Did AMI Extort Jeff Bezos and Jeopardize its Cooperation Agreement?
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In December of 2018, American Media Inc. (“AMI”), publisher of the National Enquirer, entered into a cooperation agreement with federal prosecutors from the United States Attorney’s Office for the Southern District of New York. AMI had been accused of making an illegal campaign contribution to President Trump’s campaign in the form of payment to Karen McDougal in exchange for the exclusive right to her story regarding her affair with President Trump. The intent behind the payment was to use their exclusive right to the story to suppress it, thus conferring a benefit on the campaign.
A cooperation agreement provides, in sum and substance, that in exchange for providing information to the federal government, the government will inform the court of such cooperation when it comes time to impose a sentence. It is a key component of every cooperation agreement that the cooperating witness commits no additional crimes during the course of the cooperation. If the cooperating witness does commit a crime while subject to a cooperation agreement, the federal prosecutors have the right to rip up the agreement and prosecute the cooperator to the fullest extent of the law.
On February 7, 2019, Jeff Bezos, founder and CEO of Amazon, revealed to the world that AMI had obtained intimate photographs of him and was threatening to release those photographs unless Mr. Bezos stopped investigating how they had obtained those photographs and other personal and potentially embarrassing materials. The question on everyone’s mind is whether AMI committed an additional crime by threatening to release the photographs unless Mr. Bezos ceased his investigation. If they did, AMI’s cooperation agreement could be discarded as readily as an old issue of the National Enquirer.
Extortion under the federal law is governed by 18 U.S.C. §875(d) and prohibits one from communicating a threat to injure someone’s reputation with an intent to extort money or something of value.
Whether AMI committed the crime of extortion will turn on two factors. First, was the communication intended to be perceived as a threat? AMI’s statement that they would release the pictures must have been subjectively intended to be a threat. Put differently, AMI had to intend that the message credibly communicated to Mr. Bezos that AMI would inflict injury on him unless he cooperated with their demands. That inquiry will turn on the precise language AMI used in its communications to Mr. Bezos.
The second factor is whether ceasing an investigation is something of “value” within the meaning of the statute. Typically, an indictment under the federal extortion law involves parting with a tangible object or money as a result of a threat. It is not clear that ceasing to investigate a company is sufficiently valuable within the meaning of the statute.
Federal prosecutors are meeting with Mr. Bezos to determine whether AMI did attempt to extort him. We should learn whether the Government intends to prosecute AMI and rip up its cooperation agreement in short order.