WASHINGTON • Federal prosecutors are reviewing accusations made by Amazon chief executive Jeff Bezos to determine if the National Enquirer's parent company may have violated the terms of a non-prosecution agreement struck over a hush-money payment meant to help Mr Donald Trump's chances in the 2016 election, according to people familiar with the matter.
Mr Bezos - the founder of Amazon, the world's richest man, and the owner of The Washington Post - last Thursday posted an extraordinary account accusing the Enquirer's parent company, American Media Inc (AMI), of trying to extort him into issuing a public statement about the tabloid in exchange for the magazine not publishing embarrassing and sexually explicit photos of him.
Mr Bezos' post suggested that AMI's conduct, which he called "extortion and blackmail", might be a violation of the non-prosecution agreement that the company signed with federal prosecutors in New York in September as part of the Justice Department's investigation into campaign finance violations by Michael Cohen, President Donald Trump's former personal lawyer.
The deal requires AMI to "commit no crimes whatsoever" for a period of three years; if AMI breaks the terms of the deal, it could be charged with campaign finance crimes.
As part of the agreement, AMI admitted it paid former Playboy model Karen McDougal US$150,000 (S$203,000) before the 2016 election to silence her allegations about an affair with Mr Trump.
"Assuming AMI's continued compliance with the agreement, the office has agreed not to prosecute AMI for its role in that payment," the prosecutors wrote in a letter spelling out the terms of the deal.
Two people familiar with the matter said the office of the US Attorney in Manhattan is reviewing Mr Bezos' accusations to determine whether AMI's conduct regarding his photographs amounts to a violation of the terms of that agreement. It was unclear how long such a review might take.
A spokesman for the US Attorney's office declined to comment.
AMI insisted last Friday that it had not broken any laws but pledged to thoroughly investigate the extortion claims.
"American Media believes fervently that it acted lawfully in the reporting of the story of Mr Bezos. Further, at the time of the recent allegations made by Mr Bezos, it was in good faith negotiations to resolve all matters with him," said the statement from the board, which is chaired by AMI's chief executive, Mr David Pecker.
"Nonetheless, in (the) 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," the statement said.
Mr Bezos said last Thursday that the Enquirer indicated it would publish the photos if he did not back off an investigation of the tabloid.
The battle between the business titan and the supermarket tabloid had been building since last month, when the Enquirer notified Mr Bezos that it intended to publish text messages revealing his relationship with former TV anchor Lauren Sanchez.
About two days later, Mr Bezos announced he was divorcing his wife, and the Enquirer's story appeared shortly after that announcement. He also hired investigators to find out how AMI had obtained the texts.
In a remarkable first-person post to the online publishing platform Medium, Mr Bezos said AMI had recently threatened to publish salacious pictures unless he said publicly that he had no basis to suggest the Enquirer's coverage was politically motivated. To back up those accusations, Mr Bezos shared e-mails he had received from one of AMI's lawyers, Mr Jon Fine.
In an e-mail sent last Wednesday, Mr Fine wrote to offer terms of a proposed settlement - that the texts and photos would not be published as long as Mr Bezos and his investigator issued a statement "affirming that they have no knowledge or basis for suggesting that AM's coverage was politically motivated or influenced by political forces, and an agreement that they will cease referring to such a possibility".
The Bezos matter carries echoes from another long-ago FBI investigation, in which a New York Post freelance gossip writer came under scrutiny after billionaire Ron Burkle accused him of trying to extort money in exchange for gentler coverage.
That 2006 case, which featured secretly recorded negotiations between the two sides, ultimately led to no charges being filed.
The gossip writer accused Mr Burkle of trying to entrap him because he was angry over what had been written.
The Bezos accusations against AMI come at a vulnerable time for the firm, as the conditions of its non-prosecution agreement will last until at least September 2021.
The conditions for that deal include a promise that the company will "truthfully and completely disclose all information" requested by New York prosecutors.
It also requires that the company make available any documents or witnesses that prosecutors request.
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