NY- Last Dec. 16, California billionaire Ron Burkle penned a personal letter to Rubert Murdoch, chairman of News Corp., which owns the New York Post.
The letter set in motion a chain of events that would trigger an unprecedented scandal in journalism, devastate the Post and rock its franchise column.
The salutation was simply “Rupert” and Burkle called him a friend, signing “Best Regards, Ron.”
By turns, frank and colloquial, Burkle’s point was still crystal-clear: He was “getting screwed” by Page Six, the Post’s lead gossip column.
“I’m not quite sure what to do when your paper keeps writing things about me that are not true,” he said, citing reports that he was buying Elite Models Management for former President Bill Clinton to run, owned shares of Barnes & Noble, and leased a yacht for Clinton and Michael Jackson.
“I hate to bother you with this; but at the end of the day, it is your newspaper,” Burkle concluded.
Increasingly frustrated as more false items about him appeared in Page Six, Burkle had no response from Murdoch. A Post editor’s promise that Burkle’s complaints would be addressed was an empty one.
False reports about Burkle’s romantic life continued to appear in the column.
Then, in a series of e-mails to a Burkle aide, Page Six writer Jared Paul Stern implied that he could solve the billionaire’s problems. Last month, Stern stepped up his ploy and in two secretly videotaped meetings with Burkle, he solicited “protection” money – $100,000 down payment and $10,000 a month to be wired to Stern’s bank account.
The Manhattan U.S. attorney’s office and the FBI have now launched a sweeping investigation of the Page Six operation.
New York FBI spokesman James Margolin and Bridget Kelly, spokeswoman for the U.S. attorney’s office, both declined comment.
Sources said that Ronnie Abrams, chief of the general crimes bureau at the U.S. attorney’s office, is in overall charge of the investigation.
When confronted with the extortion scam on Thursday, the Post suspended Stern, who has retained high-profile attorney Edward Hayes.
“He regrets what was certainly an inappropriate conversation, something not thoroughly thought through,” said Hayes.
“It’s questionable whether it’s a crime and I don’t know whether there will be a criminal prosecution,” said Hayes, adding that so far, Stern has not been questioned by the FBI.
Hayes is also the longtime attorney for Page Six editor Richard Johnson, who was to be married today to Sessa von Richthofen aboard a yacht sailing out of the Palm Beach (Fla.) Yacht Club.
Post spokesman Howard Rubenstein said Johnson “has never accepted money from anybody” in return for his reporting.v “The U.S. attorney has only inquired about Jared Stern,” said Rubenstein. “They have not asked about any of the other columnists or writers who work for the Post. They did ask the Post to preserve the hard drive on Stern’s computer and any other documents that are pertitnent for his employment. The Post said they would cooperate fully with the investigation.”
Asked whether the Post will implement new ethics guidelines as a result of the scandal, Rubenstein said, “It’s only one person, the gossip page is the best page in the world and there’s no reason to change any guidelines.”
Stern, meanwhile was holed up with his wife yesterday at his sprawling white Victorian country home in Oak Hill, N.Y., about 120 miles northwest of the city.
He didn’t come to the door and called the State Police to have a reporter removed from the property.
In a statement issued yesterday, Burkle’s spokesman Michael Sitrick, said: “For more than a year, Mr. Burkle, his attorneys and other representatives have been complaining to New York Post editors, management and attorneys about the inaccurate items that have appeared about him in the Post’s Page Six column. After his representatives’ pleas produced no results, Mr. Burkle wrote a personal letter to the Post’s owner Rupert Murdoch. Mr. Burkle has repeatedly said that he understands that a person might not always like what is written about him, but that his complaints were not about unflattering items, but false ones. Unfortunately, even his plea to Mr. Murdoch appeared to fall on deaf ears.
“Mr. Burkle said that while he has been asked not to discuss the details of Mr. Stern’s conversation with him – because of the ongoing investigation – he did say that the story in the New York Daily News was accurate and that he was shocked, angered and saddened by what he heard.”
March 20 – Burkle’s top security aide steps up independent investigation of potential extortion bid after Stern sends e-mails suggesting he can help the California investor.
March 22 – Burkle and Stern meet face to face. Stern solicits $220,000 annual payoff to protect Burkle from false coverage in Page Six. Meeting is secretly videotaped.
March 23 – Manhattan U.S. attorney’s office notified of meeting. FBI begins probe.
March 29 – Daily News receives tip that Burkle may be the victim of an extortion attempt.
March 31 – In a second videotaped meeting, Stern firms up details of the payoff with Burkle.
April 6 – Daily News prepares to publish exclusive details of the “Page Fix” scandal and calls Stern and Post officials for comment. Hours later, Stern is suspended and the Post moves a story on its Web site in an attempt at damage control.
April 7 – Daily News’ exclusive account of the scandal shocks the city as newspapers, Web sites and electronic media around the country pick up the story.
Supermodel Gisele Bundchen says she’s been friends with Ron Burkle for seven years but has never dated the billionaire as reported in Page Six on March 17.
That gossip page item is just one of many Burkle says is untrue and was not checked for accuracy by Page Six staffers.
Bundchen backed him up in an interview with the Daily News.
“They are making up all these lies, like we are seeing each other and other lies about Ron which is ridiculous,” said Bundchen, whose multimillion-dollar contract with Victoria’s Secret is the biggest in the fashion industry. “They said we went out to dinner and they say we are dating and I said ‘what the hell is going on here’ because I’ve known Ron for years.
“We’re neighbors in L.A. and we’re neighbors in New York, and I knew his girlfriend. They went out for three years, and now they’re saying these nasty things about him.”
After the Post published the “date” item, Bundchen said she telephoned Burkle. “I said ‘What else can they make up? It’s ridiculous.'”