Ms. Murdoch, at her Cinema Society screening (Getty Images)

Wendi Deng Murdoch, who made Tuesday morning by slapping her husband’s assailant at the News Corporation hearings in London, hasn’t let her family legal drama affect her unduly. Last Wednesday, she attended a Cinema Society screening of the film she produced, Snow Flower and the Secret Fan, with guests including Nicole Kidman (the Australian pal of Mr. Murdoch whom former Page Six contributor Jared Paul Stern recently alleged “had a free pass” from News Corporation’s gossips), Mayor Michael Bloomberg and Harvey Weinstein. (Disclosure: Ivanka Trump Jewelry, an advertiser in The Observer, was the event’s sponsor.) She also attended a Saturday screening of the film in Southampton, along with Barbara Walters and Rudy Giuliani.

Cinema Society founder Andrew Saffir was distraught over Ms. Murdoch’s crisis, though he said it was never discussed while planning the event. “She’s been working on the film, as you know, for years. It’s so unfortunate that this came about when she was about to have her moment in the sun.”

ddaddario@observer.com :: @DPD_

In April 2006, The Observer's Choire Sicha profiled Mr. Stern at his Catskills cottage and reported on his book deal which was subsequently cancelled .

Doree Shafrir has the tale of the tape on several heated media feuds, including Jared Paul Stern v. Ron Burkle, Buzz Bissinger v. Will Leitch (thankfully resolved), and Leon Wieseltier v. Andrew Sullivan. Plus: Barbara Walters' memoir.

Will the Commission on Presidential Debates play nice with Web 2.0? Felix Gillette looks ahead to the general elections and talks to James Carville who says, "That commission has run its course... I think Google and YouTube and other people are seeing a kind of vacuum, and they’re moving into it. I can’t imagine a presidential candidate not wanting to participate in this debate.”

Is Murdoch lieutenant Robert Thomson filling the void left by Marcus Brauchli's departure from The Wall Street Journal? Mr. Thomson tells John Koblin, "there is uncertainty and thus it is proper for me to stand in front of our journalists and take the tough, challenging questions." Plus Out's Aaron Hicklin.

Plus: Meredith Bryan swills with internet wine critic Gary Vaynerchuk and flies among the Society Superheroes at the Metropolitan Museum of Art's annual Costume Institute Gala; Doree Shafrir attends a book club; Spencer Morgan takes a bath.

However, in former Page Six freelance writer Jared Paul Stern's lawsuit, filed today against Burkle, Ronald Sitrick, William Sherman, the Daily News, and Bill and Hillary Clinton, it is stated as fact.

From the lawsuit:

--Michael Calderone

Or his lawyer, Joe Tacopina, is.

On Jan. 23, Mr. Tacopina issued a statement saying that he’d gotten a call about his client from the U.S. Attorney’s office.

Mr. Stern was widely rumored to be under investigation for extortion after an April 7, 2006, article in the Daily News reported that he had asked billionaire Ron Burkle for nearly a quarter of a million dollars in return for favorable coverage in the Post.

Last week, Jared Paul Stern quietly, anticlimactically got word that he was not going to be charged with a crime by the Department of Justice.

“That’s news to me,” said a spokesman for Ron Burkle on the afternoon of Jan. 23, before an item on the Associated Press newswire reported that the investigation had been dropped, citing “an individual familiar with the federal investigation.”

Well, then. Was Mr. Stern relieved?

“I’m still unemployed and all that,” Mr. Stern told The Observer. “Obviously, it’s a weight off. Ding-dong, the witch is dead.”

Would there be celebrations?

“I haven’t planned a party,” Mr. Stern said on Jan. 23. “I planned a lawsuit.”

Better!

“I have been informed by the U.S. Attorney’s office that they are not proceeding with any case against Mr. Stern,” Mr. Tacopina’s statement read in part. “Mr. Stern will shortly be filing major civil suits against Burkle and others who have defamed, libeled and slandered him, and who continue to do so.”

Of course, the only place anyone had ever directly accused Mr. Stern of a shakedown was in the pages of the Daily News. And despite several reports, it’s not clear that any criminal investigation into Mr. Stern’s behavior ever got off the ground.

“We have to stick to our office policy, in which we do not confirm or deny the existence of an investigation,” said Rebekah Carmichael, of the U.S. Attorney’s Office public-information desk.

But if there were no investigation, could the office then not deny it did not exist?

“We can’t comment on this at all,” she said.

But, but ….

“The thing really to say is that—if you want a statement from us—is that we can neither confirm nor deny the existence of an investigation,” she said.

Why does it matter whether there was an investigation or not?

The New York Post decided not to continue working with Mr. Stern, a long-time freelancer and Page Six contributor, on April 21, 2006. The Post’s editor, Col Allan, said at the time that Mr. Stern “has been suspended pending the outcome of the federal investigation.”

But if there’s no investigation, then pending what outcome?

Does Mr. Stern get his job back?

“We are not commenting on employment matters,” Steven Rubenstein, who represents the Post, told The Observer.

Representatives for Mr. Burkle e-mailed a statement to The Observer which didn’t seem to clear something up: There has been an investigation, at least, wrote Mike Sitrick, a spokesman for Mr. Burkle.

“The facts speak very clearly for themselves, as media reports on the contents of the tapes have demonstrated,” he wrote.

“Mr. Burkle followed the government’s instructions from the onset: From their directive that he record and they monitor the second meeting Mr. Stern had with him—where Mr. Stern repeated his request that Mr. Burkle pay him $100,000 up front and thereafter $10,000 monthly in exchange for Mr. Stern’s ‘efforts’ to stop the publication of false reports about Mr. Burkle on Page Six of the New York Post—to the government’s subsequent monitoring of a series of e-mails with Mr. Stern, in which Mr. Burkle was given bank account information for wiring money to Mr. Stern—to now,” the e-mail further read.

“Mr. Burkle didn’t question their decisions previously and he isn’t going to start doing so now.”

That’s complicated enough. But it seems the difference between a federal investigation and an arrest or a conviction has flummoxed reporters before.

On Dec. 29, the Los Angeles Times reported: “In March, Los Angeles billionaire Ron Burkle helped the FBI in a sting that resulted in the arrest of writer Jared Paul Stern.”

A correction ran on Jan. 10; Mr. Stern, it read, “has not been charged or arrested.”

On Dec. 31 in The New York Times, Alan Feuer wrote in a flowery the-year-that-was piece: “A much more common ailment—avarice—was in the news in April when federal authorities announced they were investigating Jared Paul Stern.”

“No charges have been filed in the case,” the report continued, “in which investigators say that Mr. Stern tried to blackmail Ronald W. Burkle, the supermarket magnate.”

On Jan. 5, The New York Times ran a long correction, noting that investigation was reported by the New York Post—oh?—and never announced by any federal investigator.

They noted as well that the allegations that Mr. Stern demanded payment from Mr. Burkle were made by Mr. Burkle, not the “federal authorities.”

“If you did read all that, you’d think I was charged with extortion,” Mr. Stern said. “The cumulative effect of all that biased reporting! Even their own reporters came away with that impression. It just wasn’t true. I know as well as anyone that a little correction does not offset the effect of stories like that. In my book”—Mr. Stern has finished the first draft of his book, to be published later this year, and is currently in revisions—“I use the example of: someone slits your throat and offers you a styptic pencil. That’s what it was.”

Well, all newspapers make mistakes—tabloid, broadsheet, tabloid, whatever.

“You know, I have to say, though—that last Times correction? We don’t ever make a mistake like that,” Mr. Stern said, speaking about Page Six. “They might say someone was at Spa or Marquee when they weren’t—but legal situations? That is handled by editors who actually either know what’s accurate or check.”

But Mr. Stern seems less steamed at The New York Times than at Mr. Burkle. Certainly Mr. Tacopina’s recent press tour is the opening salvo in a courtroom dance with the Friend of Bill.

If so, prepare for a mess.

“There’s two things that make them difficult,” said David Schulz of defamation cases. He is a partner at Levine, Sullivan, Koch $ Schulz with a great deal of experience in libel and newsgathering-related law. “One is that the claim of damage is a loss of reputation, which means the plaintiff’s reputation is the issue in the case. So you open a can of worms, or open yourself to inquiry about your reputation.”

For instance, one of the first items requested in the discovery period will surely be the videos of the encounters between Mr. Burkle and Mr. Stern. After that come the e-mails, the letters, the phone-message pads, the voicemails, and on and on.

The other difficulty is Mr. Stern’s burden as the plaintiff. “You have to show that the author, the defendant, published something false with knowledge that it was false, or was so reckless that it was tantamount to false,” Mr. Schulz said.

Don’t defamation cases drag endlessly—and then drag on further in endless appeal? Not always. “There are often cases that are won quickly—by the defendant,” he said.

Be that as it may.

“So, obviously,” Mr. Stern said, “whatever legal action we can take will hopefully make some kind of repairs. It wasn’t like a minor thing. It’s not that easy to erase. It was a long 10 months. And it’s not over till the fat billionaire sings.”

Perhaps he will! Mr. Burkle, in cooperation with Eli Broad, currently has an outstanding bid for what the Los Angeles Times called a “large and potentially controlling stake” in the Tribune Company—which owns the Los Angeles Times and other newspapers and media outlets.

Unless Mr. Stern’s former boss, Rupert Murdoch—said to be in cahoots with the Chandler family—gets it first.

The Transom goes to Sundance. (As Brad Pitt.)

Jared Paul Stern: Free at last.

It's Davos, baby! A thorough guide to this week's Swiss new media/old royalty confab.

As Time slashes forward, its editor tries and fails to poach big names.

Who's next on NYT video obits?

Alexis Swerdloff goes home again--to Brooklyn.

"The facts speak very clearly for themselves, as media reports on the contents of the tapes have demonstrated.

"Mr. Burkle followed the government's instructions from the onset: From their directive that he record and they monitor the second meeting Mr. Stern had with him -- where Mr. Stern repeated his request that Mr. Burkle pay him $100,000 up front and thereafter $10,000 monthly in exchange for Mr. Stern's 'efforts' to stop the publication of false reports about Mr. Burkle on Page Six of the New York Post -- to the government's subsequent monitoring of a series of emails with Mr. Stern in which Mr. Burkle was given bank account information for wiring money to Mr. Stern -- to now. Mr. Burkle didn't question their decisions previously and he isn't going to start doing so now."

Since last April, Mr. Stern, a former Page Six writer, has waited on word from any law enforcement office regarding allegations of extortion or blackmail due to his interactions with supermarket billionaire Ron Burkle.

Joe Tacopina, Mr. Stern's lawyer, issued a statement to The Observer today:

"I have been informed by the U.S. Attorney's office that they are not proceeding with any case against Mr. Stern. We have said from day one that this was a campaign to spread lies based on false accusations fueled by Burkle's personal vendetta against the New York Post, and that there was never any evidence of wrongdoing on Mr. Stern's part."

More in tomorrow's New York Observer.

--Choire Sicha

Mr. Stern, the fallen gossip columnist, has sold a nonfiction book to Touchstone Fireside, a division of Simon & Schuster.

“But we’re not writing it for them,” Mr. Stern said, of that majority of his former readers in the New York Post’s Page Six.

The book—working title: Stern Measures—is expected to be published near the end of 2007. Word of the deal broke on Gawker the afternoon of Oct. 17. Mr. Stern’s manuscript is due, by his account, in early 2007. His publisher said he thought it might be expected at the end of this year.

The book will describe what goes on “inside the sausage factory” of gossip journalism, said Mr. Stern.

Mr. Stern, 35, spent 11 years in the trade—grinding meat, gristle and odd bits—before losing his freelance job at the Post on April 21. He was let go because billionaire supermarket magnate and Sean John investor Ron Burkle made video recordings of conversations between himself and Mr. Stern. The New York Daily News and the New York F.B.I. each came into possession of all or part of those recordings. The Daily News printed a partial transcript and indicated it only had six minutes of tape. Those six minutes, according to the transcript, included Mr. Stern saying, “I wouldn’t be asking you for this kind of money if I didn’t think I could help you when it is needed.”

The first act of the story played out in gossip time: a flurry of extortion accusations and entrapment counteraccusations, Mr. Stern’s ouster, some speculation about the future consequences and a quick curtain. Britney had another baby or two. Mel Gibson got boozy and anti-Semitic. Joe Francis slugged a reporter. Jared Paul who?

Within two months of his dismissal, a book proposal by Mr. Stern was circulating. “There will obviously be no shortage of media attention for this project,” the proposal promised. John Brockman served as his agent.

But was there publishing attention? “Yeah, I mean, I considered it briefly,” said Morgan Entrekin, publisher of Grove Atlantic. “I took a quick look at it.” He passed.

Then Mark Gompertz and Mr. Stern met for the first time at the Simon & Schuster offices, on July 5, at 11 a.m. “He was wearing a perfect hat, as I thought he might,” Mr. Gompertz said. They met again on Aug. 4, at Mexican Radio, in Hudson, N.Y. Mr. Stern had the fish tacos and a few margaritas, and wore a shirt of his own design.

Mr. Gompertz, 52, the publisher of Touchstone Fireside, purchased the book for himself. “I thought I’d shake things up a little bit,” he said. “My life was really dull. I didn’t have anyone sniffing through my garbage, so I thought I’d fix that.” He generally only purchases three or four books a year himself; his imprint and its editors publish 75 books a year. Last year, he bought and handled a memoir by Robert Klein.

The price of the sale would not be disclosed. “I can’t say,” said Mr. Gompertz. Mr. Stern said the money would pay the bills “for a little while.”

The book is not Mr. Stern’s only project. He said he also plans to sue Mr. Burkle, and other parties.

“There’s no reason for me not to sue,” Mr. Stern said.

Mr. Stern has until April 2007 to bring a suit on the grounds of defamation. “If privacy is an issue for him,” Mr. Stern’s lawyer, Joseph Tacopina, said of Mr. Burkle, “he doesn’t want to be subjected to a discovery process. And I think that’s something that’s going to be coming his way.”

Unless agreed by both parties or ordered by the court, a depositions is limited to seven hours on one day. “It’s hard to figure out how to get all the material I want to use in a seven-hour deposition period,” Mr. Tacopina said. “That’s going to be my big challenge.”

In the last six months, Mr. Stern has worked little—lending credence to a defamation pro se claim of injury in his trade. Only recently has he found part-time employment as books editor under the new regime at BlackBook, a downtown magazine now under the editorship of an old friend, Steve Garbarino. “Right now, he’s been legally damaged to the point where his revenue has been all but halted,” Mr. Tacopina said.

His circumstances were so reduced that his wife, Ruth (Snoodles) Gutman, began to work. “That’s true,” Mr. Stern said. “She is working at a local company that makes, like, gourmet foods.” The couple lives in Oak Hill, N.Y.

And what did Mr. Gompertz think about the future of the book if Mr. Stern were to be charged, and prosecuted?

“I don’t know!” he said. “That’s a good question. I guess he’ll have more time to write it.”

“As you probably suspect, we can’t confirm or deny the existence of an investigation,” said Heather Tasker, a spokeswoman for the U.S. Attorney for the Southern District of New York, this week. “Sorry about that!”

Two sources with knowledge of the investigation said there was reason to believe it was ongoing or, at least, not terminated. Mr. Tacopina said he had several hours of conversation six months ago and, since then, “we’ve heard nothing from them.”

“To my knowledge, no one’s ever confirmed an investigation,” Mr. Tacopina said.

While Mr. Burkle, or the F.B.I., or both, dangle videotapes over his head, or over the New York Post, Mr. Stern now has a potential weapon of his own against the Post. Both, or one, or neither may have any damaging goods at all.

Mr. Tacopina disputed the analogy. “I don’t think Jared’s holding anything over anyone’s head.”

And what would Mr. Stern reveal in the book? Should Page Six honcho Richard Johnson be concerned?

Mr. Stern said, “I never saw any crimes being committed.

“No murders,” he qualified.

“Richard hasn’t done anything that bad,” said Mr. Stern’s friend Ian Spiegelman, himself a former Page Six employee. “Richard has done some stuff that is questionable. But there are extenuating circumstances to every time he’s done it.”

“Through all of my experiences there, he always advised me to do the right thing,” he said. Mr. Spiegelman was terminated in 2004 for writing pugnacious e-mails to a subject.

Employees of the New York Post are forbidden from talking to the press regarding the Stern incident. Ron Burkle has been asked by the F.B.I. not to comment or release information.

Mr. Stern and Mr. Spiegelman both believe that the institution of the New York gossip column has been undone, both by the changing times and by the Post’s cumulative reaction to employee misbehavior.

“A long time ago, there was a gentlemen’s agreement between Page Six and Rush and Molloy,” Mr. Stern said. When the Daily News gossips would refer to Richard Johnson, he was called Mr. X. The gossip rules have changed.

Gentlemanly behavior—as in “boys will be boys”—is now no longer the rule. When Mr. Stern ended up in trouble, Page Six “abandoned ship and left him to die,” Mr. Spiegelman said. “He’s been vilified; he’s been made poor. Ruth is working at a fucking factory.”

In the old days—just a few years ago—freebies were common. Mr. Stern described one colleague as “notorious for never paying for a meal.”

“You could have gone through life like that and have eaten a lot of crappy meals,” Mr. Stern said.

Mr. Stern said that “my linen closet is full of towels that say Evian and Nautica and fuck knows. I’ve got enough Kiehl’s to last 10 years. But big deal.” The first time he took a junket for the Post, he wrote a column about it for the paper, published in 2001, saying that freebies were worth about what one paid for them.

Page Six has been heavily remade since Mr. Stern departed. Two other Page Six freelancers were let go shortly after he was terminated; another left at the same time. Mr. Johnson courted more than a dozen prospective replacements before hiring Bill Hofmann from within the Post. Longtime Page Sixer Chris Wilson recently departed for Maxim.

Mr. Stern and Mr. Spiegelman both believe there’s little reason a young reporter would be attracted to work for Page Six. “The fact that they fired that poor bitch who hadn’t even started yet?” Mr. Spiegelman said. “And the bitch who got sanctioned? That’s bullshit. That’s how Page Six works.” The former was Sarah Polonsky, a former National Enquirer reporter, who Radar reported on Sept. 28 had received a free massage and had attempted to receive a free dinner. She was terminated promptly.

The latter was new Page Six hire Corynne Steindler, who was to have a sponsored party at Thom Bar.

It was both astonishing that the paper would reprimand Ms. Steindler for throwing a sponsored party and that Ms. Steindler was so out of touch with the paper’s emotional temperature that she had such an arrangement.

“It makes me sick,” said Mr. Spiegelman of the Post’s new uptightness.

“It was never really easy to find good people,” Mr. Stern said. “But for every Paula Froelich, there were a lot of people who were there for a short time. They couldn’t hack it. Art Buchwald’s daughter!”

Meanwhile, Mr. Stern is spending money to—possibly—make money. “I’m not aiding his financial predicament. But I’m certainly not bankrupting him,” Mr. Tacopina said. “I won’t get into who’s bankrolling his legal fees.”

“It’s not cheap,” said Mr. Stern. “But I’m not going to be poor forever.”

“I’m really, really hoping it’ll open up a great discussion about this whole idea of what are we doing in this society,” Mr. Gompertz said of the forthcoming book, “this feeding frenzy around scandal and celebrity that does dominate print and electronic media.”

“Jared knows everything,” Mr. Spiegelman said.

At the New York Post, “the only thing the writers and editors care about is the 2 percent who are in the Manhattan media,” Mr. Stern said. “Who are writing about us—and they’re reading it at a different level, and they’re under no illusion about people getting free massages and what goes in the column.”

“You have to step back from that world to realize how small it is,” he said.

At quarter past midnight, in the early hours of Oct. 17, Mr. Burkle was at Crobar, where his friend Sean (Diddy) Combs was throwing his first-ever Black Party.

Mr. Burkle was in the V.I.P. section, standing—and occasionally bopping his head to the beats—at a table of several young-model types. Abiding by the dress code, he wore a black polo shirt, black jeans and black sneakers. When asked if he preferred the Black Party to Mr. Combs’ earlier White Party, Mr. Burkle replied, “Oh, this is a totally different thing, but he throws great parties.” He declined to answer any other questions.

—with additional reporting by Spencer Morgan

Judge to Rule on Secret Sources Times Suit: Here We Go Again Whoever We Might Be

The New York Times’ ability to shield confidential sources is under yet another legal challenge. On Oct. 13, attorneys representing Dr. Steven Hatfill filed a motion in the U.S. District Court in Alexandria, Va., seeking to compel The Times to identify five sources used by op-ed columnist Nicholas D. Kristof.

The motion is part a defamation lawsuit against The Times resulting from Mr. Kristof’s coverage of the 2001 anthrax attacks. Dr. Hatfill was identified as a “person of interest” in the anthrax case by then–Attorney General John Ashcroft in August of 2002.

Earlier in 2002, Mr. Kristof had written a series of columns criticizing the pace of the anthrax investigation and describing—but not naming—a suspect, “Mr. Z.” After Mr. Ashcroft’s announcement, Mr. Kristof wrote that Mr. Z was Dr. Hatfill.

Mr. Kristof “essentially made the accusation that Dr. Hatfill was the anthrax murderer,” said Thomas Connolly, an attorney for Dr. Hatfill.

In a July 2006 deposition, Mr. Kristof declined to identify his sources by name, according to the plaintiff’s memorandum in the case. He provided only basic descriptions: an “anthrax expert,” two F.B.I. employees, a friend of Dr. Hatfill’s and a “scientist.”

“Dr. Hatfill’s ability to question Mr. Kristof’s sources directly is central to establishing the degree of fault The Times bears for publishing the false and defamatory columns about Dr. Hatfill,” reads the plaintiff’s memorandum.

Magistrate Judge Liam O’Grady presided over the 40-minute hearing and is expected to make a ruling this week, according to Mr. Connolly. Mr. O’Grady declined to comment.

The losing side will have 10 days to appeal. The lawsuit itself was dismissed after being filed in 2004, only to be reinstated by a federal appeals court. In March of 2006, the Supreme Court declined to hear The Times’ final appeal of that decision.

The Times is represented by the firm of Levine, Sullivan, Koch & Schulz. Attorney David Schultz argued on The Times’ behalf during the hearing, but did not respond to requests for comment.

Mr. Kristof, who is not personally liable in the case, didn’t return calls for comment.

—Michael Calderone

Television journalist Stone Phillips has just slashed $1 million off the asking price for his West 72nd Street penthouse, according to the New York Post. The Dateline NBC anchor is now asking $4.45 million for the apartment, listed with the Corcoran Group. And good news: there's an open house this weekend!

Also, (we refuse to write "babe-loving") billionaire Ron Burkle has been seen looking for a full-floor pad in Tribeca. But didn't that whole Jared Paul Stern mess take place in a Tribeca apartment that Mr. Burkle renting at the time? Why not try another neighborhood?

And is the Forward Building--which The Observer recently profiled--now the "Dakota of the Lower East Side?" The Post emphatically says no!

- Michael Calderone