Could Jeff Be­zos bring down the Na­tional En­quirer?

Tabloid’s owner faces other finan­cial chal­lenges

USA TODAY International Edition - - FRONT PAGE - Gre­gory Ko­rte and Nathan Bomey

A sala­cious tabloid news­pa­per with a con­ser­va­tive owner and a his­tory of un­scrupu­lous meth­ods finds it­self un­der the mi­cro­scope, forc­ing a na­tional reck­on­ing about the in­ter­sec­tion of jour­nal­ism, pol­i­tics, celebrity and sleaze.

That’s what hap­pened seven years ago at Ru­pert Mur­doch’s News of the World in Lon­don. The pa­per folded in 2012 amid a phone hack­ing scan­dal that turned the British me­dia and po­lit­i­cal es­tab­lish­ment up­side down.

But it could also de­scribe – mi­nus the phone hack­ing – the con­tro­versy en­gulfing the Na­tional En­quirer.

The Florida-based su­per­mar­ket tabloid has mixed celebrity gos­sip, true crime and con­spir­acy the­o­ries for decades. But its as­so­ci­a­tion with Pres­i­dent Don­ald Trump and its new at­tacks on Ama­zon founder and Wash­ing­ton Post owner Jeff Be­zos are shin­ing a harsh light on the un­der­belly of tabloid jour­nal­ism.

And now a le­gal fight with the world’s rich­est per­son could prove dev­as­tat­ing for a com­pany that has faced finan­cial chal­lenges, in­clud­ing sub­stan­tial debt and the loss of rev­enue from print sales that also con­fronts main­stream news­pa­pers.

In a blog post Thurs­day, Be­zos al­leged that lawyers for the Na­tional En­quirer’s par­ent com­pany – Amer­i­can Me­dia Inc. – tried to black­mail him into get­ting The Wash­ing­ton Post to drop its in­ves­ti­ga­tion into the com­pany’s ties to Trump.

Be­zos an­nounced Jan. 9 that he and his wife were di­vorc­ing af­ter 25 years of mar­riage. Later that day, the Na­tional En­quirer pub­lished pho­tos and texts show­ing Be­zos in­volved in an ex­tra­mar­i­tal affair with a for­mer news an­chor.

Be­zos hired a pri­vate in­ves­ti­ga­tor to dis­cover how the Na­tional En­quirer got his texts.

That wasn’t the end of it.

In emails re­leased by Be­zos Thurs­day, the Na­tional En­quirer told him that it had even more com­pro­mis­ing pho­tos, in­clud­ing what it de­scribed as a “be­low-the-belt selfie.” It threat­ened to pub­lish the pho­tos un­less Be­zos pub­licly stated that he has “no knowl­edge or ba­sis for sug­gest­ing that AM’s cov­er­age was po­lit­i­cally mo­ti­vated or influenced by po­lit­i­cal forces.”

AMI has de­nied any wrong­do­ing,

say­ing it “be­lieves fer­vently that it acted law­fully in the re­port­ing of the story of Mr. Be­zos.” In a state­ment Fri­day, the com­pany said its board of di­rec­tors would in­ves­ti­gate the al­le­ga­tions.

The com­pany could have crim­i­nal or civil li­a­bil­ity if it was com­plicit in il­le­gally ob­tain­ing the pho­tos, said Michael Con­way, a lawyer who has rep­re­sented me­dia or­ga­ni­za­tions such as The New York Times and ABC, and now teaches at North­west­ern Univer­sity’s Medill School of Jour­nal­ism.

“The key ques­tion here is, did Amer­i­can Me­dia in any way en­cour­age, fa­cil­i­tate or other­wise make an ef­fort to get Be­zos’ pic­tures and emails, which we don’t know,” Con­way said. “If they did, then they’re com­plicit in the crime and the First Amend­ment doesn’t pro­tect them from pub­lish­ing it.”

But that’s not the only ques­tion. Be­zos al­leged that AMI’s threats to pub­lish more em­bar­rass­ing pho­tos amounted to ex­tor­tion.

AMI’s lawyers pro­posed a confiden­tial agree­ment to set­tle a le­gal claim. Such non-dis­clo­sure agree­ments are com­mon, said Harry Sandick, an at­tor­ney who for­merly served as a prose­cu­tor in the South­ern Dis­trict of New York. But “you aren’t al­lowed to threaten to harm some­one or their rep­u­ta­tion in ex­change for some­thing.”

Last year, AMI agreed to co­op­er­ate with fed­eral pros­e­cu­tors there who were in­ves­ti­gat­ing Trump’s pay­ments to women through long­time per­sonal at­tor­ney Michael Co­hen, who is also co­op­er­at­ing. As part of that agree­ment, AMI agreed not to com­mit fur­ther crimes, height­en­ing the stakes for the com­pany if it’s found to have acted il­le­gally in the Be­zos affair.

Fed­eral pros­e­cu­tors are now in­ves­ti­gat­ing whether AMI’s deal­ings with Be­zos vi­o­lated that agree­ment.

The As­so­ci­ated Press re­ported that the Na­tional En­quirer’s cir­cu­la­tion fell 18 per­cent last year, to 265,000 weekly. But that’s just a small frac­tion of the 2.3 mil­lion cir­cu­la­tion AMI claims.

Other pub­li­ca­tions in­clude lifestyle ti­tles like Men’s Jour­nal and Mus­cle and Fit­ness. along with celebrity fare like In Touch, Us Weekly and Soap Opera

In a state­ment Fri­day, AMI said its board of di­rec­tors would in­ves­ti­gate the al­le­ga­tions.


Last year, it bought up more pub­li­ca­tions to form a near-mo­nop­oly of the su­per­mar­ket aisle. Those in­cluded Life & Style, Closer, J-14 and Girl­sWorld.

The com­pany is pri­vately owned and not traded pub­licly, so its finan­cials are closely held. But just last month, the com­pany an­nounced that it refinanced $460 mil­lion worth of debt.

For ex­am­ple, Gawker de­clared bank­ruptcy in 2016 af­ter for­mer pro­fes­sional wrestler Hulk Ho­gan sued the on­line gos­sip site for in­va­sion of pri­vacy af­ter it pub­lished a sex tape. Ho­gan won a $115 mil­lion judg­ment.

Mur­doch, whose me­dia em­pire in­cludes the Wall Street Jour­nal and Fox News, closed the News of the World in 2011 af­ter mul­ti­ple news­pa­per staffers were ar­rested in the phone hack­ing scan­dal. While the news­pa­per il­le­gally ob­tained voice­mails of ath­letes, celebri­ties and thou­sands of oth­ers, it was the hack­ing of a 13-year-old mur­der vic­tim that most inflamed the British pub­lic.

The Be­zos bat­tle is just one of the con­tro­ver­sies for the tabloid group:

❚ The Na­tional En­quirer’s edi­tor, Dy­lan Howard, re­port­edly col­luded with movie pro­ducer Har­vey We­in­stein to dis­credit women ac­cus­ing We­in­stein of sex­ual ha­rass­ment and rape.

❚ In the run-up to the 2016 elec­tion, the Na­tional En­quirer pub­lished a string of du­bi­ous sto­ries about Hil­lary Clin­ton’s health, sex life and in­volve­ment in var­i­ous con­spir­a­cies.

❚ AMI ad­mit­ted pay­ing a $150,000 to for­mer Play­boy play­mate Karen McDou­gal as part of an effort to si­lence her claims about an affair with Trump.

AMI Chair­man and CEO David Pecker has close ties to Trump, and the New York Times and the As­so­ci­ated Press have re­ported that Pecker has used that ac­cess to lever­age busi­ness deals in Saudi Ara­bia. Be­zos said it’s the Saudi con­nec­tion that “seems to hit a par­tic­u­larly sen­si­tive nerve.”

Reporter Christal Hayes con­trib­uted from Wash­ing­ton.

Ama­zon founder Jeff Be­zos, who also owns The Wash­ing­ton Post, is the world’s rich­est per­son. MARK WIL­SON/GETTY IM­AGES

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