U.S. Markets closed

Bezos’s Stunning Blackmail Charge Intensifies Proxy War With Trump

Nick Turner and Olga Kharif
1 / 4
Bezos’s Stunning Blackmail Charge Intensifies Proxy War With Trump

(Bloomberg) -- A long-simmering feud between Donald Trump and Jeff Bezos took a bizarre turn after the multibillionaire accused allies of the president of brazenly trying to extort him.

In a surprising move that lit up social media feeds worldwide, the Amazon.com Inc. founder and chief executive officer published a blog post on Thursday, alleging that the publisher of the National Enquirer tried to blackmail him with embarrassing photos of Bezos and a woman who wasn’t his wife -- including sexually charged selfies.

The usually media-shy executive also published explicit email exchanges and descriptions of the photos, saying he would rather be embarrassed than extorted.

He also pointed to reports that the Enquirer’s publisher -- American Media Inc. CEO David Pecker -- has worked on behalf of the president. Pecker, Bezos said in his post, “recently entered into an immunity deal with the Department of Justice related to their role in the so-called ‘catch and kill’ process on behalf of President Trump and his election campaign.”

Trump in turn has frequently criticized Bezos and his newspaper, the Washington Post, for everything from taxes and shipping fees to printing “fake news.” On Twitter last month, Trump called the tech executive “Jeff Bozo.”

“It’s unavoidable that certain powerful people who experience Washington Post news coverage will wrongly conclude I am their enemy,” Bezos said in his post. “President Trump is one of those people, obvious by his many tweets.”

Growing Wealth

American Media said in a statement Friday that it believes it acted lawfully in reporting the story of Bezos and his extramarital affair, but that it will investigate claims by the CEO of extortion and blackmail.

“American Media believes fervently that it acted lawfully in the reporting of the story of Mr. Bezos,” the company said. “Further, at the time of the recent allegations made by Mr. Bezos, it was in good faith negotiations to resolve all matters with him. Nonetheless, 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.”

Asked if the president was aware of Bezos’ accusations, White House spokesman Hogan Gidley told reporters, “I’m not sure if he’s aware of it, and we’re not going to get into a conversation about something between Jeff Bezos and a tabloid.”

Asked when Trump last spoke with Pecker, Gidley responded, “I’m not aware of it.”

Ironically, becoming a Trump nemesis doesn’t seem to have hurt the Amazon founder’s fortunes. Since Trump’s election, no one has made more money than Bezos, who became the world’s richest person thanks to a gold rush of e-commerce, web advertising and cloud computing.

Bezos’ wealth currently is valued at $133.9 billion, according to the Bloomberg Billionaires Index.

Trump has threatened Amazon with antitrust prosecution, but nothing has materialized. The president also pushed the U.S. Postal Service to charge the e-commerce giant more for package delivery, based on his belief Amazon has a sweetheart deal. That led only to a Treasury Department report proposing that the post office increase rates. The report didn’t provide explicit instructions on how much more the Postal Service should charge.

Divorce Announcement

But it hasn’t been smooth sailing for Bezos. Last month, he and his wife of 25 years, MacKenzie, announced plans to divorce. Within hours, the Enquirer published an expose on Bezos’ relationship with former TV anchor Lauren Sanchez. The supermarket tabloid’s story included racy texts exchanged with Sanchez, calling her Bezos’ mistress.

Bezos, 55, hired investigators to find out how the texts were obtained and whether the story was politically motivated. The executive also said the Post’s coverage of Jamal Khashoggi’s murder -- a columnist for the newspaper who was killed in Istanbul last year -- “is undoubtedly unpopular in certain circles.”

Bezos’ investigators weren’t tied to the Washington Post, but he acknowledged that owning the newspaper is a “complexifier.” When Bezos aired a Super Bowl ad promoting the newspaper on Sunday, one of Trump’s sons, Donald Trump Jr., called it an attempt for “undeserved credibility.”

“How about report the news and not their leftist BS for a change,” he tweeted.

Copyright Issue

Bezos has portrayed himself as a champion of journalism, but his clash with the Enquirer may put him on some shaky ground. In his exchange with a representative for AMI, he argued that the Enquirer wasn’t allowed to publish the compromising images because they belonged to him and are protected by copyright laws.

AMI responded that it was allowed to publish the photos out of a public interest, since “millions of Americans have a vested interest in the success of Amazon.”

Gawker made a similar argument when it published a sex tape featuring professional wrestler Hulk Hogan. The website lost its case and ultimately filed for bankruptcy.

In Bezos’ case, the question isn’t clear-cut, said Mary Ellen Roy, a lawyer at Phelps Dunbar LLP in New Orleans specializing in First Amendment issues.

Any images taken in public are fair game, she said. But if the photos were captured in a private room, they will have to be proven newsworthy. “Mr. Bezos is a businessman and not a political figure -- it’s not necessarily newsworthy that he has a mistress,” she said.

‘Fighting Back’

In the Hulk Hogan case, the legal fight against Gawker was financed by billionaire Peter Thiel. He was outed as gay by a Gawker website in 2007 and told the New York Times he believed it was worth “fighting back” against the business.

The Bezos-Enquirer tussle may be another instance where the legal questions are eclipsed by a broader battle.

“Let’s face it,” said Corynne McSherry, legal director for the Electronic Frontier Foundation in San Francisco. “Here we have another place where a copyright dispute is serving as a proxy for the real fight.”

(Updates with White House comments starting in eighth paragraph.)

--With assistance from Alyza Sebenius.

To contact the reporters on this story: Nick Turner in Los Angeles at nturner7@bloomberg.net;Olga Kharif in Portland at okharif@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Brian Bremner

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.