National Enquirer owner defends reporting on Amazon's Bezos

[February 09, 2019]  By Nathan Layne

NEW YORK (Reuters) - The owner of U.S. tabloid newspaper the National Enquirer pushed back on Friday against accusations of "extortion and blackmail" from Amazon.com Inc Chief Executive Jeff Bezos, saying its reporting on an extramarital relationship involving the world's richest man was lawful and it would investigate his claims.

Bezos on Thursday accused American Media Inc (AMI) of trying to blackmail him with the threat of publishing "intimate photos" he allegedly sent to his girlfriend unless he said in public that the American supermarket tabloid's reporting on him was not politically motivated.

The U.S. attorney's office in Manhattan is reviewing whether the alleged extortion violated a non-prosecution agreement, a person familiar with the matter said, confirming an earlier report by Bloomberg News.

AMI signed the agreement with federal prosecutors last year in connection with a $150,000 hush-money payment to a former Playboy model who claims she had an affair with U.S. President Donald Trump. Trump denies the affair.

The agreement can be voided if AMI commits any crimes. If the agreement is nullified, AMI or its executives could face prosecution for the hush payment and its conduct with Bezos, legal experts said.

AMI and its CEO David Pecker have had close links to Trump, who has attacked Bezos, Amazon and the newspaper he owns privately, the Washington Post, on Twitter.

"American Media believes fervently that it acted lawfully in the reporting of the story of Mr. Bezos," the company said in a statement.

Bezos and his wife announced last month that they were divorcing after 25 years of marriage. That same day, the National Enquirer touted it was publishing alleged intimate text messages between Bezos and Lauren Sanchez, a former television anchor whom he was said to be dating.

Bezos opened an investigation into how the messages could have ended up in the hands of the tabloid, led by longtime security consultant Gavin de Becker. De Becker told media that the leak was politically motivated.

'POLITICALLY MOTIVATED'

In a blog post on Thursday, Bezos cited an email from AMI deputy general counsel, Jon Fine, to a lawyer representing de Becker. In it, AMI proposed a public acknowledgment from Bezos and de Becker that "they have no knowledge or basis for suggesting that (AMI's) coverage was politically motivated or influenced by political forces."

In return for such an acknowledgment, according to the email, AMI offered "not to publish, distribute, share, or describe unpublished texts and photos," Bezos said.

Bezos said the statement AMI was proposing was false and described the offer as an "extortionate proposal."

David Pecker, Chairman and CEO of American Media speaks at the Shape and Men's Fitness Super Bowl Party in New York City, U.S., January 31, 2014. REUTERS/Marion Curtis/File Photo

Bezos, Fine, and de Becker were not immediately available for comment. Amazon declined to comment. Shares of the world's largest online retailer were down 1.8 percent at $1,584.74.

Extortion typically involves an effort to obtain property, services, money or some other benefit by threatening violence, reputational harm or other injury, although definitions can vary across state and federal laws.

In Florida, where American Media is based, extortion includes maliciously threatening targets with disgrace, or to expose their secrets. In Washington state, where Amazon is based, it includes threatening to expose secrets that may subject targets to hatred, contempt or ridicule, or reveal information that the targets wanted to conceal.

Federal law defines extortion as someone seeking or actually obtaining "property" through the "wrongful use" of actual or threatened force, violence or fear. "Property" can be something of value not limited to a tangible object or money.

Elie Honig, a former prosecutor, argued in a column on CNN that the actions alleged by Bezos amounted to extortion because the act of stopping Bezos' investigation was of value to AMI and AMI's threat of exposing lurid photos met the "wrongful" test.

But criminal defense lawyer Page Pate said what AMI sought to gain from Bezos was "too fuzzy" and would not be enough to put them in violation of the non-prosecution deal.

"I don't think there is a clear enough hook to show that what they wanted from Bezos was a thing of value," Pate said.

On Friday, AMI said that at the time of Bezos' allegations it was "in good faith negotiations to resolve all matters with him."

"In light of the nature of the allegations published by Mr. Bezos, the Board has convened and determined that it should promptly and thoroughly investigate the claims. Upon completion of that investigation, the Board will take whatever appropriate action is necessary," it added.
 

(Reporting by Chris Sanders, Hilary Russ, Jonathan Stempel and Nathan Layne; Writing by Mohammad Zargham and Nick Zieminski; Editing by Tim Ahmann and Susan Thomas)

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