Supermarket tabloid National Enquirer has long employed hardball tactics in pursuit of salacious scoops about Hollywood celebrities and politicians, while simultaneously covering up embarrassing stories about its friends, including President Donald Trump and former California Gov. Arnold Schwarzenegger.
But the tabloid may have underestimated its latest target: the world’s richest man, Jeff Bezos, founder of Amazon.com and owner of the Washington Post.
The National Enquirer last month revealed that Bezos had been engaged in an extramarital affair with Lauren Sanchez, a former local Fox TV anchor in Los Angeles and wife of a prominent Hollywood talent agent. Bezos unleashed private investigators, giving them an unlimited budget to learn how the tabloid got photos and text message exchanges between him and Sanchez.
The Enquirer bristled over the investigation and tried to get Bezos to back down. Instead, Bezos published an extraordinary blog post this week, accusing the tabloid and its parent company, American Media Inc., of “extortion and blackmail,” alleging it threatened to publish more embarrassing pictures unless he abandoned his investigation of the leaks.
“I think they met their match in Bezos,” said Dan Ives, a technology analyst with Wedbush Securities. “This remains a heavyweight fight. The public, the broader tech industry, and D.C. insiders are watching closely.”
On Friday, American Media said it was investigating the billionaire’s allegations and that it “believes fervently that it acted lawfully in the reporting” of the Bezos story.
Federal prosecutors in New York also are examining Bezos’ allegations, according to two sources familiar with the review but not authorized to discuss it. Prosecutors are looking at whether AMI violated a recent agreement in which AMI pledged not to commit any crimes for three years.
The Bezos drama quickly dragged American Media Chairman David Pecker, whose close ties with Trump already have come under scrutiny, back into the spotlight.
AMI owns numerous supermarket tabloids and gossip magazines, including Us Weekly, the Star and the Globe.
Bezos’ blog post noted that his ownership of the Post may have brought another level of complexity to the situation, and alleged that the coverage of his extramarital affair may have been politically motivated.
“It’s unavoidable that certain powerful people who experience Washington Post news coverage will wrongly conclude I am their enemy,” Bezos wrote in the post on the Medium website. “President Trump is one of those people, obvious by his many tweets.”
Bezos also pointed out connections between Pecker and the Saudi government, and seemed to suggest that the Saudis may be involved, too. Bezos wrote that “The Post’s essential and unrelenting coverage of the murder of its columnist Jamal Khashoggi is undoubtedly unpopular in certain circles.” Khashoggi was killed at the Saudi Consulate in Turkey in October.
Whether American Media and its controversial accountant-turned-CEO broke the law is a pivotal question. The company reached a non-prosecution agreement with the U.S. Attorney’s Office in Manhattan in December, but it admitted its role in a scheme that began two months after Trump announced his candidacy in 2015. That’s when Pecker offered to help suppress stories about Trump’s relationship with other women, according to court filings.
That case began after special counsel Robert Mueller, who is leading the investigation into Russian interference in the 2016 presidential campaign, passed information to the U.S. Attorney’s Office in Manhattan about dealings between Pecker and Trump and his longtime lawyer Michael Cohen.
Cohen said Trump ordered him to arrange hush money payments to two women — the porn star Stormy Daniels and the former Playboy playmate Karen McDougal — who said they had affairs with him years ago. The payments were made during Trump’s presidential campaign.
AMI acknowledged using a tabloid tactic called “catch and kill,” in which it would buy the rights to someone’s story and then not publish it.
Cohen pleaded guilty to campaign finance violations, among other crimes, because the payments were intended to influence the campaign and were not properly disclosed. Cohen, who was sentenced to three years in prison, made the $130,000 payment to Daniels. American Media paid $150,000 to McDougal.
The McDougal arrangement is similar to one involving Schwarzenegger more than 15 years ago. The Los Angeles Times reported in 2005 that days after Schwarzenegger jumped into the race for governor in 2003, American Media promised to pay a Malibu woman $20,000 to keep quiet about an affair she alleged she’d had with the star of “The Terminator.” The woman agreed to disclose to no one but American Media any information about her “interactions” with Schwarzenegger during his marriage to Maria Shriver.
Others, including former presidential candidate John Edwards, a Democrat, received much different treatment. The Enquirer exposed the former senator from North Carolina’s extramarital affair with Rielle Hunter, revealing that he had fathered her child.
After Bezos’ post, Pulitzer Prize-winning reporter Ronan Farrow said in a Twitter message that he and another journalist “involved in breaking stories about the National Enquirer’s arrangement with Trump fielded similar ‘stop digging or we’ll ruin you’ blackmail efforts from AMI.”
Legal experts said the National Enquirer has pushed the envelope with its hardball negotiations with Bezos and his legal team, but proving a crime of extortion may be difficult.
“That can be a murky line. The e-mails released suggest that line may have been crossed,” said James Sammataro, head of the media and entertainment group at Stroock & Stroock & Lavan.
High-profile criminal defense attorney Louis Shapiro said, “This isn’t your traditional extortion. It is usually if you don’t give me something, then I will reveal or report something. The person usually wants money.”
The Enquirer has been sued by prominent figures and celebrities before, most notably Clint Eastwood and Carol Burnett. Most of the cases were settled out of court.
“There’s no reputational risk to the National Enquirer — it’s been the butt of jokes in the media industry for the last century. But there could certainly be some criminal liability,” said Gabriel Kahn, a University of Southern California Annenberg journalism professor. “Clearly this is a media enterprise that evidence seems to indicate is running an extortion racket.”
Like other magazine publishers, American Media has lost advertising revenue. The 92-year-old Enquirer is operating with a skeleton crew and many of its staff writers have been let go, according to an individual with knowledge of the company.
Possible financial difficulties added to the intrigue over AMI’s publication of a 100-page glossy magazine last year, titled “The New Kingdom,” that extolled the leadership of Saudi Arabian Crown Prince Mohammed bin Salman. The magazine, which circulated in Hollywood, carried no ads.
“Something like that would not have happened without Saudi government involvement,” said Shadi Hamid, senior fellow at the Brookings Institution’s Center for Middle East Policy.
Adel Jubeir, the Saudi minister of state for foreign affairs, was in Washington on Friday. Asked if the Saudis had played a role, he said he doubted it. Then, he added, “As far as I know: flat no.”