"AMI categorically denies that Donald Trump or Michael Cohen had anything to do with its decision not to pursue a story about a "love child" that it determined was not credible", AMI said in its statement Thursday.
American Media hasn't said whether federal authorities have sought information from it, but said this week that it would "comply with any and all requests that do not jeopardize or violate its protected sources or materials pursuant to our First Amendment rights".
The story of Dino Sajudin hasn't been told until now.
Regardless of the veracity of Sajudin's claims, legal experts said that A.M.I.'s payment to Sajudin is significant because it establishes the company's pattern of buying and burying stories that could be damaging to Trump during the Presidential campaign.
United States president Donald Trump has courted controversies and has nearly become synonymous with the word, thanks to his alleged association with pornstar Stormy Daniels and several women accusing him of sexual assault.
The owner of the National Enquirer paid US$30,000 (NZ$40,630) in late 2015 to a onetime Trump Tower doorman who was offering an embarrassing story about then-US presidential candidate Donald Trump but never published it, according to a person familiar with the payment.
AMI said its publisher, David Pecker, an unabashed Trump supporter, had not co-ordinated its coverage with Trump associates or taken direction from Trump.
Sajudin, who was released from his agreement with AMI after the 2016 election, could now face a $1 million fine if he disclosed the rumor or terms of his deal with AMI.
Enquirer staffers, however, told The New Yorker and the Associated Press that reporters were pulled off the story, which claimed Trump had fathered a love-child nearly three decades ago. AMI has said that McDougall did not produce the columns, according to the New Yorker.
Although Sajudin initially did not want to comment on the issue, he released a statement Thursday, saying he "can confirm that while working at Trump World Tower, I was instructed not to criticize President Trump's former housekeeper due to a prior relationship she had with President Trump which produced a child".
Dylan Howard, the Enquirer's editor-in-chief and an executive at American Media, acknowledged a year ago paying Sajudin but said the story ultimately was spiked because it "lacked any credibility", the AP reported.
Cohen later paid porn star Stormy Daniels $130,000 to ensure her silence in the days before Trump was elected. The Trump Organization has said that Calamari had no knowledge of this.
None of this is verified in any way, but who would pay so much money for a story they didn't think had any merit?
Prosecutors are investigating whether he broke banking or campaign laws in connection to the two payments, and on Monday FBI agents raided his hotel and office in a move he described as an "inappropriate and unnecessary".
The tabloid company gave her US$150,000 and an opportunity to publish fitness columns in AMI magazines.
"It seems like the writing is on the wall about that, it's pretty clear", Sajudin said before referring more questions to his lawyer.