New York Daily News - April 7, 2006
The billionaire, the Post and the $220G shakedown Page Six writer wanted $$$ to stop inaccurate coverage
BY WILLIAM SHERMAN DAILY NEWS STAFF WRITER
Jared Paul Stern is one of the Page Six's column's longest-serving writers and the editor of Page Six The Magazine.
A New York Post Page Six staffer solicited $220,000 from a high-profile billionaire in return for a year's "protection" against inaccurate and unflattering items about him in the gossip page, the Daily News has learned.
In two 90-minute meetings, characterized by a shocking breach of ethics, Jared Paul Stern, a fixture on the city's gossip scene who also edited Page Six The Magazine, asked for a series of payments from Ron Burkle, the managing partner of Yucaipa Cos., a conglomerate with interests in supermarkets, celebrity clothing lines, and media.
It was all a setup, a sting monitored by law enforcement, including the U.S. attorney's office and the FBI, who are now investigating the extortion attempt. The meetings, on March 22 and March 31, were videotaped.
The shakedown began with a series of e-mails sent last month by Stern to Burkle.
It reached a boiling point more than an hour into the first meeting after Stern outlined various ways Burkle could buy protection on the gossip page.
An exasperated Burkle finally said, "How much do you want?" after Stern said he could control coverage by Richard Johnson, the column's chief writer, and his staff. "Um, $100,000 to get going and then you could get it to me on a month-to-month, maybe like $10,000," replied Stern.
"Okay, that's a great deal," said Burkle, the subject of numerous Page Six items including a "date" with supermodel Gisele Bundchen, meetings with other women and a nasty breakup with a longtime lover.
Burkle had insisted to Page Six staffers and editors that the items were not true. Among the other false items is a Jan. 1 report that Burkle flew Tobey Maguire, girlfriend Jen Meyer and blonde actress Sarah Foster in his private jet to Aspen, Colo., where they "vacationed at Burkle's mansion."
Burkle does not own a mansion in Aspen, did not fly his private jet to Aspen, and didn't vacation with Foster, Maguire or Meyer.
Last month, the column referred to Burkle, 53, as a "party-boy billionaire."
On Monday, Stern, 36, e-mailed instructions to a designated Burkle employee for a $100,000 down payment to be wired to his New York City bank account, and during the week sent more e-mails wondering where his money was.
Burkle, of Beverly Hills and New York City, has a fortune estimated at $2.3 billion. He had "no comment" on the meetings with Stern, his spokesman Michael Sitrick said last night.
However, said Sitrick, "Both Burkle and his lawyers have repeatedly written and or told The Post's attorneys, editors and management that the articles and items about him on Page Six are inaccurate but to no avail. I couldn't understand what was going on."
Burkle was outraged by the payoff proposition, which began with the e-mails from Stern to Kevin Marchetti, an employee of Burkle's.
Finally, Burkle agreed to a meeting at his Manhattan loft.
He and Stern sat across from each other at a round glass table. Stern, slender with dyed blond hair, wore a sport jacket and blue jeans.
Burkle wore his customary black short-sleeved shirt and jeans.
Describing how Burkle could buy Page Six protection, Stern said, "It's a little like the Mafia. A friend of mine is a friend of yours."
"The rest of the paper wouldn't have to know about it," Stern told Burkle.
Stern, who began working for Page Six more than 10 years ago, is something of a dandy with his own Web site and clothing line. He first met Burkle last summer when the entrepreneur bought about 60 T-shirts and gave them away to his friends, according to a source.
Last fall, Burkle and his attorney Martin Singer complained to Johnson and other Page Six staffers about unfair coverage. They said items were printed without asking Burkle for comment or checking the facts, according to a source.
"I don't mind stories being written about me, but I do mind untrue stories written about me," Burkle said last night through an associate.
Close associates say Burkle is divorced, but is not a womanizer. He recently ended a year relationship with a New York book editor.
Burkle also wrote a personal letter to Rupert Murdoch, chairman of News Corp., which owns the Post. Somebody at the paper "has a personal ax to grind," Burkle wrote, according to the source.
Murdoch did not reply.
But the Post's managing editor, Colin Myler, responded at length and said that in the future, items would be fact-checked and that Burkle would be asked for comment. But more items appeared, including one which didn't mention Burkle by name but hinted at yet another romantic liaison.
Burkle continued to raise his concerns, a source said, and Stern, apparently acting on his own, intervened.
"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," Stern e-mailed Marchetti on March 14. "It's not easy to accomplish, but he certainly has the means to do so."
Two days later, Stern sent Burkle a copy of the item about the purported "date" Burkle had with Bundchen and the first face-to-face meeting was arranged.
During the sessions, the two men sat across from each other at a table while Stern first exhaustively outlined "three levels of protection" that he said Burkle needed.
While known for his overwhelming arrogance during interviews, Stern stumbles in his speech, seems nervous, wrings his hands, and talks in circles while laboriously explaining the operations of Page Six.
Burkle is plainspoken and patient, letting Stern do most of the talking. At times, however, Burkle seems frustrated at Stern's meandering.
"There are various levels of protection," Stern begins, saying for "level one," Burkle would be a source for Page Six and provide items about his celebrity friends as a way of getting immunity for himself.
"If there are any stories you can throw our way, we can establish you as a source," said Stern, but Burkle refused.
He is a major Democratic Party fund-raiser and is a senior adviser to former President Bill Clinton. Sean (Diddy) Combs, Leonardo DiCaprio, Arnold Schwarzenegger, Hillary and Bill Clinton, former Calif. Gov. Gray Davis, former Vice President Al Gore and Bundchen are just a few of his acquaintances.
"Should I hire Richard's wife?" Burkle asked after Stern mentioned that another financier had followed that route. In fact, Stern was referring to Johnson's fiancee. Stern didn't answer directly but rather took a third tack.
"You find some way to be in business with the paper, more of a colleague," said Stern. At another point, Stern asked Burkle to invest in his clothing line, Skull and Bones.
"You want me to buy part of the clothing line? I want to be sure you can be helpful with this," Burkle said.
"I have to tell these guys that you're working with me on the clothing line right now," Stern tells Burkle.
"I'll send a letter, but I don't make investments like that. I'll document it. I like your shirts," said Burkle.
"If you want to buy in, I'll implement all this stuff," said Stern, adding firmly "there won't be any written agreement."
The talk turned to how to deal with other Page Six staffers.
"If I hire Chris [Wilson] and Fernando [Gill], that would be level two [protection]?" Burkle asked.
"Yes," said Stern.
"If I hire Richard's wife that would be level three protection?" "Right," said Stern.
Burkle leaned forward then.
"Tell me what I can do?"
"You know the saying, 'Keep your friends close and your enemies closer?' " Stern said.
"That's why I'm meeting with you," Burkle replied.
And then Stern reminded Burkle, "Being friends with Richard is fine, but that will not stop your problems."
Finally, an exasperated Burkle said, "How much do I need to pay you to make this stop? I need level one, level two protection, level three protection. Maybe hiring Chris, hiring Richard's wife. What do I need to do?"
"Do you want a laundry list or rather ..."
"How much do you want?" asked Burkle.
Stern put his head in his hands, squirmed a bit in his chair and said, "Um, $100,000 to get going and month to month, $10,000."
But that wasn't the end of it. Stern wanted a second meeting and at 4 p.m. on March 31 they sat down again at the round glass table.
Burkle asked for assurances that he wouldn't be asked to pay more money.
"Uhm, well, I mean, it is not a stickup. I am not going to keep coming back to you for something unless there's, you know, more to it," Stern said.
Stern: It's completely outrageous
When the Daily News confronted Jared Paul Stern yesterday, the New York Post scribe said from his desk that the payola allegations were "completely outrageous."
Two hours later, the paper had suspended him "pending the outcome of ... [a] federal investigation."
"Should the allegations prove true, 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," Post Editor in Chief Col Allan said in a statement released by public relations guru Howard Rubenstein.
Allan characterized Stern as a "freelance reporter who sometimes worked two days a week at the New York Post," though he edited the Page Six magazine and wrote the Nightcrawler column.
Stern's boss, Page Six editor Richard Johnson, reached late yesterday by phone, said, "I don't know anything about this. Sounds like horses--- to me. Call Howard Rubenstein ..."
When Johnson left the Post's offices, he met his fiancée, who was waiting with some luggage a Post staffer had brought out.
"They didn't want to have a picture of me carrying my bags out of here," he told his fiancée Sessa von Richthofen.
The couple is reportedly getting married overseas tomorrow.
She replied nervously, "What did you do?"
- William Sherman and Jonathan Lemire