We know how to destroy people It's what we do. We do it without creating liability.

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from new york times

In Page Six Inquiry, Gossip Swirls Around Gossips
By CAMPBELL ROBERTSON, ALLISON HOPE WEINER and WILLIAM K. RASHBAUM

The New York Post is cooperating with a federal investigation into whether a longtime contributor for the Page Six gossip column — the avidly read daily log of wrongdoing, double-dealing and sexual indiscretions by celebrities both minor and major — tried to extort money from a California billionaire, according to a spokesman for the newspaper.

Several people involved in the investigation said the reporter, Jared Paul Stern, had been captured on a video recording demanding a $100,000 payment and a monthly stipend of $10,000 from Ronald W. Burkle in return for keeping negative information about him out of the paper. Mr. Stern was suspended Thursday pending the outcome of the investigation, and could be dismissed, according to Howard Rubenstein, the spokesman.

But while the accusations against Mr. Stern are serious, it is the specter — raised by at least three people who say they know what is on the tapes — that Mr. Stern implicated several celebrities and New York power figures in an undisclosed, symbiotic relationship with Page Six that prompted an extraordinary day of full-throated and at times gleeful gossip among those who love, hate and avidly read the column.

Those who say they know what is on the tape said Mr. Stern named Harvey Weinstein, the co-founder of Miramax films, and Ronald O. Perelman, the chairman of Revlon, as being among those who have had their coverage on the page finessed. Through a spokesman, Mr. Weinstein flatly denied any improper relationship with the column and its main editor, Richard Johnson.

Mr. Perelman's company once hired the fiancée of Mr. Johnson, Sessa von Richthofen, whom he is marrying today, as an administrative assistant. The executive who hired her said yesterday she had not been pressured into hiring her.

In the recordings, Mr. Stern never asserted that money had been used for preferential coverage.

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Mr. Rubenstein, who said that lawyers for the newspaper were reviewing Mr. Stern's work, added that the authorities had not asked for information concerning any other reporters for the gossip column. He said the paper was preserving Mr. Stern's computer records and other material for the authorities to review.

One federal law enforcement official said the investigation was in its early stages and that it was unclear if any charges would be brought against Mr. Stern.

Mr. Stern's lawyer, Edward Hayes, defended the writer, who has also edited a Page Six magazine for The Post. "Jared did not and could not guarantee him good coverage or protect him from bad coverage," he said of Mr. Stern's dealings with Mr. Burkle. "Jared made a mistake. He's sorry if it embarrassed The Post and nothing actually happened, and hopefully it will be over and done with."

Mr. Stern said last night, "I apologize for causing The New York Post any embarrassment after almost 11 years of loyal and dedicated service, and hope they would not rush to judgment."

Gary Ginsberg, an executive vice president with the News Corporation, Rupert Murdoch's international media company that owns The Post, said of the investigation, "We're taking it very seriously."

But he added that the allegations had no broader implications for The Post, and noted that Mr. Stern was a part-time contributor. He said that the Page Six magazine had appeared only once. "No one's trying to make any excuses for his alleged behavior, but in terms of what it means for the franchise, I think the franchise is as strong as any in journalism. This is highly aberrational," he said.

The investigation was front-page news for The Post's top rival, The Daily News, which first reported many of the details of the accusations against Mr. Stern.

The scandal that is rattling Page Six began about a year ago, when items about Mr. Burkle, a supermarket magnate and Democratic fund-raiser, began appearing in the column more often.

The accounts of Mr. Burkle's dealings with Mr. Stern and The Post are based on interviews with several associates of Mr. Burkle, as well as two other people who said they knew what is on the tapes. They all refused to be named because of the federal investigation.

Associates of Mr. Burkle said that Page Six items about the billionaire began appearing last year that were wildly inaccurate, without Mr. Burkle's even being called for comment.

Last summer, one associate said, Mr. Burkle arranged to meet Mr. Stern at the Palace Hotel in Manhattan after a friend suggested Mr. Stern could give him some insight into Page Six. There, Mr. Stern asked Mr. Burkle to become a source, dishing on his famous acquaintances. Mr. Burkle declined but as a favor agreed to buy 60 shirts from Skull and Bones, Mr. Stern's clothing line.

The associate said Mr. Burkle protested to editors, including Mr. Johnson and even wrote a personal letter of complaint to Mr. Murdoch, a copy of which was obtained by The New York Times. "Every time I am mentioned in your newspaper," the letter read, "the facts are just plain wrong."

The letter concluded: "I hate to bother you with this; but at the end of the day, it is your newspaper."

Colin Myler, the paper's executive editor, wrote back and promised to correct any errors, the associate said. Mr. Burkle also had his lawyer, Martin D. Singer, send several letters threatening litigation, according to several people with knowledge of the correspondence.

On March 14, the associate said, an employee of Mr. Burkle's received an e-mail message from Mr. Stern, a contributor who worked two days a week for Page Six, suggesting that Mr. Burkle had "the means" to change the column's treatment of him.

"I understand Ron is upset about the press he's been getting," the e-mail message read. "If he's really concerned, he needs a strategy for dealing with it and regulating it rather than merely reacting. It's not easy to accomplish, but he certainly has the means to do so."

At that point, Mr. Burkle suspected he was being extorted, the associate said. Then, "he reached out to his attorney, who then reached out to law enforcement," the associate said.

According to many people involved in the episode, Mr. Stern agreed to meet Mr. Burkle face to face at least two times at Mr. Burkle's loft in TriBeCa, the first of which was on March 22. Mr. Burkle's security team, aided by a New York City-based private investigations firm, recorded the meetings in the loft over the last few weeks, according a person who was briefed on the sessions and was granted anonymity because the investigation is continuing. At the final meeting, on March 31, a federal agent and an assistant United States attorney were with Mr. Burkle's security detail to monitor the recording. The recordings were turned over to the federal authorities.

In their meetings, Mr. Stern described three levels of "protection" he could offer Mr. Burkle, according to those with knowledge of what is captured on the tapes.

When Mr. Burkle pressed Mr. Stern to explain how this would work, Mr. Stern at first cited a few examples involving Mr. Johnson, saying that his boss had a "script deal" with Mr. Weinstein — something the movie executive denied yesterday. "The New York Post and Page Six have always been above board with our company," said a Weinstein company spokesman.

Mr. Stern also said that Mr. Johnson's fiancée, Ms. von Richthofen, had been employed by Mr. Perelman, the financier. Last year, Ms. Richthofen was hired as an administrative assistant to Christine Taylor, the senior vice president of corporate communications of McAndrews and Forbes, Mr. Perelman's Manhattan-based holding company. Ms. Taylor said she knew Ms. Richthofen and had not been pressured to hire her. Ms. Richthofen, who resigned from the company a month ago, was paid no differently than anyone else would be in the position, she said. Mr. Perelman could not be reached for comment yesterday.

When Mr. Burkle asked Mr. Stern in the tapes if he should hire Ms. Richthofen, Mr. Stern steered the discussion of payments back to himself, according to one person involved in the investigation.

Mr. Johnson referred calls to Mr. Rubenstein.

The accusations against Mr. Stern were striking for the boldness of his alleged behavior and the amount of money he is accused of requesting. But gossip columns have always occupied a murky corner in the realm of journalistic standards, which traditionally preclude writers and editors from accepting gifts from those they cover.

Mr. Stern also cited the example of Joe Francis, the creator of the "Girls Gone Wild" video series, who Mr. Stern said had offered to fly much of the staff of Page Six to a place Mr. Francis owns in Mexico on his private jet for Mr. Johnson's bachelor party. According to Mr. Rubenstein, Mr. Francis was a friend of Mr. Johnson's. In March, an item appeared in The Post saying that Mr. Francis could be the next Hugh Hefner. Mr. Francis could not be reached yesterday.

Mr. Johnson also accepted a free trip to the Academy Awards last month, courtesy of ABC and Mercedes-Benz, including first-class airfare and a three-night stay at the Four Seasons Hotel. Mercedes-Benz also provided a car and driver for Mr. Johnson throughout the weekend, a spokesman for Mercedes-Benz, Geoff Day, confirmed.

Mr. Stern, 35, began working full time for The Post in 1997. In 2003, Bonnie Fuller hired him to be the executive editor of Star, a position he left within a year. He returned to The Post as a contributor. In addition he wrote for other publications, including two articles for The Times.

In the March 31 meeting, Mr. Burkle mainly haggled with Mr. Stern over how his payments should be made: in cash, as Mr. Stern wanted, or by wire transfer, as the authorities had pressed Mr. Burkle to insist, according to a person involved in the investigation.

In that meeting, the person involved in the investigation said, Mr. Stern spoke of Page Six's power.

"We know how to destroy people," Mr. Stern said, according to a person reading a transcript of the meeting. "It's what we do. We do it without creating liability. That's our specialty."

David M. Halbfinger, Julie Bosman, Anthony Ramirez and Mark Santora contributed to this story.