WASHINGTON – Amazon CEO Jeff Bezos’ accusation that the tabloid National Enquirer tried to blackmail him with intimate photos could spell new trouble for the company already at the center of multiple scandals, including a hush-money deal involving President Donald Trump.
Prosecutors with the Southern District of New York are investigating the claims and reexamining a non-prosecutorial agreement that has protected the Enquirer’s parent company, American Media, Inc. (AMI) from criminal charges, a person familiar with the matter told USA TODAY.
Bezos, who owns the Washington Post and is a frequent target of the president’s criticism, said in a blog post on Thursday that AMI threatened to publish multiple nude photos him, which he characterized as blackmail and extortion. The company is known for its controversial business practices and the close relationship between its CEO David Pecker and President Donald Trump.
Bezos backed up his claims with copies of emails that showed AMI’s attorney, Jon Fine, laying out terms that included the media company would not publish photos if Bezos put out a statement declaring that AMI’s coverage of him was not “politically motivated or influenced by political forces.”
More: Jeff Bezos is taking on the National Enquirer. Here’s a look at the key players
Federal prosecutors last year secured AMI’s cooperation in an investigation into payments to two women in the final months of the 2016 presidential campaign to prevent them from going public with accusations of extramarital affairs with the president. In return, prosecutors agreed not to bring criminal charges against the company for its role in the scheme.
The agreement required that AMI “commit no crimes whatsoever.”
Whether the allegations Bezos outlined amount to a criminal offense is up for debate and has the legal community torn. AMI has denied wrongdoing and said it will review the negotiations with Bezos.
Making matters more complicated is that federal extortion laws aren’t commonly used against media companies. The Justice Department has long struggled with how to apply criminal laws to news organizations for fear of running afoul of the First Amendment.
“I don’t think there’s any doubt that the Southern District will investigate these claims,” said Harry Sandick, an attorney who formerly served as a prosecutor in the Southern District of New York.
He said while the company is likely to argue its First Amendment privileges, the emails that Bezos published look to be more of an attempt to blackmail rather than negotiate.
“There’s a line between legal and illegal even when you’re a reporter or a media company,” Sandick said. “People are allowed NDAs and other forms of settlements but you aren’t allowed to threaten to harm someone or their reputation in exchange for something.”
Sandick added the revelations will put pressure on prosecutors over the agreement and the decision to shield the company from legal scrutiny.
“I think most prosecutors get angry when they give an entity a break just to see them go out and commit the same type of behavior,” Sandick said. “It makes them [prosecutors] look foolish.”
The allegations against the company seem to be neverending.
Over the last 18 months, AMI has been accused of protecting Hollywood mogul Harvey Weinstein by using its reporters to discredit women that accused him of sexual assault, and of helping to elect Trump to the White House.
More than a year before the election, Pecker met with Trump’s former lawyer Michael Cohen and an unnamed member of his campaign to discuss ways the company could help bottle up damaging stories about Trump.
Just five months ago, AMI admitted to paying a $150,000 settlement to former Playboy playmate Karen McDougal who claimed to have had an affair with the president.
AMI entered into an agreement in September with federal prosecutors in the Southern District of New York that shielded it from potential criminal charges in exchange for its cooperation with their investigation, one of two ongoing criminal probes now encircling the president.
Then on Thursday, Bezos detailed his talks with the company and the allegations of blackmail and extortion.
Renato Mariotti, a former federal prosecutor, said while lawyers could argue both sides of whether AMI’s conduct might be criminal, prosecutors do not have to prove a crime in court to void the agreement they have with the company.
He said if prosecutors allege criminal conduct, it could lead to the end of the agreement and open the door to potential charges against the company and its executives, primarily David Pecker.
While Mariotti said he did not believe prosecutors would take this course, he added AMI’s involvement in this issue with Bezos was not smart.
“The lawyers for AMI knew about this agreement and should have known that due to it, they were under this form of supervision of sorts by the U.S. Attorney’s office,” he said. “When you’re dealing with an entity as powerful as the U.S. Attorney’s office, it’s not smart to test them. This is a time where the company should have been extra careful.”
He added even the “slight risk” that the Southern District could nullify the cooperation agreement “is not worth it.”