National Enquirer Investor Reviews Options After Bezos Claims

(Bloomberg) -- New Jersey’s State Investment Council called Jeff Bezos’s allegations against the National Enquirer seriously troubling and said it’s evaluating its options for the state pension fund’s investment in Chatham Asset Management, the hedge fund that owns most of the newspaper’s parent company.

“The allegations of AMI’s conduct, if true, are completely unacceptable and violate our expectations for investment partners,” Adam Liebtag, acting chairman of the investment council, said in an email, referring to Enquirer parent American Media Inc. “It is extremely disappointing that the Pension Fund, as an investor, and our beneficiaries, have to be linked to such a distasteful story.”

Liebtag said the investment council has communicated its concerns to Chatham, which owns a majority stake in AMI. “While the investment has performed well to date, that is no excuse for this type of behavior. We continue to explore all available options,” he said.

The State Investment Council sets policies -- such as asset allocation -- for the $77.3 billion New Jersey Pension Fund. The council advises the Division of Investment, a unit of the State Department of Treasury, which makes the pension fund investments. The division is also seeking to ensure Chatham is investing in businesses that “follow all applicable laws,” Bloomberg reported Tuesday.

The state pension fund’s investment in Chatham has become the subject of renewed scrutiny after after a bombshell blog post published by Bezos, who accused the Enquirer of trying to blackmail him with photos of him with a woman who wasn’t his wife. The tech billionaire also suggested that American Media might have been acting on behalf of President Donald Trump and questioned whether it was motivated by coverage of Saudi Arabia in Bezos’ Washington Post newspaper.

Elkan Abramowitz, an attorney for AMI Chairman David Pecker, has denied that there was any blackmail, extortion or political motivation involved in the fight between the tabloid and Bezos. Chatham, meanwhile, has said that it has no involvement in the editorial process or the day-to-day business decisions of the company.

The board of AMI said last week it will investigate Bezos’ claims that the company tried to blackmail him. Two of AMI’s four directors are Chatham executives.

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