Gossip Columnist Investigated in Alleged Extortion of Billionaire

April 7, 2006 — -- A reporter for the New York Post's "Page Six" gossip column has been suspended by the tabloid newspaper amid allegations that he tried to extort at least $100,000 from a California billionaire for protection against inaccurate or negative items.

The reporter, Jared Paul Stern, 35, is under investigation by the FBI and federal prosecutors, according to newspaper sources.

The billionaire is Ronald Burkle, 53, a prominent Democratic Party fundraiser who is ranked No. 335 on the Forbes list of the world's richest people. Burkle has been involved in a number of mergers and acquisitions through his Los Angeles-based Yucaipa Cos., a private equity firm. Some investments have been in supermarket chains, including Ralph's, Fred Meyer, Dominick's and Smith's Food and Drug Stores.

The Post's editor, Col Allan, said Stern, who worked two days a week on the "Page Six" column, "has been suspended pending the outcome of the 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."

Stern, a fixture in New York's gossip scene, did not return phone calls.

The Post said federal prosecutors had asked the newspaper to help preserve evidence, including e-mails sent by Stern. The Post is owned by Rupert Murdoch's News Corp.

Sources at the newspaper said Stern allegedly asked Burkle for a $100,000 payment plus an annual stipend of $10,000, and that Burkle pass along gossip about other celebrities.

"Page Six" items often portrayed Burkle as a rich playboy and linked him with models and actresses.

Burkle issued a statement saying he and his lawyers "have repeatedly written and or told the New York Post's lawyers, editors and management that the articles and the items about him on "Page Six" are inaccurate, but to no avail."

The story immediately became ammunition in New York's tabloid wars. The Post's arch rival the Daily News splashed an account across two pages in what it called an "amazing exclusive" and called the allegations a "shocking breach of ethics."

The Daily News reported that Stern tried to "shake down Burkle" in two 90-minute meetings on March 22 and March 31. The paper also reported that the meetings had been videotaped by federal authorities.

The United States Attorney's office in Manhattan declined to comment on the investigation, as did the FBI.