Fox paid seven figures to settle lawsuit over bogus Seth Rich conspiracy story

Michael Isikoff
·Chief Investigative Correspondent
News Corporation headquarters
Fox News headquarters in New York City. (Richard Drew/AP)

WASHINGTON — Just as star anchor Sean Hannity and other high-profile Fox News figures were due to be deposed about their promotion of a bogus conspiracy theory about the death of former Democratic National Committee staffer Seth Rich, the cable network last month threw in the towel and moved to settle a lawsuit brought by Rich’s parents that threatened to expose a wealth of new details about one of its most embarrassing screw-ups in recent years.

The settlement between Fox News and Rich’s parents, Joel and Mary Rich, was publicly disclosed Tuesday, but with no details about the terms. But legal sources tell Yahoo News that the settlement includes a lucrative seven figure payment to the Rich family consistent with the size of payouts Fox News and related corporate entities have made in other cases that have brought them negative publicity.

The hastily arranged settlement also had the benefit of sparing Hannity and other Fox News figures — including network president Jay Wallace and contributor Newt Gingrich — the ordeal of being grilled under oath about claims in a series of broadcasts in May 2017 that blamed the leak of DNC emails to WikiLeaks on Rich. At the time, Hannity called a Fox News story attributing the DNC leak to Rich an “explosive” development that “might expose the single biggest fraud, lies, perpetrated on the American people by the media and the Democrats in our history.”

In fact, Fox News retracted the story after eight days and special counsel Robert Mueller’s investigation declared the claims about Rich were false, concluding — along with the U.S. intelligence community and the FBI — that it was Russian military intelligence agents who had hacked the DNC and passed the party’s emails to WikiLeaks through an online persona called Guccifer 2.0.

“The settlement with Fox News closes another chapter in our efforts to mourn the murder of our beloved Seth, whom we miss every single day,” Joel and Mary Rich said in a statement released Tuesday. “It allows us to move on from the litigation we initiated in response to Fox News’ May 2017 article and televised statements concerning Seth’s murder. We are pleased with the settlement of this matter and sincerely hope that the media will take genuine caution in the future.”

Fox News said in a statement: “We are pleased with the resolution of the claims and hope this enables Mr. and Mrs. Rich to find a small degree of peace and solace moving forward.” Asked for further comment, a spokeswoman responded that it was “not true” that Fox News initiated settlement talks to avoid the Hannity deposition, but declined further comment.

Mary Rich
Mary Rich, mother of slain DNC staffer Seth Rich. (Michael Robinson Chavez/Washington Post via Getty Images)

The story of Seth Rich, the subject of a Yahoo News six-episode “Conspiracyland” podcast series last year, grew out of the hotly contested 2016 presidential campaign, and became one of the leading conspiracy theories of Donald Trump’s presidency. Rich, a 27-year-old staffer for the DNC, was murdered while walking home from a bar early on the morning of July 13, 2016, in what Washington, D.C., police quickly concluded was most likely a botched street robbery.

But, as the “Conspiracyland” podcast revealed, shortly after Rich’s death, Russian intelligence agents and right-wing allies of Trump, including longtime political adviser Roger Stone, promoted the idea that Rich was assassinated by gunmen working for Hillary Clinton because of his supposed role in leaking the Democratic Party’s emails.

In fact, Rich had played no role in the leak of DNC emails. Deborah Sines, then the assistant U.S. attorney in Washington who was charged with investigating Rich’s murder, said in the podcast that the claims that Rich had done so were a “complete fabrication.”

Yet as the FBI’s investigation into Russian interference in the 2016 election gained steam, and focused in part on potential links to the Trump campaign, Trump’s allies aggressively pushed the Rich story as an alternative narrative.

“Huge story … hit was a contract kill, obviously,” then White House chief strategist Steve Bannon texted to a CBS “60 Minutes” producer about Rich on March 19, 2017, according to some of Bannon’s text messages that were reviewed by Yahoo News during the making of the “Conspiracyland” podcast.

Then, in May 2017, working closely with another Trump ally, Dallas-based financial adviser Ed Butowsky, Fox News reporter Malia Zimmerman wrote and published a story on the network’s website — attributed to an anonymous federal investigator — asserting that the FBI had found evidence that Rich had leaked the party’s emails to WikiLeaks on his laptop computer. The story was immediately and aggressively promoted by multiple Fox News personalities, including Hannity, Gingrich, Laura Ingraham and others despite forceful denials by the Washington police, the FBI and the Rich family.

The following week, Fox News retracted the story and wiped it from its website, saying in a statement the article “was not initially subjected to the high degree of editorial scrutiny we require for all our reporting.” Fox News later announced it was conducting an internal investigation into how the story came to be posted on its website, but it has never released the results.

The link to Zimmerman’s profile page on the Fox News website is dead, and the Washington Post has reported she has left the network.

The amplification of the conspiracy theory about their son by Fox News, and its continued circulation on social media despite the Fox News retraction, caused anguish for Rich’s family. “You’re used, you’re lied to, you’re a pawn in your own son’s death,” said Mary Rich, who, along with her husband, Joel, was interviewed for the Yahoo News “Conspiracyland” podcast. “I wish they had the chance to experience the hell we have gone through. Because this is worse than losing my son the first time. This is like losing him all over again.”

The Rich family pursued a lawsuit in federal court in New York against Fox News, Butowsky and Zimmerman for intentional infliction of emotional distress. (Aaron Rich, Seth Rich’s older brother, has filed a separate lawsuit against Butowsky and Matt Couch, an Arkansas-based Internet personality, that is now in settlement talks. Butowsky, for his part, later sued this reporter and Yahoo News over the podcast but has since dropped the case. Couch has also sued Yahoo News but that case remains outstanding.)

In the course of the lawsuit brought by Seth Rich’s parents, Fox News was forced to turn over hundreds of internal emails and documents relating to its story. The documents were sealed but could have become public if the lawsuit proceeded. At least some of that material related to communications Butowsky had claimed at times to have had with White House figures, including then White House press secretary Sean Spicer and President Trump himself (although Butowsky later insisted neither had any advance knowledge of the story he was helping Zimmerman develop.) Lawyers for the Rich family also sought information about the identity of the unnamed person Zimmerman claimed was the source for her story.

The immediate trigger for the settlement talks, however, appears to have been a stepped-up deposition schedule that was filed with the court last September. It called for depositions of Zimmerman on Oct. 26, Butowsky on Oct. 27, Hannity on Oct. 30, Fox News president Wallace on Nov. 10 and Fox News executive vice president for corporate communications Irena Briganti. At that point, sources familiar with the matter say, Fox News lawyers began negotiations to settle the lawsuit and offered a hefty settlement figure, thereby sparing its star anchors and executives from having to answer questions about what they knew about the bogus story. Although the settlement terms were soon agreed to, the sources say, Fox News arranged to delay any announcement until this week — three weeks after the presidential election.

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