Prosecutors Weigh Whether National Enquirer Violated Earlier Agreement

Prosecutors Weigh Whether National Enquirer Violated Earlier Agreement

Federal prosecutors are examining whether the National Enquirer’s publisher violated an earlier deal to avoid facing campaign-finance charges, according to people familiar with the matter, after Jeff Bezos, founder of Inc. and owner of the Washington Post, accused the tabloid of trying to blackmail him.

The Enquirer’s actions came under government scrutiny after Mr. Bezos wrote a lengthy post Thursday on the web platform Medium detailing recent communications with the tabloid’s representatives.

Mr. Bezos said the Enquirer threatened to release sexually explicit selfies of him unless he called off investigators he had hired to determine the sources and motivations behind an initial Enquirer article exposing an alleged affair he had.

The agreement reached last year between federal prosecutors and the Enquirer’s publisher, American Media LLC, allowed the company to avoid criminal charges for coordinating with the Trump campaign to make an illegal payment in 2016 to silence a woman alleging an affair with the then-presidential candidate.

Manhattan federal prosecutors agreed not to charge American Media with campaign-finance violations after the company cooperated in their investigation of Michael Cohen, President Trump’s former lawyer who arranged the hush-money payment. The agreement, however, says American Media could be prosecuted if it commits any crimes in the three years after the deal.

Amazon CEO Jeff Bezos publicly accused National Enquirer publisher David Pecker of blackmail and extortion, alleging that the company’s coverage of him has been politically motivated. WSJ’s Shelby Holliday explains why his claims are making headlines. Photo by Emma McIntyre/Getty Images

Whether the Enquirer’s handling of the situation with Mr. Bezos amounts to extortion or blackmail is a complicated legal question, according to experts. But if prosecutors conclude American Media broke the law, it could invalidate the non-prosecution agreement and expose the company to criminal charges.

In his Medium post, Mr. Bezos included what he said were emails he and his legal team received from executives at American Media describing the photos the tabloid threatened to run.

“Rather than capitulate to extortion and blackmail, I’ve decided to publish exactly what they sent me, despite the personal cost and embarrassment they threaten,” Mr. Bezos wrote.

In a statement Friday, American Media said it “believes fervently that it acted lawfully” in its reporting and will investigate Mr. Bezos’ claims internally.

The crime of blackmail is notoriously hard to define, say legal experts, but court rulings suggest that the threats and demands as alleged by Mr. Bezos could meet the standard.

Threatening to damage someone’s reputation is extortion under federal law if the person’s goal is to get money or something else of value that doesn’t otherwise belong to the person.

For example, it wouldn’t be wrongful for a consumer to threaten to trash a company online about a defective product if the company fails to honor its warranty. Nor would a situation in which a private club threatens to post the names of members behind on their dues.

More problematic, however, are situations in which the demand and the requested outcome have little to do with each other.

A federal appeals court, for example, in 2017upheld the convictionof a Virginia man for trying to extort an apology from an ex-girlfriend who dumped him. The man had threatened to expose on social media that she was a stripper and a prostitute unless she apologized for how she treated him. The appeals court said it didn’t matter whether the jilted man had a legitimate grievance; his threat amounted to extortion because it had nothing to do with why he thought he was entitled to an apology.

The Enquirer’s alleged actions may put the government in a difficult position. Prosecutors have said American Media provided “substantial and important” assistance to their investigation that has directly implicated Mr. Trump.

Mr. Cohenpleaded guilty to nine crimeslast year, including two campaign-finance violations related to hush-money payments he arranged during the 2016 presidential campaign to two women who said they had sexual encounters with Mr. Trump. Mr. Cohen, who is expected to soon begin a three-year prison sentence, told a federal judge that Mr. Trump directed both illegal payments.

As part of the government’s investigation, American Media admitted that it coordinated with the Trump campaign topay $150,000 to one of the women, former Playboy model Karen McDougal, to prevent her story from influencing the 2016 election.

David Pecker, the publisher’s chief executive, also told prosecutors about Mr. Trump’s involvement in the payment scheme andreceived immunity for testifying before a grand jury in the Cohen investigation, The Wall Street Journal has previously reported.

Mr. Pecker has had a relationship with Mr. Trump for decades. He has previously acknowledged buying embarrassing stories about Mr. Trump and burying them, a practice known as “catch and kill.” American Media has denied there were any political motives behind the report on Mr. Bezos.

Write toNicole Hong at[email protected]

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