Ways and Means

Peter Thiel Got His Revenge on Gawker. He May Yet Regret It

Peter Thiel’s openness about the extreme avenues he was considering going down to destroy Gawker could come back to haunt him should he face a ‘tortious interference’ lawsuit.

Photo Illustration by The Daily Beast

Silicon Valley billionaire Peter Thiel—who secretly schemed to annihilate Gawker Media, a goal he achieved in August 2016, and to force its founder, Nick Denton, into personal bankruptcy—may yet have cause to regret that he has reveled so publicly in his vengeful triumph.

The German-born, Donald Trump-supporting (with a $1.25 million campaign donation) Thiel is among the planet’s more successful tech entrepreneurs.

With a net worth, per Forbes, of over $2 billion, Thiel is the largest stakeholder in Palantir, an analytical-software company that helps the U.S. government uncover terrorist plots and fraud, a co-founder of PayPal and various flourishing investment funds, and a ground-floor investor in Facebook, where he still sits on the board of directors.

Thiel is presently embroiled in a legal battle in New York Bankruptcy Court concerning his role in Gawker’s demise. It is therefore at best inconvenient that’s he’s portrayed in a new book as having considered bribery, theft, bugging, and email hacking, among other potential crimes in 2011, before deciding to engage in a “totally legal” strategy of secretly bankrolling lawsuits against Denton’s company by way of payback for an unwelcome December 2007 report in the defunct Gawker site Valleywag that Thiel is gay.

That Valleywag article, headlined “Peter Thiel Is Totally Gay, People,” plus what Thiel later described as a series of Gawker and Valleywag stories about friends and business associates that “ruined people’s lives for no reason” and “bull[ied] people even when there was no connection with the public interest,” ultimately prompted him to act.

Although Thiel claimed to The New York Times that “it’s less about revenge and more about specific deterrence,” his remarks as quoted in the book suggest revenge played a role.

“There are things that were very tempting, an eye for an eye, tooth for a tooth. Retributive justice,” Thiel is quoted in New York Observer media and tech columnist Ryan Holiday’s soon-to-be-published Conspiracy: Peter Thiel, Hulk Hogan, Gawker, and the Anatomy of Intrigue. “But I think those would have ultimately been self-defeating. That’s where you just become that which you hate.”

The generally press-averse Thiel cooperated extensively with Holiday, granting the author multiple on-the-record interviews and introducing him to a foreign-born young man identified only as “Mr. A,” whom Thiel, Holiday reports, paid handsomely (a reported $25,000 a month) to help plan and execute Gawker’s death-by-lawsuit.

Someone could have followed Nick Denton and, while he dined at Balthazar one morning, stolen his cell phone. A team could have attempted to bug the Gawker offices.

The 319-page book includes this passage written by Holiday:

“‘It’s almost limitless what one could do,’ Mr. A says, musing on all the theoretical angles of attack they brainstormed in meetings at Thiel’s house and in late-night phone calls. Given the resources he had to draw on, the limitlessness of the options is nearly true: They could have bribed employees at Gawker to leak information, or hired operatives to ruin the company from the inside. They could have directed hackers to break into Gawker’s email servers. Someone could have followed Nick Denton and, while he dined at Balthazar one morning, stolen his cellphone. A team could have attempted to bug the Gawker offices.”

On Friday, BuzzFeed reporter Ryan Mac—the same journalist who originally revealed in May 2016, in Forbes, that Thiel had been footing Hulk Hogan’s legal bills to the tune of $10 million—identified “Mr. A” as “an Oxford-educated Australian citizen named Aron D’Souza.”

There were all these things that you could be tempted to do and it’s not clear they would work any better. So we decided very early on we would only do things that are totally legal, which is a big limitation.

Because he interviewed “Mr. A” with a promise of anonymity, Holiday told The Daily Beast he couldn’t confirm or deny the accuracy of BuzzFeed’s scoop, and D’Souza didn’t respond to a Facebook message seeking comment.

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“A decision was made to eliminate the strategies that would either be illegal or fall into any one of a number of gray areas,” Holiday reports in the book, which quotes Thiel as telling him: “There were all these things that you could be tempted to do and it’s not clear they would work any better. So we decided very early on we would only do things that are totally legal, which is a big limitation.”

D’Souza now claims that since the BuzzFeed story, and this Daily Beast one, he fears for his life. He “has received numerous serious threats to his physical safety,” a spokesperson for D’Souza emailed The Daily Beast on Tuesday morning. “In addition, he has been subjected to racist and homophobic abuse. As a result he will not be commenting on the subject matter outlined in the [Daily Beast] article.” Significantly, D’Souza’s spokesperson doesn’t deny that he is “Mr. A.”

In recent weeks, Manhattan attorney Gregg Galardi—who represents the moribund Gawker estate in bankruptcy proceedings that will include the auction of the Gawker.com domain names and more than 200,000 archived articles—has been pressing Thiel to submit to a deposition and disclose internal communications.

This is being done by Galardi with an eye toward discovery proceedings exploring a possible “tortious interference” lawsuit against the tech mogul for allegedly seeking to damage Gawker’s contractual and business relationships.

Thiel, for his part, has offered a formal bid for the Gawker estate’s assets—which, if successful, would likely protect him from a tort suit, since he would hardly be suing himself—and Galardi is reportedly trying to block such a sale.

I think he might have realized that he’s said too much at this point.

Galardi didn’t return a phone call seeking comment, and Thiel—who recently canceled a well-advertised March 10 appearance alongside Holiday at the SXSW festival in Austin, Texas, to discuss his tactics to punish Gawker—didn’t respond to several emails concerning the ongoing bankruptcy proceedings, his bid, and the assertions in Conspiracy.

“I think he might have realized that he’s said too much at this point,” said former Gawker Executive Editor John Cook, a Denton loyalist and one of Thiel’s more impassioned antagonists since the tech mogul acknowledged in May 2016 to New York Times columnist and CNBC host Andrew Ross Sorkin that he had secretly paid for the lawsuit and two-week-long trial in which Terry Gene Bollea (Hogan’s real name) won an astonishing $140 million judgment from a jury in Pinellas County, Florida. (Bollea eventually settled for $31 million plus a double-digit percentage of the proceeds from the planned Gawker.com auction.)

Holiday—who also conducted lengthy interviews with Hogan’s celebrity attorney Charles Harder, Denton, and A.J. Daulerio, the Gawker editor in chief who originally posted the offending October 2012 sex video and wrote the accompanying mocking commentary—said Thiel and “Mr. A” did in fact consider using some questionable weapons in their war on Gawker.

This sounds like what it was—a group of gangsters plotting to take out a witness.

Not to have done so “would be very, very strange, if you were plotting the destruction of someone, and you had unlimited resources,” Holiday said. “Basically, the only limitations are what you’re willing to do or not do. And so with two smart, rather ruthless people, there were a lot of options to consider and then eliminate, and those were options that were at least bandied about hypothetically.”

Holiday said Thiel ended up rejecting the more unsavory tactics because “One, they wouldn’t work and, Two, if you were ultimately exposed they would backfire as well.”

Denton, who was said to be traveling in Europe, could not be reached, but Cook blasted Thiel in a statement: “This sounds like what it was—a group of gangsters plotting to take out a witness.”

Cook continued: “And now Thiel is claiming not to have violated criminal laws in the course of the assassination. Like all of his other public statements about his malicious conspiracy to destroy Gawker and the lives of its writers in retaliation for truthful reporting on him and his friends, this claim of innocence is self-serving.”

Cook noted that Denton did in fact lose a cellphone and Gawker’s email and chat servers were indeed hacked in late 2010—although the electronic intrusion occurred months before April 6, 2011.

Whether or not Thiel and his as-yet-unidentified cronies actually carried through on the overtly criminal parts of their scheme, it is outrageous and alarming that a director of Facebook and Palantir brazenly conspired to steal, spy, hack, and bribe in order to destroy a group of journalists whose reporting had scrutinized his reputation and business ventures.

That’s the date Holiday fixes as the evening Thiel first discussed with “Mr. A”—then an ambitious 26-year-old who was “fascinated by power and knows that Peter is the means by which he can wield it”—the various ways and means of sinking Gawker, over dinner at Berlin’s posh Restaurant Tim Raue.

Holiday writes that while sipping an expensive Riesling, “Mr. A” proposed “a comprehensive, structured plan” in which Thiel “should create a shell company to hire former investigative reporters and lawyers to find causes of action against Gawker… [H]e has researched some names, he has a timeline and a budget. Three to five years and $10 million.”

John Cook added: “Whether or not Thiel and his as-yet-unidentified cronies actually carried through on the overtly criminal parts of their scheme, it is outrageous and alarming that a director of Facebook and Palantir brazenly conspired to... destroy a group of journalists whose reporting had scrutinized his reputation and business ventures. This amoral, power-mad conduct… is precisely the sort of behavior Gawker was dedicated to uncovering among the powerful and unaccountable.”

Cook continued: “I look forward to Thiel and his accessories being compelled, in Gawker’s bankruptcy proceedings, to undergo deposition and document discovery to reveal precisely how close the criminal components of the plot came to being realized.”

(Thiel didn’t respond to an email containing Cook’s statement in full. Holiday’s book reports that after the trial ended, Thiel and Denton met face to face and it was cordial.)

Holiday writes that “Mr. A” eventually settled upon attorney Harder, who racked up billable hours in a meticulous search for promising lawsuit options. The eureka moment arrived when Terry Bollea petitioned a federal court in an unsuccessful attempt to make Gawker take down the sex tape video and story.

According to Holiday’s account, Harder “picks up the phone and dials [Bollea’s lawyer] David Houston: I represent a wealthy client who is willing to support fights like yours, do you need any help? The voice at the other end of the phone is incredulous. Is this a joke?”

No, it wasn’t. Interestingly, Harder—who declined to comment to The Daily Beast—was never told who was paying his bills, with “Mr. A” acting as middleman, and didn’t learn his benefactor’s identity, according to Holiday’s account, until Thiel’s role was revealed in the media.

Holiday is a 30-year-old college dropout who, at the precocious age of 21 in 2009, was working as PR director for American Apparel; he said he has disliked Gawker—and wrote several New York Observer columns over the years slamming Gawker’s journalism and rooting for Hulk Hogan’s victory—ever since Denton’s gossip site obtained and published embarrassing hacked emails between himself and company executives.

“That was my first introduction to Gawker in an unpleasant way,” he recalled, adding that he believed, erroneously as it turned out, that the story was going to get him fired.

Today Holiday runs Brass Check, a boutique PR and branding consulting company in Austin; in 2012, he published a cautionary book of sorts that detailed his various successful attempts to scam lazy reporters, titled Trust Me, I’m Lying: Confessions of a Media Manipulatorand which, he argues, predicted the rise of the “fake news” phenomenon. (When he launched his Observer column in January 2014, Valleywag marked the occasion with the headline “New York Observer Hires Known Fraud Ryan Holiday to Help Run Tech Blog.”)

Holiday said he first met Peter Thiel in 2011 when he attended a book party—for Michael Ellsberg’s Education of Millionaires, which scoffs at the necessity of a college degree to succeed in business—at the mogul’s San Francisco mansion.

Five years later, as he started researching Conspiracy, Holiday’s anti-Gawker columns in the Observer—“Goodbye and Good Riddance: Sociopathy of Gawker and Gawker-Like Media Finally Exposed,” ran the headline over one—helped him gain the cooperation not only of Thiel but also of Hogan’s legal team.

While Gawker’s lawyers (including then-Gawker Media President and General Counsel Heather Dietrick, now CEO of The Daily Beast), declined to participate in Holiday’s book (and Dietrick didn’t provide a comment for this story), Conspiracy reports that Denton’s company ultimately offered Hogan as much as $10 million to drop his lawsuit.

The wrestler was taking a massive risk in refusing, even though Thiel—leaving as little as possible to chance—paid for “not one but two mock trials in Florida,” as the book reports, and the test results were more than encouraging.

According to Holiday, Thiel spent $100,000 for Harder and the rest of Hogan’s legal team to recruit and pay citizens of Florida’s Tampa Bay area, where the actual trial court was located, to sit in a conference room, as though they were a jury, and listen to them put on their case.

“The verdicts in that conference room in Tampa are stunning: $120 million and $149 million,” Holiday writes about the two mock trials Hogan’s lawyers conducted. “In those expensive mock juries, they had discovered that their case played exceedingly well to a very specific type of person.”

The legal teams of both Hogan and Gawker tried to maximize their advantages in the jury-selection process—in which each side attempts to impanel the jurors they believe will be sympathetic to their case—and the mock trials had given Hogan’s lawyers concrete guidance.

Quoting “Mr. A,” Holiday writes: “‘It became very clear that the kind of jurors we wanted were overweight women. Most people can’t empathize with a sex tape, but overweight women are sensitive about their bodies and feel like they have been bullied on the internet.’ … Hypothetical Juror #3 might not have been a victim of revenge porn. She might not care about celebrity privacy. [She] might not have known what it feels like to be Hulk Hogan, but she knows what it’s like to have an unflattering picture of herself on the internet. She knows what it feels like to be embarrassed or ashamed. Which is why they would choose her.”

By the end of jury selection for the actual trial, Holiday writes, “three of the people sitting in that box would be overweight women.”