Media Money with Julia Boorstin

Hollywood's day in Federal Court

It sounds like a really good John Grisham book -- studio moguls, movie stars, wiretapping, police bribery. Only in Hollywood could a federal case be this juicy. After years of grand jury testimony, the trial of Anthony Pellicano, erstwhile private eye-to-the-stars, starts this week. Jury selection is underway in downtown Los Angeles.

Pellicano -- since firing his attorney -- is representing himself. The charges are fraud, racketeering and conspiracy. He allegedly wiretapped and bribed a range of officials, including police officers, to get confidential information. Some of Hollywood's biggest names are connected with the trial. Pellicano did work for Bert Fields, a famous Hollywood attorney, Paramount Pictures chief Brad Grey, and CAA founder Michael Ovitz. None of them have been charged, and I don't think their association with Pellicano will touch any of their reputations. That being said, they could have to take the stand, which would not be ideal from any of their perspectives. Oh, and when it comes to evidence, the jury will be plenty entertained. Sylvester Stallone and Chris Rock were among those allegedly spied on -- so they will feature prominently in the testimony.

There's another Pellicano-related case with a name CNBC-watchers will recognize: billionaire Kirk Kerkorian. Entertainment Attorney Terry Christensen was indicted on charges that he hired Pellicano to wiretap the ex-wife of his longtime client Kerkorian, Lisa Kerkorian, during a high-profile child-support case.

Sure, this makes Hollywood sound like the destination for the worst kind of sleaze. And yes, maybe this is the biggest wiretapping case ever. But entertainment isn't the only industry where snooping crosses the line. At the end of 2006 Hewlett Packard got wrapped up in a scandal about an investigator the company hired. It faced allegations that the investigators impersonated reporters, board members and employees to obtain private phone records. They just settled the case last month.

I had an interesting conversation with the head of Kroll's LA office. The risk consulting firm does a lot of work for Fortune 500 companies, and they can get tons of information-- all legally. He said that companies are increasingly hiring private investigators for everything from checking out a candidate for a board seat, to competitive surveillance. But companies want to be careful -- if their investigators obtain information improperly, as one did when going through Disney's trash in the Winnie the Pooh licensing case -- the evidence and the case risk getting thrown out of court.

Questions?  Comments?