Video: Duchess caught in cash-for-access sting

  1. Closed captioning of: Duchess caught in cash-for-access sting

    >> matt, thank you. now to the duchess of york , sarah fergusson , caught on tape, trying to sell access to her ex- prince andrew . while the royal family is not talking, everyone else is. stephanie gosk is outside buckingham palace .

    >> reporter: good morning, meredith. the reporter involved in this thing has made a career out of entrapping celebrities and royals. it's an old trick, but it seems there is always someone ready to fall for it. the trap set , sarah fergusson , duchess of york , fell right in.

    >> 500,000 pounds when you can, to me, open doors .

    >> it would be prince andrew ?

    >> yeah.

    >> is that a deal?

    >> yeah.

    >> the handshake seals the deal. fergie sells access to her ex-husband, prince andrew , british business envoy and queen elizabeth 's second son, for nearly three quarters of a million dollars, not knowing that the man posing as a businessman is actually a reporter for the british tabloid "news of the world."

    >> it's essentially saying that her ex-husband, prince andrew , who let's not forget, is fourth in line to the throwne, is up for rent. he can be bought and sold for anyone who wants to meet him and she's going to pocket the cash. it couldn't be more damaging for her.

    >> reporter: the duchess who lives beyond her means is reportedly drowning in debt. as the sting unfolds, fergusson asks for money upfront, in cash.

    >> $4,000.

    >> yes.

    >> which is in my safe. but how am i going to give it to you? i haven't got a bag.

    >> reporter: splashed across the tabloids, as were other similarly indelicate moments. this time the fallout directly implicates prince andrew and indirectly the queen, the grandmother of fergie 's two daughters.

    >> he's going to be kind enough to want to play, then andrew will play.

    >> that's correct. i don't want to get into any kind of trouble, obviously.

    >> but he meets the people and throws them my way.

    >> reporter: fergie herself in a statement, it is true that my financial situation is under stress. however, that is no excuse for a serious lapse in judgment and i am very sorry. the duke of york was not aware or involved in any of the discussions. the duchess flew to los angeles sunday night to receive an award for charity work . she also received some support.

    >> to be fair to her, you know, she's a trouper. she didn't need to be here tonight. she's very passionate about this kids' charity work she does.

    >> reporter: upon accepting her award, she made no reference to the exploding scandal other than to say i've had a heavy day. prince andrew and fergie have referred to themselves in the past as the happiest divorced couple in the world. many here think that that amicable agreement could come to an abrupt end. meredith?

    >> stephanie gosk, thank you very much. front page scandal all

msnbc.com staff and news service reports
updated 5/24/2010 11:16:29 AM ET 2010-05-24T15:16:29

Acknowledging financial difficulties, Duchess of York Sarah Ferguson has apologized after she was secretly recorded offering to sell access to her ex-husband Prince Andrew in return for 500,000 pounds ($720,000).

"I very deeply regret the situation and the embarrassment caused," she said in a statement Sunday. "It is true that my financial situation is under stress however, that is no excuse for a serious lapse in judgement and I am very sorry that this has happened. I can confirm that The Duke of York was not aware or involved in any of the discussions that occurred. I am sincerely sorry for my actions."

Earlier Sunday, the News of the World reported it had filmed "greedy Sarah Ferguson" taking a 40,000-pound ($57,000) down payment from its undercover reporter posing as a businessman.

The paper posted more than 4 minutes of video in which Ferguson, widely known as Fergie, is seen remarking: "Look after me and he'll look after you." She said the full sum would result in "open doors."

The duchess, 50, said Andrew, who is also a British trade envoy, would know nothing of the deal and that he would never take money himself as he is "whiter than white."

However, she is seen telling the reporter that the money would open "all the channels, whatever you need, whatever you want ... and then you meet Andrew and that's fine."

'Really upsetting'
On Monday, The Daily Telegraph newspaper reported that Lynne Featherstone, a U.K. Home Office minister, as saying: "It’s really depressing. Lord knows what the queen thinks waking up this morning."

"And it’s really disappointing because she went through all that terrible stuff at the beginning where we all hated her, then she redeemed herself by working like a normal human being to save herself and her children and now this, and it’s shoddy and grubby and really upsetting," she said.

"She says she’s got no money, it’s not much of an excuse," the politician added.

As an unpaid trade envoy since 2001, Prince Andrew, also 50, is in contact with international executives. The couple divorced in 1996 but are said to remain close friends.

Video: Background to sting The duchess reportedly met with the News of the World reporter on two days, Monday at a New York hotel and Tuesday at the exclusive Mosimann's dining club in London, after which she went to an apartment where she shook hands with the reporter to seal the deal and took the down payment.

The video shows the 40,000 pounds in front of her on a table and the Duchess later walking out of a hotel room with it in a computer case. 

She also reportedly insisted on a 1 percent commission on any deal struck from arranging the meeting.

The duchess was not told in advance of the Sunday publication and her spokeswoman told the BBC that the first she knew of the story was in the early hours of this morning when she started getting press calls.

Ferguson is mother to Princesses Beatrice and Eugenie, two of the queen's eight grandchildren.

Buckingham Palace also said the prince had been unaware of the meeting. It said he carried out his trade role with "complete and absolute propriety and integrity."

The tabloid report is embarrassing for Ferguson, but there is no suggestion she did anything illegal.

While Ferguson has not achieved the worldwide fame of the late Princess Diana, she has found popularity and success in the United States and beyond, through a variety of television appearances, penning weight loss books and charity work.

Since the divorce, Ferguson has written children's books, made television documentaries and acted as a spokeswoman for Weight Watchers.

She also has struggled financially and has complained that her divorce settlement was stingy.

Recently the company set up to manage her U.S. career in publishing, public speaking and media work, Hartmoor LLC, collapsed with debts of around $1 million.

"Fergie will be completely destroyed by this, but it shows how desperate she is for finance," royal biographer Ingrid Seward told Britain's Daily Mirror newspaper. "Money is like sand, it just slips through her fingers."

A remote descendant of King Charles II, "Fergie" was one of Andrew's childhood playmates and her father Major Ronald Ferguson was polo manager to Prince Charles, heir to the throne. She was herself the child of a broken marriage.

Back door
The Duchess flew into Los Angeles on Sunday to attend an awards ceremony organized by children's charity Variety and pick up an award for her work with underprivileged children.

"I hate grownups and love children," she told the audience at the ceremony. She made a passing reference to the sting while accepting her award, saying, "I had a heavy day."

On arriving at the event, she avoided the red carpet and entered through a back door, avoiding cameras and reporters.

The sting was the latest scoop for News of the World undercover reporter Mazher Mahmood, nicknamed the "Fake Sheik" after his signature ruse of pretending to be a rich Gulf businessman to dupe celebrities, politicians and suspected criminals.

He is a controversial figure who has targeted members of the royal family before. One of Mahmood's most famous scoops was a 2001 sting involving Prince Edward's wife. Posing as an aide to a Saudi Arabian prince interested in hiring her public relations company, Mahmood charmed Sophie, the Countess of Wessex, into making indiscreet comments about the British government. She also was caught on tape describing then-Prime Minister Tony Blair's wife, Cherie, as "horrid, horrid, horrid."

The Associated Press and Reuters contributed to this report.

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