Hollywood confidential: Starring Steven Seagal, Kevin Costner, Garry Shandling, Whoopi Goldberg, Elizabeth Taylor

Surprisingly, the perpetrator of the threat against Busch was found almost immediately. On a tip, the FBI started following Alexander Proctor, 58, an ex-convict and drug runner. In secretly taped meetings with an informant that read like a Sopranos parody, the garrulous Proctor alleged the private eye Pellicano had hired him — for $10,000 — to burn Busch's car. But Proctor said he decided to use the fish, the rose and the bullet partly because, "They wanted... he wanted to make it look like the Italians were putting the hit on her so it wouldn't reflect on Seagal."

On November 21, 2002, FBI agents raided the Pellicano Investigative Agency at 9200 Sunset Boulevard. The search warrant said the government "had probable cause to believe Pellicano had hired and paid Alexander Proctor to burn the car of a Los Angeles Times reporter who was writing a negative article about one of Pellicano's celebrity clients".

Even the FBI was stunned by what it discovered: two loaded handguns in Pellicano's desk, two safes containing military-grade C-4 plastic explosive, a detonation cord and blasting cap, and two military anti-personnel grenades — baseball shaped pipe-bombs, the strikers of which were both armed. The explosives were so powerful that they would have killed anyone in Pellicano's and nearby offices; they were powerful enough to bring down an aircraft. And there was $200,000 in bundles of $10,000.

The private eye was charged with illegal possession of explosives. Though initially he denied the charges, he later pleaded guilty, and on November 17 last year a grim Pellicano, surrounded by a clamouring media throng, turned himself in at the Federal Detention Center in downtown LA to start a 27-month jail sentence. The weekend before, while still on bail, he had nipped out of town to get married in Las Vegas — his fifth marriage — to a 44-year-old cocktail waitress.

Proctor is the only person indicted regarding the threat against Busch. He was separately convicted of a serious, unrelated drug crime and in early January was sentenced to 10 years in jail. The charge he faces of making criminal threats against Busch, is yet to come to court. While testifying on February 11, 2003, in the waterfront racketeering trials of Gotti family members and associates, Steven Seagal denied under oath that he was involved in the threat against the reporter. (During that testimony the actor outlined how he was a target of mob-linked exhortion and threats connected to Nasso.) Nor has he been mentioned in a civil action Busch has filed.

Pellicano has also denied any involvement and has insisted he would never work for Seagal. "I can't stand the piece of shit," he said of the star, with whom he claimed he had a falling out several years ago over money. "He's a rat cocksucker. Number one, I didn't do it for Seagal. Number two, if I was going to intimidate somebody, I'm not going to put a fish on their car. I'm going to be in their face like I've been all my life."

But Pellicano has had problems explaining why the FBI raid uncovered documents with the actor's name on them, the nature of which have not been disclosed. Or a telephone "call list" with Proctor's name on it, and telephone records that showed 36 calls between Pellicano and Proctor. The FBI also uncovered evidence that Pellicano had illegally obtained Busch's driver's licence details and other private information, including her physical description, from a rogue LA cop, Mark Arneson.

Earlier this month, Busch filed a lawsuit in the LA superior court seeking damages from Pellicano, Arneson, the telephone company, and several other unidentified defendants, claiming threats, alleged wiretapping of her phone and hacking into her computer had left her terrified and ruined her career.

Although the explosive — in both senses — charges against Pellicano were front-page news, far more worrying to tinseltown's most powerful names was the massive and extremely sophisticated computer-recording facility the FBI also found in a back room in his office, during a follow-up raid. It contained tens of thousands of hours of secret telephone wiretaps of movie stars, their lawyers, agents, spouses and lovers — the most voluminous treasure trove ever unearthed of Hollywood's secrets. Industry big shots were terrified. Just what dirty laundry - which they thought they were hiring Pellicano to keep the lid on — was on those tapes and in those bulging folders of transcripts?

As juicy as that may be, the bigger legal question — which a secret federal grand jury has been investigating for 18 months — is what those who hired Pellicano knew about his operations; his wiretapping and other dubious methods to help them win cases and frighten adversaries.

In just under two decades, Anthony "the Pelican" Pellicano had become a mythic figure; the mention of his name was enough to make people break out in a cold sweat. Tough, surly, menacing, he seemed to have stepped out of the pages of hard-boiled crime fiction: He was who Philip Marlowe might have been if he'd dropped his moral compass into Santa Monica Bay.

From a working-class Sicilian family, he grew up on the rough streets of Cicero, Illinois, the town from which Al Capone also hailed. When he was kicked out of school at 17 he enlisted; when he left the army, he started working as a debt collector. In 1969, calling himself "Tony Fortune", he became a "skip tracer", finding people who had jumped bail.

In 1974 his business failed; during bankruptcy proceedings, he was forced to admit he had taken a $30,000 loan from Paul DeLucia Jr, the son of reputed Chicago mobster Paul DeLucia, also known as Paul "the Waiter" Ricca. DeLucia Jr was the godfather of one of Pellicano's daughters. Pellicano has always denied DeLucia was in the Mob. "He's just like any other guy in the neighbourhood," he said.

Pellicano came to international attention in 1977 when he mysteriously recovered the bones of Mike Todd, the Hollywood producer killed in a plane crash in 1958, while married to the film star Elizabeth Taylor. Todd's bones had been stolen from an Illinois cemetery. After an exhaustive police search turned up nothing, Pellicano found the bones under a pile of leaves just 75 yards from the grave. Conveniently, a TV crew was there to film him. Although Pellicano's enemies started calling him the "grave robber", he endeared himself to Taylor, who introduced him to some of her Hollywood friends.

He moved to LA in 1983 and was soon working for top lawyers and celebrities, including Michael Jackson, Farrah Fawcett, Kevin Costner, Whoopi Goldberg and Roseanne Barr. Pellicano's digging helped discredit a woman who had sold her story to the tabloids about having a long affair with Costner, and he helped find Barr's daughter, who had been put up for adoption as a baby.

His first big case was in the early 1980s, assisting in the defence of the flamboyant car manufacturer John DeLorean, who had been indicted in a bizarre scheme to sell millions of dollars' worth of cocaine. Pellicano's dissection of government wiretaps of DeLorean was instrumental in the latter's acquittal. The private eye, who had trained as an army cryptographer, was a self-proclaimed expert on audiotape recordings: how to make them — secretly — and how to decipher them: what he called "audio forensics".

That audio expertise is now the issue. During an attempt last year to revoke Pellicano's bail, Daniel Saunders, an assistant US attorney, was reported to have told the court that the FBI had obtained the names of people who hired Pellicano to conduct illegal wiretaps, or secure the silence of potential witnesses. Saunders said the FBI had identified the computer software Pellicano used to tap phones, his contact at the telephone company that helped him do it, and the law-enforcement officer who assisted him. In June last year Sgt Mark Arneson, a 20-year veteran of the LA police department, was suspended when it emerged that, at Pellicano's request, he had illegally run checks on several people, including Anita Busch, through LAPD computers, supplying Pellicano with addresses and other private information. Arneson has now retired.

The FBI has since questioned entertainment, criminal and divorce lawyers in LA, New York and Washington about their knowledge of Pellicano's modus operandi. People found guilty of wiretapping can be sentenced to as long as five years in prison on each count. Perverting the course of justice is a much more serious crime, particularly if those involved are lawyers.

"It is very, very serious because lawyers are officers of the court," says Thom Mzorek, a spokesman for the US attorney's office in LA, which is running the investigation. "It's one of the backbones of our society that you have a fair and blind justice system. There are very high ethical standards which apply to members of the bar."

So far only one lawyer has admitted he is linked to the investigation because of his contact with Pellicano, the target of the probe. That lawyer, Hollywood was stunned to learn, was Bertram Fields.Bert Fields is Hollywood's most effective and esteemed litigator. He is the lawyer to whom the A-list — Tom Cruise, Warren Beatty, Michael Jackson, John Travolta, Dustin Hoffman, Kevin Costner, Madonna, the former Beatles, producer Joel Silver, and moguls such as Jeffrey Katzenberg and David Geffen — turn to when things don't go their way, happy to pay his $1,000-an-hour fee. To his clients, Fields is much more than a lawyer. "The greatest consigliere [trusted adviser] of them all," Mario Puzo, the author of The Godfather novels and a Fields client, called him.

Fields has vehemently denied knowing anything about Pellicano's illegal activities. In early November, Fields told Variety, the daily showbiz newspaper that all Hollywood reads, that he had been questioned by the FBI in connection with the grand-jury investigation into Pellicano's alleged wiretapping. FBI agents had showed up at his office to question him about Pellicano and that he received a subpoena to testify, but that he was later told it was not necessary for him to appear.

"Like many lawyers, I've used Anthony Pellicano as an investigator, but I have never had anything of any kind to do with wiretapping," Fields said. "Not in any way. Not in any case. Not at any time. Never. I don't do that." Fields's office says he will not make any further comment about his contact with the grand-jury investigation, and requests for comment for this article were declined. Clients have sprung to his defence: Warren Beatty, a close friend, says it's impossible that Fields would be involved in anything illegal.

Other top Hollywood lawyers also have links to Pellicano. Edward Masry (played by Albert Finney in the film Erin Brockovich), is being sued by a woman who alleges that he and Pellicano illegally wiretapped her after she filed a sexual harassment suit against him. Masry denies the claim; the civil suit, filed at the end of March, is continuing.

"I can't believe Anthony would do the kinds of things they are accusing him of," said Martin Singer, 51, another lawyer who hired Pellicano. Singer specialises in representing stars like Arnold Schwarzenegger, Bruce Willis and Sylvester Stallone, Demi Moore, Jim Carrey and Steven Seagal in their fractious dealings with the media.

But the FBI believes that a large number of people involved in disputes with celebrities whose lawyers have used Pellicano will have had their phone conversations secretly taped. Most have been told by the FBI not to talk about the grand-jury investigation; however, comedian Garry Shandling, star of The Larry Sanders Show, who had been involved in a lawsuit against a powerful television producer, told The New York Times that the FBI "had asked him questions about wiretapping" and that "my name and other people who were deposed in my lawsuit, their names were run through a computer at the Los Angeles Police Department".

In 1993, Diane Dimond, a reporter for the news show Hard Copy, "began to notice pops and clicks and noise on my phone at work on the Paramount Studios lot". Dimond had broken the news of the reason for a police raid on Michael Jackson's Neverland Ranch — alleged child molestation. Fields was then representing Jackson (though Jackson later changed lawyers) and Pellicano had been hired by Fields. Having heard stories about Pellicano, Dimond set a trap.

"I arranged for my husband to phone me and say: ÔHi, honey. Are you still working on that TV special about Anthony Pellicano?' And I said: 'Oh, yeah, it's really interesting. Boy, he's going to be really upset when he sees this on air!' "We hung up and it took just 20 minutes before my legal department called me and said: 'Diane, are you working on a special about Anthony Pellicano? Because we've just had a call from his legal representative.' Bingo!"

The FBI has since told Dimond that they had found transcripts of those 1993 conversations on Pellicano's computers.

Even more serious are allegations that district attorneys, detectives and others involved in serious criminal cases prosecuting high-profile clients represented by top-flight lawyers were being wiretapped by Pellicano. Steve Cooley, the LA district attorney, was particularly concerned about illegal wiretaps of district attorneys during a case in which a wealthy Los Angeles businessman was eventually acquitted of rape.

"The possibility that criminal investigations and prosecutions may have been compromised... through illegal wiretapping casts a shadow over Los Angeles County's criminal justice process," said Cooley. "Such illegal wiretapping puts the lives of innocent victims and witnesses in jeopardy. It impedes the ability of dedicated men and women in the district attorney's office and in law enforcement to see the truth."

How did a lawyer as reputable as Bert Fields come to use a man like Pellicano? They come from very different backgrounds and inhabit radically different social worlds. Pellicano trawled the grimy back alleys of Hollywood; Fields — tall, slim, beautifully dressed, immaculately manicured, effortlessly patrician — has the air of being so refined that the leather of his $1,000 designer shoes may have never felt the rough edge of a city street. A graduate of Harvard Law School, Fields has been so successful that he and Barbara Guggenheim, his third wife and art dealer to the stars, keep five homes: in the Hollywood Hills, on the beach in Malibu, in New York, an hour outside Paris, and on the beach front on the western coast of Mexico. They have a staff of 10.

The long working relationship between Fields, who would charm his celebrity clients, and Pellicano, who could put the fear of God into adversaries, always seemed unlikely. The Hollywood gumshoe seemed happy to be quoted making statements that seemed outrageous.

"I'll make you remember why you're scared of the dark," was one of his milder threats. He loved letting people know that he kept a "Louisville slugger" — an aluminium baseball bat — in his car and once bragged that he'd used it. "I always start out by being a gentleman. I only use intimidation and fear when I absolutely have to." He has claimed to have a black belt in karate and a master's rating in kung fu, insisting that he could "really maim" someone. "I have and I don't want to. I'm an expert with a knife. I can shred your face." He boasted that he regularly employed people "who will jump on somebody's throat and break their hands if necessary".

Most people who have worked for him are too scared to talk, but Paul Barresi, who did several jobs for him over the years, is not. Once a leading gay hard-core porn star in films such as Lusty Leathermen and My Dad Beats My Ass, Barresi, 55, now still directs the obscure sub-genre of gay military porn movies.

"For the most part, Tony would call me in and say, ÔWe need information on so and so,'" said Barresi at his home 60 miles east of LA, where he lives with his wife of 12 years. "Find out who his detractors are, find out who's causing trouble." One of the main reasons that Pellicano used Barresi was because of his porn connections; a lot of porn stars — male and female — double as prostitutes, often sleeping with celebrity clients.

"We both have the same background: Sicilian," Barresi explained. "We understood one another, the way we react. We're passionate people, it's in the blood. He was not the kind of guy to bullshit. He looked me in the eye once and said: 'I don't care who you fuck over, Barresi, never fuck me!'"

Barresi says the last time he was called in by Pellicano was in April 2001, to see what information he could find "that might be useful to the detractors of Arnold Schwarzenegger", who was thinking of running for governor of California. Barresi said he didn't know who had hired Pellicano. "I can tell you this. I gave Tony the name, address, social-security number, phone number of a security guard who was going to be selling a story that wasn't very flattering about Schwarzenegger." Whatever the story may have been, nothing surfaced. "Maybe he's somewhere in the Caribbean now. Drinking a pi–a colada."

Anthony Pellicano, languishing in a federal prison cell, has insisted he will not cooperate with the investigation into what those who hired him might have known or suspected, though he's been offered leniency if he is prepared name top names.

"My clients and the lawyers who hired me are completely innocent," said Pellicano just before he went to jail. "They did nothing wrong. The government should leave them alone. And me, I'm going to take this punishment like a man. I will not participate in any way, shape or form with this investigation. One of the first rules of being a private investigator is that you must maintain the confidentiality of every client in every investigation. I am not a rat." It will be difficult for the government to break Pellicano's omerta — vow of silence. "I would bet my life and my child's life that Anthony would never betray someone he was working for," one prominent lawyer has said. "And he would certainly never betray me. Anthony is a fearful enemy, and a totally loyal friend."

For Bert Fields it has been business as usual in the past few months. He has nevertheless taken the precaution of hiring John Keker, a top criminal defence attorney.

The FBI has offered immunity to some of Pellicano's former employees, and two have testified before the grand jury that wiretapped conversations were transcribed in Pellicano's offices. And, say people with knowledge of the case, Pellicano's wiretaps may provide the most powerful evidence against those who are eventually indicted. "What these lawyers didn't realise when they hired Pellicano was that he wiretapped everyone and that includes them," said one person close to the case.

As Hollywood anxiously waits for what the US attorney Daniel Saunders called "anticipated indictments", nobody knows just what secrets may be revealed or whose careers and marriages will be destroyed if the Pellicano tapes become public. But to TV reporter Diane Dimond the whole affair is much more sinister. "What's amazing is that the cops knew all about Anthony Pellicano all along," she says. "They've known what has been going on for years. He had some of them on his payroll. It's LA Confidential all over again."

TO BOLDLY GO

The private eye who declares he is always in your face

Intimidation
The reporter Anita Busch had her car vandalised when she investigated a standoff between the actor Steven Seagal and the film producer Jules Nasso. The FBI believed the attack was a threat from Anthony Pellicano because she was 'writing a negative article' about one of his celebrity clients. Busch was told to go into hiding.

Professional partners
Anthony Pellicano and the lawyer Bertram Fields were seen together at a press conference in 1993,when they were representing Michael Jackson, who had been accused of child-molesting. The two men have recently been investigated over alleged wiretapping. Fields, a trusted confidant of the stars, strenuously denied the charge. Pellicano said he would not cooperate with the investigation.

Hail and farewell
Pellicano married his fifth wife in Las Vegas in November. The Los Angeles gumshoe was on bail, charged with illegal possession of explosives, when he kept the tryst with the 44-year-old cocktail waitress. A couple of days after the ceremony the bridegroom went to jail.