroller Daviss said. “James Brown knew how the pie was cut up. He knew where the nooks and crannies were.”

Bobby Byrd, whose gospel group gave Brown his start in the 1950s, said Brown “was a good businessman. But the money went every which way. He was just spread so many different ways.”

Byrd sang at Brown’s funeral with his wife, Vicki Anderson, but he sued Brown four years ago to get royalties for songs he said he wrote but was never paid for. The suit was thrown out for a lack of timeliness, he said.

“James would say, ‘Byrd, you have a lot of money coming, a lot of money.’ But I never got it,” Byrd said.

Anderson last week insisted Brown “has got a lot of money. James just don’t like to pay bills. Trust me, he’s nowhere near broke.” Later, she said of Brown and their early business dealings: “He messed us up. We wasn’t done right.”

On top of the complicated financial layers, Brown’s own personal habits — especially his recurrent drug problems — were a drain.

Lawsuits indicate Brown could be loose with money and suspicious of those around him. He paid a woman a $10,000 a month retainer to act as his personal physician, according to a 2001 suit filed in Augusta.

And in court papers filed in 1998 in South Carolina, he said he gave $35,000 — for an undisclosed reason — to a woman who spent two days at his house with him.

The woman — Mary Simons, a former counselor for Brown — said in the same suit, which accused him of kidnapping her, that Brown behaved erratically during her stay, threatening her with a gun and talking about getting even with people who had stolen from him.

Soon after the alleged incident, Brown’s daughter committed him to a drug rehab center.

Four years later, in 2002, Brown’s two daughters sued him, saying they were not getting royalties from songs whose rights had been given to them decades earlier. The suit was settled and Brown and his daughters made up, said Gregory Reed, the daughters’ lawyer.

Joel Katz, Brown’s entertainment lawyer, who knew the singer for 35 years, said, “Brown reached out and helped a lot of people. He gave away a lot of money.”

Dallas maintains Brown’s success was more remarkable in the face of his troubles.

“He got knocked down, but he got back up,” he said. “He was given every reason in the world to quit, but he didn’t.”