Historical Stock Chart
6 Months : From Dec 2018 to Jun 2019
By Julie Bykowicz and Lukas I. Alpert
The dust-up between Amazon.com Inc. founder Jeff Bezos and National Enquirer parent American Media LLC has raised questions about the media company's connections to Saudi Arabia.
American Media has had plenty of contacts with Saudi Arabia in recent years, including seeking financial backing from Saudi investors to fund acquisitions and producing a magazine celebrating the country's new crown prince.
It also sought advice last year from the U.S. Justice Department over whether the publisher should register as a foreign agent, a person familiar with the matter told The Wall Street Journal.
The issue of the ties came up last week when Mr. Bezos took to the internet to push back against what he said was an extortion attempt by the National Enquirer against him over an extramarital affair that the tabloid reported on last month featuring photos and texts. He said he launched his own probe into how the publication obtained his texts as well as its motives and wrote that the "Saudi angle seems to hit a particularly sensitive nerve."
An attorney for American Media Chief Executive David Pecker on Sunday denied the company had engaged in extortion and said the source of the information for the coverage "was not Saudi Arabia."
Adel al-Jubeir, a Saudi government official who was in Washington Friday, characterized the dispute between Mr. Bezos and American Media as a "soap opera," Asked whether the kingdom played a role, he said, "as far as I know: flat no."
In recent years, American Media sought Saudi financial backing to finance a failed effort to acquire Time magazine, Sports Illustrated, Fortune and Money, the Journal reported last year.
American Media confirmed the contacts but said the only deal that has ever been discussed with Saudi investors was the expansion of the Mr. Olympia bodybuilding competition, which American Media owns, into the Middle East and North Africa.
The lawyer for Mr. Pecker, Elkan Abramowitz, on Sunday on ABC said American Media sought financing "from the Saudis, but never obtained any."
American Media also produced a promotional magazine about Saudi Arabia. To commemorate Saudi Crown Prince Mohammed bin Salman's visit to the U.S. in March 2018, American Media published 200,000 copies of a 97-page, advertisement-free glossy magazine titled "The New Kingdom," promoting the country and its young prince, then 32 years old.
In a sign American Media was concerned its connection to Saudi Arabia could become an issue, the company sought advice from the Justice Department last year about whether it should register as a foreign agent -- a status under which any organization engaged in public relations under the direction or control of a foreign government may fall -- according to a Justice Department letter to the company responding to its inquiry. The publisher wrote to the Justice Department after several news outlets wrote about the publication of the pro-Saudi magazine.
The Justice Department posted its response in redacted form. Although American Media isn't named in the letter, the details clearly reference the media company.
A person familiar with the matter confirmed American Media wrote to the Justice Department after publishing the magazine celebrating Prince Mohammed. "Frankly, it was done to kiss his ass when he came to visit in the hopes he'd invest in the company and it didn't work," the person said of the magazine. "There was nothing more to it than that."
Justice Department officials didn't respond to requests for comment.
The publisher gave an adviser to Saudi Arabia a draft of the magazine and followed the adviser's editorial suggestions, according to the letter, which was dated July 13, 2018.
American Media said in the past that Saudi officials played no role in the production of the magazine.
The company told Justice Department officials in the letter that although it followed the editorial and photography suggestions of the adviser, it wasn't under any contractual obligation to do so. The publisher also told the Justice Department that it didn't receive any foreign money to produce the magazine.
Based on those assertions, the Justice Department said the media company didn't need to register as a foreign agent, noting that conclusion could change if the facts in the matter "are different in any way from those depicted in your submission."
The magazine, which hit U.S. newsstands just ahead of Prince Mohammed's March visit and sold for $13.99, drew attention at the time because of the close relationship that Mr. Pecker and President Trump have. The special issue, which remained on sale for three months, included a glowing editorial about Saudi Arabia by Kacy Grine, a French financial adviser who people familiar with the matter said visited Mr. Trump at the White House in July 2017 with Mr. Pecker and American Media Chief Content Officer Dylan Howard. Mr. Grine didn't respond to a request for comment.
Asked on "This Week" Sunday if the magazine was published in an attempt to curry favor with Saudi Arabia, Mr. Abramowitz said it was published "for journalistic reasons."
At the July 2017 meeting, Mr. Trump alluded to the Enquirer's positive coverage of his election campaign and presidency.
"Editor man, editor man, how many more covers of the Enquirer have I been on than Arnold Schwarzenegger?" Mr. Trump asked Mr. Howard, according to people familiar with the matter.
A White House official said that Mr. Trump recalled the Oval Office meeting with Mr. Pecker and others and that he called the American Media CEO a "great guy," the Journal reported last year.
Mr. Pecker has admitted buying embarrassing stories about Mr. Trump and burying them, a practice known as "catch and kill." In exchange for immunity, the publisher and Mr. Pecker last year agreed to cooperate with federal prosecutors investigating former Trump lawyer Michael Cohen, who arranged payments during the 2016 campaign to silence two women who alleged sexual encounters with Mr. Trump. Federal prosecutors in Manhattan are examining whether the Enquirer's dealings with Mr. Bezos violated the nonprosecution agreement, according to people familiar with the matter
The crown prince visited Mr. Trump at the White House during his March 2018 trip.
Since the crown prince's visit, his reputation and the relationship between the U.S. and Saudi Arabia have frayed. In October, Washington Post columnist Jamal Khashoggi was killed at a Saudi consulate in Turkey, which the CIA has concluded was likely ordered by the crown prince. The Saudi government has contested the findings.
"The Post's essential and unrelenting coverage of the murder of its columnist Jamal Khashoggi is undoubtedly unpopular in certain circles," Mr. Bezos wrote in his blog post Thursday.
Write to Julie Bykowicz at email@example.com and Lukas I. Alpert at firstname.lastname@example.org
(END) Dow Jones Newswires
February 11, 2019 13:29 ET (18:29 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.