WASHINGTON — The billionaire wanted to find a way to stop becoming tabloid fodder. A meeting was called. A deal was proffered. And a hidden FBI camera was rolling.
In a city that thrives on gossip of the rawest and juiciest variety, there was one more delicious twist: The target of the undercover sting was a writer for the New York Post's Page Six, the dishiest repository of tawdry tales about boldfaced names.
The federal probe unearthed evidence alleging that gossip peddler Jared Paul Stern solicited $220,000 from a man the New York Post had dubbed a "party-boy billionaire" in exchange for immunity from negative items, the paper confirmed Friday. And in a "Sopranos"-like twist, Stern likened the protection he was offering to a "Mafia" racket.
That the seamy story about Rupert Murdoch's New York Post was cracked open by Mort Zuckerman's Daily News, which competes with the Post for straphanger readers as well as celebrity news, merely added to the mounting Manhattan buzz. If the allegations are true, Post Editor in Chief Col Allan said in a statement, "Mr. Stern's conduct would be morally and journalistically reprehensible, a gross abuse of privilege, and in violation of the New York Post's standards and ethics."
The rival paper was shocked — and loving every second of it.
"In 35 years, I can't recall anything quite like this," Martin Dunn, the Daily News' editor in chief, said Friday. "I know journalists over the years might get a bottle of scotch from someone, but I've never known it the other way around, where someone says, 'I can control accurate and inaccurate stories in return for a huge amount of money.' It's the most extraordinary thing."
Stern, who did not respond to messages left on his office phone Friday, told the Daily News the shakedown allegations are "completely outrageous."
Howard Rubenstein, a spokesman for the New York Post, said an assistant U.S. attorney briefed a lawyer for Rupert Murdoch's News Corp., the paper's parent company, on the allegations Thursday. He said the prosecutor explained that Stern had been "asking for $100,000 up front to not print bad articles and to print good items," and for $10,000 a month after the initial down payment.
Rubenstein said Post staff members were "appalled" and that the paper has agreed to a request from prosecutors to preserve Stern's records and computer hard drive.
Perhaps no city is as addicted to the guilty pleasures of gossip as New York, home of Liz Smith and Cindy Adams, of People and Us Weekly and Vanity Fair. It is a place where each tabloid fields several columnists who work the downtown clubs and the midtown media offices and the power tables at Michael's restaurant, along with scribes from various magazines and Web sites such as Gawker.com, all searching for titillating tidbits about the rich, famous and merely bizarre.
At the center of the probe is Stern, 36, a dapper partygoer known for his fedora and Ralph Lauren suits who markets his own line of clothing online, such as a $95 Kelly green polo shirt with a hot-pink skull-and-crossbones logo.
Andrew Parker, who sells Stern's T-shirts and ties at his Madison Avenue clothing store, called Stern "very affable, always very dapper and elegant. Everyone's shocked. He's probably one of the last guys you'd expect" to get into trouble.
Stern was executive editor of Star magazine for about 18 months at a salary he has said was $300,000, and burned his bridges after he left by granting an interview in which he described the woman who hired him, American Media editorial director Bonnie Fuller, in harshly personal terms.
Stern's target in the alleged scheme was Beverly Hills supermarket magnate Ron Burkle, who once raised $4.5 million for Bill Clinton with a bash at his mansion, emceed by Tom Hanks, at which White House spokesman Mike McCurry jumped into the pool with his clothes on. Burkle's investment firm, the Yucaipa Cos., is attempting to buy 12 newspapers — including the Philadelphia Inquirer and San Jose Mercury News — that the McClatchy chain obtained from Knight Ridder but does not want to keep.
Michael Sitrick, a spokesman for Burkle, said Friday that Burkle's lawyer contacted authorities after Stern sent one of the billionaire's staffers an e-mail that Burkle found troubling.
In the e-mail to staffer Kevin Marchetti — confirmed by Sitrick — Stern wrote: "I understand Ron is upset about the press he is getting. If he's really concerned he needs a strategy for dealing with it and regulating it. It's not easy to accomplish, but he certainly has the means to do so."
Burkle had been complaining to Page Six about what he said was a series of inaccurate items about him and the failure to contact him for comment. Last year, for instance, the page reported that Burkle was "said to have been harassing his leggy ex- lover via e-mail ever since she ended their 2 1/2-year relationship."
Page Six also reported that Burkle was dating supermodel Gisele Bundchen and said that "Tobey Maguire, girlfriend Jen Meyer and babe-alicious blond actress Sarah Foster" were "arriving in Aspen on billionaire Ron Burkle 's private jet for a New Year 's weekend vacation at Burkle's mansion."
Sitrick said Burkle and Bundchen are friends who have never dated, and that the businessman doesn't own an Aspen mansion and did not fly Maguire and the others to the Colorado resort.
Burkle's lawyers wrote to News Corp. about the inaccuracies, Sitrick said. After that, "he got so frustrated that he wrote to Rupert Murdoch, but nothing seemed to be changing."
Burkle, in a statement, said he had not been objecting to unflattering items, just false ones. He said he was shocked, angered and saddened by his conversations with Stern but that investigators have asked him not to discuss the meetings.
In meetings captured by investigators on both videotape and audiotape, Stern told Burkle that he could buy protection from negative gossip for himself and his friends, saying: "It's a little like the Mafia. A friend of mine is a friend of yours."
Burkle, who knew the sessions were being recorded, listened as Stern described the "various levels of protection." The first level, Stern said, would involve Burkle providing gossip about his celebrity friends as a way of putting himself off-limits.
At one point, Burkle asked whether he should hire the fiancee of Page Six Editor Richard Johnson. Stern suggested instead that Burkle invest in his clothing line, Skull and Bones.
Burkle asked whether he could achieve "level 2" protection if he hired two other Page Six staffers, according to the tape. Stern said yes.
Finally, Burkle asked: "How much do I need to pay you to make this stop?" That was when Stern asked for the $100,000 payment and monthly installments of $10,000.
At a second meeting, Burkle asked if he would be pressed to pay even more money.
"It is not a stickup," Stern said. "I am not going to keep coming back to you for something unless there's, you know, more to it." Stern later e-mailed a Burkle staffer with instructions on wiring the initial $100,000 to his bank account.
Stern is widely known in Manhattan gossip circles. His party-hopping was chronicled in a 1997 New York Times Magazine piece. In a 2000 article in the Ottawa Citizen — which describes Stern as a dual U.S.-Canadian citizen — Times columnist Alex Kuczynski was quoted as saying: "To the 24-year-old crowd he's God, but I don't think anyone over 30 takes him seriously unless they're in a state of arrested development and only date models."
Stern told the Web site Black Table last year: "It's hard to feel sorry for celebs with oceans of money who employ armies of sociopathic (expletives) to call you up and bitch about every little item. You sign away your privacy when you become a star or boldface bigshot and agree to play this game. You took our money, so we own you. If you don't like it buy an island and stay on it."