NEW YORK • A Silicon Valley billionaire entrepreneur was outed as being gay by a media organisation.
His friends suffered at the hands of the same gossip site. Nearly a decade later, the entrepreneur secretly financed a lawsuit to try to put the media firm out of business.
That is the bizarre and astounding back story to a legal case that had already grabbed headlines: Hulk Hogan sued Gawker Media for invasion of privacy after it published a sex tape and a Florida jury recently awarded the wrestler, whose real name is Terry Gene Bollea, US$140 million (S$193 million).
Hogan had a “secret” benefactor paying US$10 million for the lawsuit – Mr Peter Thiel, a co-founder of PayPal and one of the earliest investors in Facebook.
A Gawker Valleywag blog post in 2007 was headlined Peter Thiel Is Totally Gay, People and a series of articles about his friends and others who he said “ruined people’s lives for no reason” drove Mr Thiel to mount a clandestine war against Gawker, funding a team of lawyers to find and help “victims” of the company’s coverage to mount cases against Gawker.
In the 2007 post, Gawker said Mr Thiel’s sexual orientation probably explained his “disdain for convention, his quest to overturn established rules”.
He has since publicly acknowledged that he is gay. In 2009, he told PE Hub Network that Valleywag was the “Silicon Valley equivalent of al-Qaeda”.
He said: “It’s less about revenge and more about specific deterrence. I saw Gawker pioneer a unique and incredibly damaging way of getting attention by bullying people even when there was no connection with the public interest.”
Gawker published articles that were “very painful and paralysing for people who were targeted”.
He said: “I thought it was worth fighting back. I can defend myself. Most of the people they attack are not people in my category. They usually attack less prominent, far less wealthy people who simply can’t defend themselves.”
He said he decided several years ago to set in motion a plan to secretly fund multiple cases to try to cripple Gawker.
He has donated to the Committee to Protect Journalists, a non-profit advocate of press freedom. He said he did not believe his actions were contradictory.
“I refuse to believe that journalism means massive privacy violations,” he said. “I think much more highly of journalists than that. It’s precisely because I respect journalists that I do not believe they are endangered by fighting back against Gawker.”
The committee’s executive director, Mr Joel Simon, said that while the group supports a person’s right to “seek civil redress in cases of defamation”, it does not “support efforts to abuse the process by seeking to punish or bankrupt particular media outlets”.
In a statement, Mr Nick Denton, founder of Gawker Media, who was also named in the Hogan suit, said: “Just because Peter Thiel is a Silicon Valley billionaire, his opinion does not trump our millions of readers who know us for routinely driving big news stories including Hillary Clinton’s secret e-mail account, Bill Cosby’s history with women, the mayor of Toronto as a crack smoker, Tom Cruise’s role within Scientology, the NFL cover-up of domestic abuse by players and the hidden power of Facebook to determine the news you see.”
Born in West Germany and raised in California, Mr Thiel became a chess prodigy and a promising lawyer before settling down in the Bay Area to found companies. He achieved demigod status among Silicon Valley business leaders, thanks largely to his role at PayPal, where he became the de facto don of the early employee group known as the PayPal mafia.
Mr Thiel is known for his investment in Facebook, where he is a board member.
He also openly supports a wide array of eccentric philanthropic and social efforts. His Thiel fellowship gives students money to drop out of school and start companies, and he co-founded the Seasteading Institute, which aims to create cities that float at sea, beyond the reach of governments and their laws.
He said he hired a legal team several years ago to look for cases that he could help support financially. He said that estimates of US$10 million in expenses so far were “roughly in the ballpark”.
He added: “I’d underscore that I don’t expect to make any money from this. This is not a business venture.”
The revelation that he was covertly backing Hogan’s case and others has raised new questions about the First Amendment and about the role of big money in the court system.
NEW YORK TIMES, BLOOMBERG