NEW YORK - Ron Burkle, the managing partner in Yucaipa Cos., Los Angeles, has become one of the two central figures in an ethics controversy involving whether he was a victim of extortion by a freelance writer for the Page Six gossip section of the New York Post.
Burkle contends the writer sought thousands of dollars in return for promises of favorable mentions in the Post and a promise that unfavorable items would not be published.
The writer, Jared Paul Stern, told SN last week he was simply discussing a possible investment by Burkle in Stern's clothing company "and about paying me to give him advice as a media consultant. [But] the story now is how and why [Burkle] set me up and smeared me and why the press let him get away with it at first."
Burkle, the largest single shareholder in Pathmark, a major investor in Wild Oats and the former chairman of Ralphs Grocery Co. before it was acquired by Kroger, said items published by the Post about his involvement with various models and celebrities were inaccurate.
After complaints to the Post did not put a stop to those reports, Burkle said meetings with Stern in March were videotaped. During those meetings, Burkle wrote last week in a letter to the Wall Street Journal, "[Stern] made me an astonishing offer. If I forked over $200,000 or so, he promised, the Post's Page Six gossip pages would stop publishing false items about my personal life.
"I was asked repeatedly to pass on secrets about my friends to gain protection against negative stories about myself. I refused to play the game, so I was punished."
Burkle subsequently turned over the tapes and email correspondence between Stern and staff members to law enforcement agencies, after which Stern was put under investigation by the Federal Bureau of Investigation and was suspended by the Post.
In an email to SN, Stern forwarded two articles that he said reflect his side of the story: one from the New York Observer's Daily Transom column, which said Burkle set up a sting operation with his lawyers, the U.S. Attorney's office and the FBI "[to] catch ... Stern in the act of committing a crime," but failed; the other, from the Boston Phoenix, which said the issue in the case is "media ethics, not the federal crime of extortion," and noted the one-sided coverage of the case by the media, primarily the New York Times.
According to published reports, charging Stern with extortion would require prosecutors to prove he threatened Burkle with economic harm.
The government would also have to seek approval of the U.S. Attorney General to interrogate or arrest members of the news media because of guidelines put in place to help ensure freedom of the press, the reports said.
In his letter to the Wall Street Journal, Burkle compared the situation to corporate governance. "At least since the Enron era, business leaders have faced more stringent accountability than ever before. They are versed in the rules of corporate governance, which require care in what is said publicly and demand full disclosure of potential conflicts of interest.
"However, these principles are not just for the boardroom; they must also be practiced in the newsroom. While the vast majority of the media maintain high levels of integrity, the resistance by some newspapers to correcting basic falsehoods is alarming.
"Newspapers that continue to go down the road of tabloidism, that adopt the shoddy standards of gossip reporting and that arrogantly resist correcting their mistakes, risk losing their special role in our democracy."