Federal prosecutors are looking into the National Enquirer's handling of a story about Amazon CEO Jeff Bezos' extramarital affair to see if the tabloid's publisher violated a cooperation agreement with prosecutors, two people familiar with the matter told The Associated Press on Friday.
Bezos claims the Enquirer's publisher, American Media Inc., tried to extort and blackmail him. In an extraordinary blog post published Thursday on Medium.com, Bezos said AMI threatened to publish intimate photos of him unless he stopped investigating how the Enquirer obtained his private exchanges with his mistress.
Prosecutors now are looking at whether AMI violated an earlier agreement in which it promised not to break any laws in exchange for avoiding prosecution for campaign finance violations, the people familiar with the matter said. They weren't authorised to discuss the matter publicly and spoke to AP on condition of anonymity.
The high-profile clash has pitted the world's richest man against the leader of America's best-known tabloid, who is a strong backer of President Donald Trump. Bezos' investigators have suggested the Enquirer's coverage of his affair was driven by dirty politics.
A spokesman for AMI did not immediately return a message seeking comment on the investigation, and the US attorney's office in Manhattan declined to comment.
Earlier Friday, AMI said it "acted lawfully" while reporting the story and that it engaged in "good faith negotiations" with Bezos.
Bezos did not say the tabloid was seeking money — instead, he said, the Enquirer wanted him to make a public statement that its coverage was not politically motivated.
The company has admitted in the past that it engaged in what's known as "catch-and-kill" practices to help Trump become president. Trump has been highly critical of Bezos and the Post's coverage of the White House.
"Of course I don't want personal photos published, but I also won't participate in their well-known practice of blackmail, political favors, political attacks, and corruption," Bezos wrote of AMI, in explaining his decision to go public Thursday. "I prefer to stand up, roll this log over, and see what crawls out."
The Bezos affair became public when the Enquirer published a January 9 story about his relationship with Lauren Sanchez, a former TV anchor who is also married. Bezos then hired a team of private investigators to find out how the tabloid got the texts and photos the two exchanged.
Bezos' personal investigators, led by his longtime security consultant, Gavin de Becker, concluded that Bezos' phone wasn't hacked. Instead, they've been focusing on Sanchez's brother, according to a person familiar with the matter.
De Becker and his team suspect Michael Sanchez, a talent manager who touts his support of Trump and is an acquaintance of Trump allies Roger Stone and Carter Page, may have provided the information to the Enquirer, the person said. The person wasn't authorised to discuss the matter publicly and spoke on condition of anonymity.
Sanchez, who is also his sister's manager, has declined to speak with The Associated Press on the record and did not immediately respond to an email seeking comment Thursday. In a tweet, he said de Becker "spreads fake, unhinged conservative conspiracy theories" and "'dog whistle' smears."
Several days ago, someone at AMI told Bezos' team that the company's CEO, David Pecker, was "apoplectic" about the investigation, Bezos said. AMI later approached Bezos' representatives with an offer.
"They said they had more of my text messages and photos that they would publish if we didn't stop our investigation," Bezos wrote.
Bezos wrote that this week, the tabloid's editor, Dylan Howard, emailed an attorney for Bezos' longtime security consultant to describe photos the Enquirer "obtained during our newsgathering."
The photos include a "below the belt selfie" of Bezos, photos of him in tight boxer briefs and wearing only a towel, and several revealing photos of Sanchez, according to the emails Bezos released.
According to the emails, an attorney for AMI offered a formal deal Wednesday: The tabloid wouldn't post the photos if Bezos and his investigators would release a public statement "affirming that they have no knowledge or basis" to suggest the Enquirer's coverage was "politically motivated or influenced by political forces."
Bezos said he decided to publish the emails sent to his team "rather than capitulate to extortion and blackmail," despite the "personal cost and embarrassment they threaten."
In its January 9 story, the Enquirer said reporters followed Bezos and Sanchez "across five states and 40,000 miles" and "tailed them in private jets, swanky limos, helicopter rides, romantic hikes, five-star hotel hideaways, intimate dinner dates and 'quality time' in hidden love nests."
It reported that Bezos sent "sleazy text messages and gushing love notes" to Sanchez, months before Bezos announced he was splitting up with his wife, MacKenzie. The story carries the bylines of Howard and two reporters.
Bezos usually stays out of the public eye, frequently delegating announcements and public Amazon business updates to his executives. He doesn't even speak on the company's quarterly financial earnings call with analysts.
AMI's relationship with Trump has gotten the company into hot water in the past. It admitted to "catch-and-kill" practices as part of a deal with federal prosecutors, who agreed not to pursue charges against the company.
AMI acknowledged secretly assisting Trump's campaign by paying US$150,000 ($222,268) to a Playboy model for the rights to her story about an alleged affair with the then-candidate. The company then intentionally suppressed the story until after the 2016 election.
In September, the Justice Department agreed to a non-prosecution agreement with AMI, which requires the company and some top executives, including Pecker and Howard, to cooperate with authorities.
De Becker is now trying to find a way that federal prosecutors in Manhattan — where the non-prosecution agreement was signed — could investigate the text message scandal, the person familiar with the matter said, though it wasn't immediately clear what, if any, crime the prosecutors would be asked to look into.
It is a federal crime to threaten to injure someone's reputation in exchange for money or a "thing of value," though federal courts haven't made it directly clear whether a public statement, like the one demanded by AMI, could be considered something of value.
Laurie Levenson, a former federal prosecutor and professor at Loyola Law School in Los Angeles, said the allegations potentially put prosecutors in an awkward position because of the deal they had already cut with AMI.
"It shows how complicated and dangerous it is to make an agreement with National Enquirer," Levenson said. "They may have to cooperate, but they're continuing in their ongoing battle with Bezos and others."
But Levenson said it was too difficult to tell if the case amounted to blackmail or extortion without additional context and some prosecutors may be reluctant to charge someone for threatening another with embarrassing material.