Gossip: Billionaire 'Set Me Up'
Suspended N.Y. Post Contributor Denies Extortion Attempt

By Howard Kurtz
Washington Post Staff Writer
Tuesday, April 11, 2006

Jared Paul Stern, the New York Post contributor accused of demanding money in exchange for protection from damaging gossip, yesterday accused a Beverly Hills billionaire of trying to "set me up."

In a lengthy interview, Stern maintained that supermarket magnate Ron Burkle "finally badgered me into using the word 'protection' " during secretly recorded conversations, and that he was merely trying to persuade Burkle to invest in his Skull and Bones clothing line. In a follow-up interview, however, Stern said he was also pitching his services to Burkle as a media consultant, and that their conversations included advice on how to deal with the tabloid's gossip-drenched Page Six, where Stern was a part-time writer.

"It was a little bit of a quid pro quo," said Stern, who has been suspended by the Post. "We help each other."

Two people familiar with the three hours of conversations recorded during two meetings in Burkle's Manhattan loft last month -- at which Stern asked for $220,000 -- said it was Stern who kept bringing up the idea of compensation and that Burkle merely reacted to his proposals. They declined to be identified because prosecutors have asked them not to discuss the case.

"The tapes clearly show that Mr. Burkle never had any interest in investing in the clothing company and no interest in hiring him as a media or any other kind of consultant," said Michael Sitrick, a spokesman for Burkle. He dismissed as "absolutely untrue" Stern's suggestion that Burkle had initiated the conversations about hiring him, and Stern's charge that Burkle was "out for vengeance."

Sitrick noted that before the second conversation at the apartment -- which was monitored by two FBI agents and a federal prosecutor hiding two floors above -- Burkle was advised by authorities on what to say and not to say.

After that March 31 meeting, Stern e-mailed information about wiring a $100,000 down payment to his bank account. Two days later, Stern sent an e-mail that appeared to indicate he was already helping Burkle deal with negative publicity at the Post. "The Garrard item was toned down," Stern wrote a Burkle aide, referring to a brief story the day before on Burkle's investment firm acquiring the jeweler Asprey & Garrard.

"Forgot to mention a story on Ron was proposed for the next issue of Page Six mag but think we can take care of it," Stern added.

The conflicting claims about the conversations that triggered an FBI investigation of Stern came as questions surfaced about Richard Johnson, the editor of Page Six.

A Post spokesman confirmed a New York Daily News report that Johnson received a lucrative favor from Joe Francis, producer of the "Girls Gone Wild" video series, whose partying habits are often positively described on the page. Spokesman Howard Rubenstein said Francis threw a bachelor party for Johnson at his Mexican estate last month -- the News estimated the cost at more than $50,000 -- and that one of Johnson's guests was flown there on Francis's private jet. Stern mentioned the party to Burkle in describing how to deal with Page Six.

Rubenstein also confirmed that ABC and Mercedes-Benz gave Johnson a free trip to the Oscars last month, complete with first-class airfare, a stay at the Four Seasons and a car and driver.

Editor in Chief Col Allan "has not seen any favorable treatment given to those people who have hosted any of his Page Six staff," Rubenstein said, declining to address whether such favors were proper.

Stern, 36, is a dapper nightclub-hopper who started his first gossip column at the Bennington College student paper and says he loves the "visceral feeling" of being able to "ride the subway to work and everyone's looking at what you wrote." Burkle, 53, is a press-shy mogul, Democratic Party fundraiser and potential bidder for a dozen McClatchy newspapers who tries to avoid the limelight even as he hangs out with celebrities.

"On reflection, it was an error in judgment to continue the business discussion about the clothing company" while also talking about "the coverage that he was getting in the paper," said Stern, who was captured on tape comparing the arrangement he was proposing to the "Mafia." "I did absolutely nothing remotely illegal and never intended any kind of extortion."

Stern's lawyer, Joseph Tacopina, said he will press the Post to reinstate Stern. "It's one thing if he said, 'Give me money or else I'm going to make sure bad stories are printed about you,' " Tacopina said. "He didn't." While insisting that Stern broke no law, Tacopina said of the conversations: "It may be a fine line. To the common person, it doesn't sound right."

Stern said that when he met Burkle for the first time last June, the billionaire complained that Page Six kept "beating me up" by running inaccurate items about him. Stern recalls telling him, "If you want to improve relations, give us some stuff. You know a lot of people, you have famous friends you hang out with."

Stern said he also tried to interest Burkle in investing in his clothing line. Burkle's assistant, Kevin Marchetti, later ordered 60 shirts at a cost of $5,700, but returned some of them because, Marchetti wrote, "Ron just wants all black."

In December, Burkle complained about the inaccurate coverage in a letter to Post owner Rupert Murdoch, and Allan, the top editor, wrote back to say that reporters would check with Burkle on any future item. Two days later, the Post reported -- without calling -- that Burkle had flown a group of celebrities to Aspen, Colo., which never happened.

Burkle was annoyed last month when the Post reported that "party-boy billionaire Ron Burkle . . . is looking to spend 'up to $50 million' for a larger Manhattan apartment, where he can entertain more lavishly."

On March 14, Stern e-mailed Marchetti to say that Burkle "has the means" to do something about his negative Post coverage. Three days later Stern wrote, in reference to a picture of Burkle with supermodel Gisele Bundchen: "I was able to argue it off Page 6 . . . this kind of thing can be prevented altogether in time . . . the photographers invent stories to sell the photos of course."

Stern said yesterday he had "exaggerated" his role and that the photo ran elsewhere in the paper. Having realized that Burkle would not invest in his clothing company, Stern said, "I was trying to show him he was in need of advice and strategy. I was saying I can help you."

On March 27, five days after their first secretly taped meeting, Stern wrote that "things are heating up and time is of the essence. . . . Before putting myself on the line, I need a firm commitment." He suggested "a check or wire" to "get the ball rolling."