A look at secret negotiations in Mel Gibson case as detectives wrap investigation

Mel Gibson’s entertainment attorney was summoned to a meeting 11 months ago in Century City and presented with two troubling pieces of information: The movie star’s estranged girlfriend had secretly recorded him in a series of vulgar, racist rants, and she wanted $20 million.

Attorneys for the woman, Oksana Grigorieva, a Russian musician and the mother of Gibson’s daughter, played excerpts of the recordings. Notes made by the actor’s attorney suggested her lawyers wanted to resolve the couple’s differences confidentially and keep the tapes private: “Never should become public. Devastating to everyone — including baby.”

Whether that encounter was part of an extortion plot or just hardball legal negotiation is a question for Los Angeles County prosecutors, according to Sheriff’s Department spokesman Steve Whitmore. Detectives handed their findings to the district attorney’s office Wednesday, he said. Prosecutors will evaluate that evidence at the same time that they weigh domestic violence allegations against Gibson.

Materials reviewed by the Los Angeles Times, including e-mails, text messages, attorneys’ notes and legal papers, provide a rare in-depth look at secret negotiations in a case that has obsessed the tabloids, prompted a six-month sheriff’s investigation and taken up countless hours of court time. The unraveling of these high-stakes backroom talks led to one of Hollywood’s ugliest splits and, with the leak of the tapes online, the derailing of Gibson’s attempt at a comeback following a 2006 drunk driving arrest during which he spewed anti-Semitic insults.

The documents describe a period in which the former lovers discussed reconciliation even as their lawyers sparred over the details of a settlement that would include destruction of the tapes.

“You don’t call. You don’t accept my invitation to come. You hand tapes around & jeopardize us all,” Gibson texted the same day his lawyers proposed a deal they valued at $18 million.

She replied that Gibson had promised to care for her and their daughter “in the most generous way.”

“I wouldn’t have played ur messages if u were keeping ur word,” she wrote.

Last May, they reached a $16-million agreement. Grigorieva subsequently repudiated it, saying she had signed under duress. The case is now in family court, where the judge has urged the sides not to speak publicly after months of leaks from the sealed case to gossip sites. Attorneys contacted by The Times declined to comment or did not return calls.

Grigorieva and Gibson began dating three years ago while he was still married to his wife, Robyn, who filed for divorce after Grigorieva’s pregnancy become public. The singer already had a child with actor Timothy Dalton.

Last February, Grigorieva sought a lawyer after Gibson told her she needed representation because he was preparing to add the baby, Lucia, to his estate plan, according to two people familiar with the situation. The singer was not entitled to any of the actor’s fortune under the terms of a 2009 cohabitation agreement that said she would get only a year’s free rent in a Sherman Oaks home Gibson owned and a Dodge Charger if they split.

The tapes and pictures she brought to her attorney, Eric George, suggested that Lucia’s trust fund was not the only issue. Grigorieva had photos of broken teeth from a January incident in which she said Gibson punched her twice and brandished a gun. The now-infamous tapes captured Gibson’s anger and bigotry and a potential admission to assault when he told her, “You deserved it.”

George was no stranger to high-profile matters. The son of the state’s former chief justice, George had represented Michael Jackson’s ex-wife in custody negotiations. He told Grigorieva that he was prepared to draw up a lawsuit against Gibson but that his plan was to resolve the matter “very quickly, through negotiation.”

“It is my aim to do so — and you share this aim — in such a manner as to ensure complete confidentiality, absolutely no press coverage and a principled way of handling such that you and MG may, should you wish, maintain a relationship together,” he wrote in a retainer letter. He explained that his firm and the attorney who had referred her to him, Joseph Cotchett, would each get a 5% contingency fee.

Before Grigorieva officially hired George, the lawyer discussed making a $20-million demand, according to e-mails they exchanged. The singer instructed him not to reveal a dollar figure to Gibson’s lawyers right away. “I’m just really fearful that would turn him angry and will end this” relationship, she wrote.

George agreed but added, “If his proposal is completely absurd, I’ll offer my opinion that it’s unrealistic, as I don’t want to create any false impression u can be bought off for pennies.”

Five days later, George met with Gibson’s estate planning attorney, Michele Mulrooney. Her notes indicate that the conversation was vague when it came to what evidence Grigorieva had and how much money she wanted.

“Only a substantial sum was mentioned several times — would ruin his career if the evidence got out,” Mulrooney wrote.

The next day, George played snippets of the tapes for Gibson’s entertainment lawyer, Thomas Hansen. “$10M for her, including child support. $10M for Lucia. ... Give guarantee of mouth shut,” Hansen wrote in his notes.

Gibson’s side viewed the situation as extortion and consulted a criminal attorney, a source familiar with the talks said. The line between extortion and aggressive settlement negotiations can be fuzzy, experts said, but in general, threatening civil litigation to get a financial settlement is legal, while threatening criminal prosecution or public disgrace is not.

The attorney Gibson’s side consulted agreed that the actor was being extorted but warned that if he pressed charges, the tapes would become public — probably within days, the source said. From a public-relations standpoint, the timing couldn’t have been worse. Gibson was trying to reclaim a place in Hollywood. He had a movie — “Edge of Darkness” — in theaters, had just finished a film with Jodie Foster and was in talks to direct Leonardo DiCaprio in a Viking epic. Tapes of him enraged and hurling racial epithets would ruin any chance of a comeback. His camp decided to pay, the source said.

Gibson’s attorneys made a proposal six days later — an $18-million package for Lucia, who is now 16 months old, and Grigorieva, paid out over two decades. It included cash, child-support payments, life insurance on Gibson, a college fund and the house. The couple would share custody. The photographs and recordings would be locked in a safe deposit box that required a court order or the signatures of George and Hansen to be opened.

Texting Gibson that night, Grigorieva appeared unaware of the $18-million proposal but complained that past proposals to provide for Lucia were less generous than those for his seven other children. “U threated [sic] her as an illegitimate child. That’s why I played the tapes,” she wrote.

Gibson told her not to “let the lawyers run you. … They always do this. They wrangle. Get us mad and they make more money.”

A few days later, her lawyers countered with a $26-million package that gave Grigorieva custody of their child, with Gibson entitled to “reasonable” visitation.

With the proposals far apart, the sides set a May mediation.

In the meantime, Gibson and Grigorieva continued communicating. When she traveled to Russia in April, Gibson e-mailed that he had given Lucia a glow-in-the-dark rosary. “I have said prayers for you too,” he wrote.

In a May 2 e-mail, Grigorieva offered explanations for the recordings, writing first that she wanted Gibson to “hear for yourself what you sound like once you are enraged” and later describing the tapes as insurance against potential attempts by Gibson’s entourage to “tarnish my reputation in order not take care of me financially and take the baby away.”

“If not for these recorded messages, you and your loyal people would have used any dirty trick they could,” she wrote.

Two weeks later, the parties gathered in a downtown L.A. law office with two retired judges as mediators. Grigorieva’s team threatened an embarrassing civil suit with the tapes as evidence. Gibson’s attorneys said they would have her prosecuted for illegally recording him.

They reached an agreement that spanned 20 years and amounted to nearly $11 million for Lucia and more than $5 million for Grigorieva, who would also get a Steinway piano from Gibson’s Malibu home. Custody was to be split. The deal required that “all evidence” — a reference to the photos and recordings — “be destroyed in a manner agreed upon both parties.”

After two days, they reached an agreement. “Hopefully it won’t fall apart,” retired judge Enrique Romero wrote to George.

But it did. Grigorieva said she was pressured into a deal with provisions, including joint custody, that she opposed. She got another lawyer, divorce attorney Manley Freid, and in June sought a temporary restraining order based on the alleged January assault. Taking the matter to court infuriated Gibson’s lawyers, who denounced Freid for failing to inform the judge of the mediated agreement and derided the idea that Grigorieva had been in fear for six months.

“This is a contrived additional attempt to extract — I will be generous — to extract money from Mr. Gibson with no foundation and no basis,” Gibson attorney Stephen Kolodny told the judge, according to a hearing transcript.

The judge directed Gibson to stay away from Grigorieva and ordered the recordings turned over to the court for safekeeping. Shortly thereafter, excerpts began appearing on Radar Online, a celebrity website. Grigorieva denied having anything to do with the leaks. But the prediction by Kolodny that the recordings posed “a clear and present danger to Mr. Gibson’s future” proved true. His talent agency dropped him, the stars of “The Hangover” revolted when he was offered a spot in the sequel, and the Viking picture stalled.

Grigorieva has cycled through attorneys, and she and George are battling in mediation over whether she must pay his contingency fee for the May agreement.

After the tapes became public, Gibson’s lawyers, including criminal specialist Blair Berk, met with investigators. Subsequently, the Sheriff’s Department, which was looking into the assault allegations, announced the extortion inquiry.

Over the last six months, Major Crimes Bureau detectives have seized copies of Grigorieva’s computer hard drive and interviewed those involved in the settlement talks, including Grigorieva and her lawyers. Investigators have not revealed the full scope of their inquiry, but Whitmore, the sheriff’s spokesman, acknowledged that “one of the things looked at was, is it actual extortion or legal negotiation — something that attorneys do all the time?”

A lawyer for Grigorieva, Daniel Horowitz, denied that she had engaged in extortion and said, “When all the facts are known, people will learn that she loved Mel Gibson and never intended to hurt him.”

harriet.ryan@latimes.com