Foundering: Amazon Part 6 - The Billionaire and the Tabloid

Release Date: April 7, 2022
Host: Brad Stone
Produced by Bloomberg Technology

Introduction

In the sixth episode of Foundering, titled "The Billionaire and the Tabloid," host Brad Stone delves into the tumultuous personal and professional upheavals surrounding Jeff Bezos, the CEO of Amazon and then the world's richest man. This episode unpacks the shocking divorce of Bezos, the ensuing tabloid scandal involving the National Enquirer, and the intricate web of investigations that followed, highlighting the intersection of personal lives, media manipulation, and corporate leadership.

Jeff Bezos Announces Divorce

[01:25]
Brad Stone sets the stage by recounting a pivotal moment on January 9, 2019, when Jeff Bezos publicly announced his divorce from his wife, Mackenzie Bezos, after 25 years of marriage.

Brad Stone: "January 9, 2019, at precisely 6:07 in the morning, Pacific time was a massive turning point in the life of Jeff Bezos."

The announcement stunned colleagues, acquaintances, and friends alike, as the couple had maintained a facade of a stable and loving relationship both personally and professionally.

National Enquirer’s Scandalous Revelation

[02:30]
Shortly after the divorce announcement, the National Enquirer published an explosive story alleging that Bezos was involved in an affair with Lauren Sanchez, the wife of Hollywood agent Patrick Weitzel.

Craig Berman (Former VP at Amazon): "It was shocking when it came out because it was completely unexpected."

The tabloid went further by leaking intimate text messages and photographs, including allegations of a compromising "dick pic," thereby fracturing Bezos's carefully cultivated public image as a devoted family man.

Investigation into the Leak

[16:51]
Bezos responded by asserting that he was being blackmailed by the National Enquirer. In a notable essay on Medium, he revealed that he had hired renowned private investigator Gavin de Becker to uncover how the tabloids obtained his private communications.

Brad Stone: "In his essay, Bezos said he had hired private investigators to learn how the National Enquirer had gotten his text messages."

Bezos speculated about possible motives, hinting at a broader conspiracy possibly involving enemies of the Washington Post—a publication he owns—that had recently criticized powerful figures like Donald Trump and highlighted the murder of journalist Jamal Khashoggi by Saudi agents.

Brad Stone: "He suggested the real culprits of his leaked photos might have been enemies of the Washington Post."

Lauren Sanchez’s Brother: Michael Sanchez

[21:24]
The investigation led Gavin de Becker to Michael Sanchez, Lauren Sanchez's older brother and a Hollywood talent manager. Michael emerged as a key suspect in leaking sensitive information to the National Enquirer.

Gavin de Becker: "Michael Sanchez has been among the people we've been speaking with and looking at. Strong leads point to political."

Michael vehemently denied involvement, labeling the accusations as "sloppy leaks and crazy conservative conspiracy theories." However, inconsistencies in his statements and his attempts to shift blame raised suspicions.

Craig Berman: "The most unsettling thing was that Bezos preached good decisions and sound judgment within the company. It was like Bezos had violated his own code."

Theories of a Saudi Conspiracy

[30:55]
Amidst mounting evidence pointing to Michael Sanchez as the sole leaker, Bezos and investigators entertained the possibility of a more sinister involvement. Gavin de Becker hypothesized that the Saudis might have accessed Bezos's phone, considering the backlash Bezos faced from Saudi-affiliated online hate groups due to the Washington Post's coverage of Khashoggi's murder.

Brad Stone: "For the past few months, an online army of Twitter accounts had been attacking Bezos. The accounts are believed to be linked to Mohammed bin Salman, the Crown Prince of Saudi Arabia."

Despite these theories, no concrete evidence emerged to substantiate claims of Saudi involvement. Investigations by the FBI and the Manhattan District Attorney eventually found no grounds to pursue these allegations.

[40:35]

Brad Stone: "The FBI and federal prosecutors looked into this tangle of accusations and dropped the matter without bringing any charges at all."

Michael Sanchez’s Legal Battles and Revelations

[33:15]
As the scandal unfolded, Michael Sanchez took legal action against the National Enquirer, Bezos, and investigator Gavin de Becker, alleging defamation. These lawsuits inadvertently clarified his role in the leak.

Brad Stone: "In the litigation, court documents showed Sanchez had signed a contract with the Enquirer, paying him $200,000 for the story."

Testimonies from National Enquirer reporters confirmed that Michael was the sole source of the sensitive information, effectively debunking Bezos's broader conspiracy theories.

Brad Stone: "They said under oath that Sanchez was their sole source of information and that the Saudis had nothing to do with it."

Despite losing the lawsuits and being ordered to pay Bezos $208,000 in legal fees, Michael's actions had already irrevocably damaged his credibility and personal relationships.

Aftermath and Repercussions

[44:22]
The fallout from the scandal had significant implications for Bezos and Amazon. Bezos's public image shifted from a devoted family man to a figure embroiled in controversy, which clashed with the company's values of modesty and frugality. This dissonance raised concerns among stakeholders and prompted introspection about the future leadership of Amazon.

Craig Berman: "He certainly did defeat in spectacular fashion, an outlet that was really, really coming after him hard."

Ultimately, Bezos transitioned away from his role as Amazon's CEO, stepping down to focus on other ventures such as his space exploration company, Blue Origin, marking a new chapter in his personal and professional life.

Conclusion

In "The Billionaire and the Tabloid," Brad Stone masterfully navigates the intricate saga of Jeff Bezos's personal upheaval and its intersection with media manipulation and corporate leadership. The episode illuminates how personal indiscretions can ripple through professional spheres, challenging even the most meticulously crafted public personas. Through detailed investigation and compelling narratives, the story underscores the fragile balance between personal privacy and public scrutiny in the age of pervasive media.

Notable Quotes

• Brad Stone [01:25]: "January 9, 2019, at precisely 6:07 in the morning, Pacific time was a massive turning point in the life of Jeff Bezos."

• Craig Berman [02:06]: "It was shocking when it came out because it was completely unexpected."

• Brad Stone [16:51]: "Although Bezos got to announce his impending divorce himself, he couldn't contain the maelstrom."

• Brad Stone [30:55]: "Gavin theorized that by the time Sanchez gave the tabloid paper the goods, the Enquirer had already seen text messages between the couple."

• Craig Berman [44:49]: "He definitely pulled off this victory against a news publication."

Production Credits

Foundering is hosted by Brad Stone, with Sean Wen as the executive producer, Ray Mondo serving as the audio engineer, and Molly Nugent as the associate producer. The team also includes story editors Mark Million, Ann Vanderme, Robin Agello, and Molly Schutz, with special thanks to Mark Bergen. Francesca Levy leads Blue Bloomberg Podcasts. Subscribe to Foundering and share it with friends to stay informed on high-stakes dramas in the technology industry.

This summary was generated based on the transcript provided and adheres to the guidelines of skipping advertisements, intros, outros, and non-content sections to focus solely on the episode's core narrative.