NEW YORK (AP) – A New York Post gossip writer accused of trying to extort billionaire Ron Burkle said Sunday it was the businessman who initiated discussions about payments for press coverage.

“He set it up through a middle man,” Jared Paul Stern, a freelancer for the newspaper’s Page Six gossip column, said by telephone. “He initiated discussions in a potential investment in my clothing company. That’s where the whole money issue originated. He was the first one to bring up any question of payment for press coverage.”

Stern is suspected of demanding $100,000 and an annual $10,000 stipend in exchange for not writing negative stories about Burkle, one of the world’s richest men, and is under federal investigation. Burkle, who has an estimated personal wealth of more than $2 billion and has given millions of dollars to political causes, is known for his investments in supermarkets, including Food4Less, Dominick’s and Ralphs Grocery Co.

Stern and Burkle met in New York twice in March after a series of e-mails with Burkle’s right-hand man, according to a person close to the federal investigation, who provided details of the exchanges to The Associated Press. The meetings were secretly videotaped, and law enforcement agents monitored the conversations from the next room at least once.

Stern followed up the meetings with e-mails about deposit instructions and questions asking where his money was, the person familiar with the case said.

But according to Stern, his contact with Burkle began much earlier – at a meeting in July initiated by Burkle to pursue payments for positive coverage.

Telephone messages left for a Burkle spokesman and at his company’s law department were not immediately returned Sunday.

Burkle has said he and his lawyers repeatedly told the New York Post the articles about him in Page Six were inaccurate.

Stern, who has been suspended by the Post, complained he was being set up. He contacted the AP by phone Sunday to arrange sending an e-mail statement from one of his lawyers. The statement, attributed to attorney Joseph Tacopina, said: “Mr. Stern has been the victim of a smear campaign and expects to be fully exonerated and reinstated in his position.”

When reached later by phone and asked to explain the statement, Stern said he questioned the accuracy of the reporting by the Daily News, the Post’s New York tabloid rival.

The Daily News, which has featured the story on Page One and has dedicated several inside pages to it since Friday, on Sunday ran two pages of excerpts from a Stern-Burkle conversation and made a promise for Monday: “More sensational revelations!”

Stern said: “Obviously the Daily News’ role needs to be examined.” He didn’t elaborate.

A spokeswoman for the Daily News rejected the criticism.

“I find it completely ridiculous that a person who has been caught on videotape in an FBI sting operation is making these allegations,” Donna Dees said. “It smacks of desperation.”

The FBI has declined to comment on the case.

The Post’s editor in chief, Col Allen, said that if the extortion allegations are true, “Mr. Stern’s conduct would be morally and journalistically reprehensible, a gross abuse of privilege and in violation of the New York Post’s standards and ethics.”

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Associated Press writers Pat Milton contributed to this report.

AP-ES-04-09-06 2216EDT

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