Amazon CEO Jeff Bezos last month accused National Enquirer publisher American Media of blackmail amid a high-profile fight over the source of racy texts the billionaire sent to his girlfriend. He also suggested AMI orchestrated the scandal as a political favor to President Trump and Saudi Arabia.
As it turns out, the source of those texts was Michael Sanchez, the brother of Bezos’ lover – not illegal hacks of the billionaire’s smartphone or electronic communications. Sanchez sold the billionaire's secrets for $200,000 to AMI, people familiar with the matter told The Wall Street Journal.
The newspaper’s reporting added more details to a February report by the Daily Beast that fingered Sanchez as the source of the leaked texts. Behind the scenes, AMI executives squabbled over whether to publish the texts, given worries about the company’s financial condition, sources told the WSJ.
The drama started last fall when Sanchez told the tabloid about his sister’s relationship with Bezos, although the Enquirer already had started to dig into his personal life. Sanchez is a Hollywood talent agent with a history of feeding celebrity gossip to the publication’s editors, sources told the Journal.
As the Enquirer negotiated to buy the materials from Sanchez, AMI CEO David Pecker had reservations about publishing the story. He was worried that Bezos would sue, burdening the publisher with legal fees during a period of serious financial strain.
AMI was in the middle of refinancing more than $400 million in debt, an effort that was threatened last fall after the publisher admitted to making hush money payments to a former Playboy model who claimed she had an affair with Trump. AMI reached a non-prosecution agreement with the U.S. attorney’s office in Manhattan in exchange for cooperating with an investigation of the Trump campaign.
AMI’s investors urged Pecker to resolve the dispute with Bezos,. The ensuing discussions led to what Bezos perceived as a verbal threat from AMI's Chief Content Officer Dylan Howard and deputy general counsel Jon Fine. The Enquirer planned to publish more embarrassing texts and pictures if he didn’t stop an investigation into the political motivations for AMI’s reporting, Bezos claimed in a blog.
After Bezos accused AMI of blackmail, the Justice Department started an investigation of whether AMI had violated the terms of its previous nonprosecution agreement in the hush-money scandal. AMI also is conducting an internal investigation, by an outside law firm, of the Bezos dispute, the WSJ reported.
The outcome of those investigations remains to be seen, leaving a legal cloud hanging over AMI.